Having Multiple Bank Accounts: The Benefit for Your Small Business
Having multiple business bank accounts can be a smart move to manage money for any small business owner, helping to keep finances clear and easy to track across different areas of your business. Whether you're just starting out or have been running your business for a while, getting to grips with using multiple accounts is key. This in-depth guide will walk you through the benefits of using multiple bank accounts and show you how Thriday makes managing up to 9 business transaction accounts* stress-free with our user-friendly platform, ensuring your money management strategy is powerful yet simple.
Can I Have Multiple Business Bank Accounts?
Without a doubt! Having multiple business transaction accounts is not only possible but can also be a strategic move for savvy business owners. While you can open as many business bank accounts* as your heart desires, it's worth navigating this financial strategy with a mindful approach.
The key here is to ensure that each account you open serves a distinct, purposeful role in your financial management strategy. Whether segregating funds for clarity in revenue, expenses, and taxes or allocating budgets for specific projects, having multiple accounts can facilitate a crystal-clear financial overview and enhance the precision of reporting and tracking of various business activities.
However, it's only smooth sailing with due diligence. Business owners must be mindful of the potential associated costs of maintaining numerous accounts, such as account fees and minimum balance or activity requirements. It's vital to weigh these costs against the benefits and choose a banking partner that aligns with your business needs and financial health.
How to Open Separate Bank Accounts?
Not just a banking* solution but an innovative new all-in-one financial management platform, with Thriday, you no longer have to juggle numerous banks, platforms, opening processes and costs to dive into the world of multiple accounts.
Effortlessly open and operate up to 9 business transaction accounts* in a single, user-friendly platform - ensuring that the strategic benefits of multiple accounts are not overshadowed by administrative complexity.
With all your banking easily manageable in one platform and supercharged with automated accounting and bookkeeping, instant invoicing, BAS and tax lodgement and more - reaping the benefits of multiple bank accounts has never been this easy, cheap or powerful!
The Advantages of Having Multiple Business Bank Accounts
Understanding that not only is it possible to have multiple business bank accounts, but made extremely simple with Thriday, let's delve into some of the advantages of this strategic financial approach:
1. Crystal-Clear Financial Organization
With multiple bank accounts, you can avoid the hassle of mixed business and personal finances. Easily allocate funds into accounts by distinct categories, enhancing financial clarity and taking financial organisation to the next level. Imagine the clarity of having separate accounts for operational expenses, tax obligations, emergency funds, and investment capital. Now, imagine having all the transactions in these bank accounts automatically reconciled and categorised with the power of Automated Accounting to generate a full suite of detailed and up-to-date financial reports - accessible in a user-friendly app anytime, anywhere. Enjoy a clear snapshot of your finances in each crucial area to enable more informed decision-making with Thriday.
2. Robust Financial Security
In an era where digital transactions are predominant, safeguarding financial assets is crucial. Using multiple bank accounts is a great way to protect your assets from potential threats. Enhance your financial security by segregating funds across multiple accounts so that even in the unfortunate event of an account being compromised, the entirety of your financial assets are not at risk. This strategic separation of funds acts as a protective barrier and is made simple with multiple Thriday business transaction accounts easily manageable in one platform, securing your capital and ensuring operational continuity even amidst digital threats. Find out how you can Tirelessly Transact with up to 9 business bank accounts* with Thriday here.
3. Ensuring Uninterrupted Cash Flow
Cash flow is the lifeblood of any business. By utilising multiple accounts, you can manage funds for different purposes separately, ensuring that financial obligations in one area do not impact the others and cash flow remains uninterrupted. For instance, having a dedicated account in Thriday for payroll ensures that employee compensation is not affected by other financial activities, maintaining a stable and harmonious operational environment.
4. Strategic Tax Planning and Management
Tax obligations can often present a significant financial burden if not planned for adequately. By allocating funds into a separate account dedicated to tax obligations, and with smart GST recognition and personalised deductions automating and providing up-to-date estimates of your tax position at all times, Thriday can help ensure that you're always prepared for tax season. This proactive approach ensures compliance and financial stability by preventing large, unexpected deductions from the operational funds.
