The Three Bank Accounts Every Small Business Owner Should Have
When I think about the one thing that I wish small biz owners knew when starting out their business it would be the importance of managing your cash! It’s not super exciting but is absolutely crucial. One of the best kept secrets for easy cashflow management is keeping your money organised. Specifically, the three bank accounts every business owner should have.
It’s a super low cost and simple tip that will see you manage your cashflow through the stages of your businesses growth and you’ll never find yourself caught out if. So lock-in, it’s time to get serious about your businesses finances.
1. Daily Account: Your Money HQ
Your Daily Account is where your day-to-day business happens. This is the account where all your income lands and where you pay for your everyday expenses like:
Rent or office space
Utilities
Team wages/salaries (if you have a crew!)
Inventory
Any other day-to-day costs
This keeps things organised and easier to track what’s coming in and going out. Plus, it’ll save you a headache (and your accountants sanity) when it’s time to reconcile everything at the end of the month, say bye bye to wading through hundreds of personal transactions to get to the business stuff. This will help you see where you sit from over business performance perspective too.
2. Tax Savings Account: Stress-Free Tax Time
Tax time as a small business can be rough. This little gem is your secret weapon for staying ahead of the game.
Here’s how it works:
Decide on a percentage of your income to save for taxes (think GST, PAYG, and income tax for example 30%).
Transfer that amount regularly—weekly, fortnightly, or monthly—into this account.
Pretend this account doesn’t exist until tax time. Seriously. No dipping in!
By setting aside money for taxes as you go, you’ll dodge the panic when those ATO deadlines roll around. Future you will thank you.
3. Long-Term Savings/Profit Account
Last but not least: your Long-Term Savings/Profit Account. This one’s all about preparing for rough times, planning for your future, rewarding yourself for all your hard work.
Here’s what you do:
Pick a percentage of your income to stash here. Even a little goes a long way. Aim to have a buffer in this account of 3 months wages and overhead first. Anything over this then goes toward future goals and dividends/drawings.
Use this account to save for big goals or purchases.
Keep this fund sacred. It’s for your future, not for day-to-day expenses (unless it’s a serious emergency).
Having this account means you’re not just surviving; you’re setting yourself up to thrive. It’s all about creating space for growth and opportunities.
Why This Setup Works
Here’s why splitting your finances into three accounts is a total game-changer:
Clarity: You know exactly where your money is and what it’s for.
Discipline: Regularly saving for taxes and the future keeps you focused and avoids overspending.
Peace of Mind: You’re always prepared for tax time and those “just in case” moments.
Setting up these three accounts might take a bit of effort upfront, but trust us, it’s 100% worth it. You’ll feel way more in control of your finances and ready to take on anything your business throws at you.
Need a hand figuring out the nitty-gritty, like what percentages to save or how to set this up? We’re always here to help!
