Having multiple bank accounts is crucial to managing money properly in any business.
However, most small business owners do not manage their money properly.
Many even use their personal account for business - this for me is a NO-NO!
In my first role in financial services in 2001, I was responsible for managing over 30 bank accounts for a smallish insurance Company, and as complex as this sounds it made cash management easier.
So what are these bank accounts ?
Well, if you are small business owner (with t/o up to £50 million) based on the PROFIT FIRST SYSTEM you need five bank accounts, even if you are a one-person business:
1️⃣ Revenue (100% inflow)
2️⃣ OPEX
3️⃣ Profit
4️⃣ Renumeration
5️⃣ TAX
You allocate from the revenue account to the other accounts based on predetermined percentages.
Send me a message or email me at roy@racmacs.com if you need support in enhancing your money management systems and processes.
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