5. Facilitating Business Growth and Expansion
If growth is on your mind, you might be worried about the financial management requirements of your business becoming increasingly complex. Multiple bank accounts provide the flexibility to manage finances in a manner that aligns with the diversified needs of an expanding business. Whether it's managing the finances of different business units or handling growing transaction needs, having multiple accounts and automated accounting from day one provides the structural framework to facilitate smooth financial operations. Thriday eliminates financial admin for your business no matter the shape or size, today or tomorrow.
6. Enhancing Customer and Vendor Relations
In an era where customer and vendor expectations are continually evolving, having multiple bank accounts can also facilitate smoother transactions and payments, enhancing relationships and building trust. Whether it's ensuring timely payments to vendors or offering varied payment options to customers, multiple accounts equipped with Thriday's Instant Invoicing suite can help you manage your business finances in a way that skyrockets external relations. Find out more about Instant Invoicing here.
Using Multiple Bank Accounts for Profit First
There are many ways you can opt to use multiple bank accounts to effectively divide your funds across purposes; a well-established one for small business is the Profit First method.
The "Profit First" method is a financial management approach that flips the traditional accounting formula on its head and prioritises taking profit out of the business before covering expenses.
- Traditional Accounting Formula: Revenue - Expenses = Profit
- Profit First Formula: Revenue - Profit = Expenses
Implementing Profit First
Here's a breakdown of the Profit First method step-by-step:
1. Prioritise Profit
Upon receiving income, a predetermined percentage is immediately transferred to a separate profit account. This action ensures that profit is taken off the top, and what remains is used for expenses.
2. Allocate Percentages to Different Accounts
The Profit First method advises business owners to distribute their income into several bank accounts, each designated for a specific purpose, such as:
- Profit Account: A percentage of income is allocated here first.
- Owner's Compensation: To pay the owner's salary.
- Tax Account: To set aside money for tax obligations.
- Operating Expenses: To cover the costs of running the business.
While simple, this allocation approach requires a number of separate business bank accounts* that can be costly and hard to manage across banks. Thriday offers a cost-effective way to implement Profit First, facilitating up to 9 business transaction accounts all easily manageable and integrated with automated accounting in one platform.
3. Reduce Operating Expenses
Since profit and owner's compensation are prioritised, businesses are often left with a reduced budget for operating expenses. This constraint forces business owners to scrutinise and minimise costs, ensuring the business operates efficiently.
4. Regular Financial Reviews
Periodic reviews (e.g., quarterly) of the business's financials are recommended to adjust allocation percentages and ensure the business is operating optimally.
With Thriday, key financial reports such as income and cash flow statements, chart of accounts, and tax summaries are all automatically generated within the platform and immediately updated with incoming transactions, giving you a comprehensive bird's-eye view of your business' financials available at any interval.
5. Profit Distributions
The profit accumulated in the profit account is not just for show – business owners are encouraged to take a distribution (a portion of the accumulated profit) to celebrate the business's success.
Benefits of the Profit First Method
- Ensures Profitability: By taking Profit First, businesses ensure they remain profitable.
- Promotes Financial Discipline: The method forces businesses to work within the confines of remaining income after profit is taken, promoting frugality and smart spending.
- Simplifies Financial Management: Having separate accounts for different financial purposes makes it easier to manage and visualise financial health.
- Facilitates Healthy Cash Flow: Regular reviews and the allocation method help maintain a healthy cash flow.
The transformative Profit First method finds a seamlessly integrated and automated ally in Thriday.
The platform simplifies the technicalities of managing multiple accounts and enhances the strategic financial management enabled by the Profit First method, ensuring that your business is not merely surviving but thriving in a financially sustainable manner.
With Thriday, the Profit First method is not just a strategy but a simplified, automated, and insightful financial management experience.
Elevating Financial Management with Thriday
Harnessing the power of multiple Thriday bank accounts* can be a game-changer for businesses, offering enhanced financial clarity, security, and strategic fund allocation across various operational facets.
While the benefits are unending, managing multiple accounts used to be a complex and time-consuming task. Thriday's revolutionary platform has turned this upside down, offering an intuitive system where up to 9 business transaction accounts* can be effortlessly managed, organised, and analysed in one place.
With Thriday, the technicalities of utilising multiple bank accounts are simplified - as is the mind-melting small business bookkeeping and accounting process; with the power of AI intelligently integrated into a complete financial management suite to automate away tedious financial admin and give you back your Sunday nights!
Navigate through your financial journey with Thriday - your partner in efficient and insightful financial management!