1. Simpler accounting
Multiple transaction accounts can make managing your finances a lot simpler, especially when it comes to tax time. To get a clearer view of how money is moving in and out of your business, consider opening separate transaction accounts for a range of different categories or "buckets". These could include:
- Everyday expenses
- Receiving payments
- Payroll
- Future projects
- Emergency money
2. Avoid missed payments and fees
Tracking your cash flow can be tedious. But being more intentional with your money and dividing it into different accounts can help avoid unexpected expenses. For example, keeping a designated Business Transaction Account with enough money to cover all of your regular bills means you'll be less likely to be charged fees for missing a payment, or overdrawing your account.
3. Better budgeting
Instead of sifting through hundreds of transactions in the one account, separating your money into specific accounts can help you budget more efficiently and effectively. For example, improved visibility over your monthly expenses can make it a lot easier to plan and keep your budget on track.
4. Stronger security
It's no surprise that staying safe online continues to be front of mind for many business owners. According to the ACCC, Australian businesses reported losses of $23.2 million from scams in 2022 - up 73% from 2021.1 Keeping your accounts safe is our top priority. But if you're the victim of a scam, having your money spread across multiple Business Transaction Accounts, rather than sitting in the one account, may help reduce your losses.
What to look out for
In addition to the associated fees and charges, keep in mind that opening multiple accounts will require more admin. So you should monitor each account to make sure it's serving its intended purpose.
If keeping up with each of your accounts is becoming too difficult or costly, consider consolidating them to reduce your workload and fees.
