A Month’s Worth of Expenses in Your Transactions Account

cashflow forecasting cashflow management operations account structuring bank Sep 10, 2021

Structuring Bank Accounts to Help Manage Cash Flow is simple and easy. At first, you might think that it’s not for you, or that it’s too much of a hassle, but when you’re used to it, you’ll see that your business will run smoothly when you know how to put your eggs in different baskets.

The first step to effectively and efficiently manage your cash flow is to set up different bank accounts.

The first account you should create is for your day-to-day transactions- your Transactions Account.

What is a Transactions Account?

A Transactions Account, or your Operating bank account, is a bank account maintained by and in the name of the company for the payment of the operating costs.

How much should I allocate in my Transactions Account?

Because your Transactions Account is where you make payments for your operating costs, this needs to be thoroughly computed so that you will not fall short. You need to allocate at least one month’s worth of expenses in your Transactions Account in order for you to replenish your Transactions Account only once a month. 

To know how much you should allocate, look at the month where your operating expenses are at their highest. That’s the amount you need to put in your Transactions Account at all times.

Why is having a Transactions Account important?

Having a Transactions account that is intended for your day-to-day transactions will improve cash flow as you can track the cash that you are spending. Additionally, with a separate account, you will find it easier to budget and spend less because you know exactly how much money you are allocating for your expenses. That way, you have more control over what and where you spend the money on.

What’s more, is that having a Transactions Account will give you peace of mind because you know that you have saved up enough money for the expenses of the business and that there are no day-to-day transaction expenses that are left unpaid.


If you are having trouble managing your cash flow, take a look into your open bank accounts and ask yourself whether these are serving you well, and how well are you using them.

No matter what kind of multiple bank account system you use, knowing how your money flows is an important first step to managing your finances.

Having trouble managing your cash flow? Talk to us here at Stream Accounting and we will surely provide you with a custom-made approach for your business.

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