Pac O'Shea
August 16, 2024
Specified accounts clarify financial status, making it easier to manage cash flow and budgeting.
Allocate funds for payroll, operations, and other categories into separate accounts to monitor and control spending effectively.
Detailed financial statements aid in making informed decisions.
Use multiple accounts to break down and track specific income and expenses, providing clear insights into your cash flow.
Helps in monitoring and controlling operational expenses.
Create designated accounts for recurring costs like software subscriptions, travel, and vendor payments to streamline expense tracking.
Safeguards funds from fraud and breaches.
Distribute funds across multiple accounts to minimise risk exposure.
Collect all business revenues.
Use this account to receive direct deposits, wires, and invoices before distributing funds to other accounts.
Cover recurring monthly expenses.
Include costs like rent, utilities, and third-party services. Consider additional OpEx accounts for specific needs like travel.
Simplify payroll management.
Regularly fund this account to ensure timely and accurate salary payments.
Handle unexpected expenses.
Allocate a small, regular amount to build a fund for unforeseen circumstances.
Track multiple revenue streams.
Use separate accounts for different revenue sources to monitor performance and cash flow.
Save for future expenses.
Use an interest-bearing savings account to ensure idle cash works for your business.
Determine the percentage of income to allocate to each account based on your startup’s major expenses. For example:
Adjust these percentages according to your specific financial needs and revenue patterns.
While multiple accounts offer better cash management, they might complicate finances for small startups with limited revenue streams. Consider additional accounts after a significant cash inflow, such as a fundraising round.
Utilising multiple business current accounts can enhance your startup’s budgeting and financial management, ensuring long-term success. By organising finances effectively, UK startups can better manage cash flow, and safeguard against unexpected expenses.
With careful planning and strategic allocation, your startup can benefit from improved financial clarity and stability.
Disclaimer
This article is for informational purposes only and does not constitute financial guidance.
