Alternative Investments
As we edge towards a new normal after the pandemonium of 2020, small to medium businesses (SMEs) and entrepreneurs around the country should be reviewing their cash flow management, having learnt the value of emergency savings last year.
FNB, named SME Bank of the Year at the Global SME Finance Forum Virtual awards last year, is rising to meet this need with the FNB Business Call Account, tailored to cater to specific business needs.
In terms of good business management, reducing spending during a difficult financial period is a great first step but you should ideally have a savings buffer that can cover two to three months' worth of salaries and working expenses.
During the lockdown, we observed that businesses with prudent financial management were better able to weather the storm, while those businesses operating on a month-to-month basis found themselves suddenly floundering financially, says Vaughan David, CEO of Cash Investments: Business at FNB.
Rather than keeping surplus cash in a transactional account, we encourage our business customers to use a separate account such as the Business Call Account which carries an attractive interest rate, no monthly account fees and a minimum opening deposit of R1.
This is the first step towards smart cash management, allowing your money to work for you instead of sitting idly in your transactional account, David says.
Proper cash flow management means planning your business finances in advance and then managing your money so that you always have money on hand to pay suppliers and employees.
However, just as an individual needs an emergency fund, SMEs need to build up their emergency savings or manage their cash surpluses prudently.
For example, if you have a 20-day window to pay a supplier, you could leave that money in your Business Call Account and earn interest for 20 days, rather than just leaving the money dormant in your transactional account.
Why you need an emergency savings account
Money that is not sitting in your transactional account is more likely to be saved and not spent.
Money that is not sitting in your transactional account is more likely to be saved and not spent.
An emergency savings account serves to ring fence your savings, ensuring that the cash is on hand when you need it most.
This surplus cash could prove handy in the following situations:
An emergency savings account serves to ring fence your savings, ensuring that the cash is on hand when you need it most.
This surplus cash could prove handy in the following situations:
In addition to meeting the above needs, the FNB Business Call Account offers the following bespoke features:
