Bank Accounts

Managing your business bank accounts

Properly managing your bank accounts is essential for tracking cash flow and maintaining accurate financial records. The Finance Module allows you to connect and manage all your business bank accounts in one place.

Types of Bank Accounts

Checking Accounts

Used for day-to-day transactions like paying suppliers, receiving customer payments, and covering operating expenses. Most tailoring businesses should have at least one primary checking account.

Savings Accounts

Used for setting aside funds for future needs, such as tax payments, equipment purchases, or seasonal inventory buying. These typically earn interest but have limited transactions.

Credit Card Accounts

While not technically bank accounts, business credit cards are tracked similarly in the Finance Module. They're useful for online purchases, travel expenses, and building business credit.

Petty Cash

A small amount of physical cash kept on hand for minor expenses. In a tailoring business, this might be used for small supply purchases, delivery fees, or refreshments for customers.

Adding a Bank Account

Steps to Add a Bank Account

  1. Go to Finance > Banking
  2. Click "Add Bank Account"
  3. Enter the bank name
  4. Enter the account number (or last 4 digits for security)
  5. Select the account type (Checking, Savings, Credit Card, etc.)
  6. Enter the opening balance and balance date
  7. Add a description (optional)
  8. Click "Create Account"

Setting the Opening Balance

The opening balance should match your bank statement on the date you start using the Finance Module. This ensures your records align with your actual bank balance from day one.

Recording Bank Transactions

You can record various types of bank transactions to keep your accounts up-to-date:

Deposits

Record money coming into your account, such as customer payments, loan proceeds, or owner contributions.

  1. Go to Finance > Banking > Transactions
  2. Click "Add Transaction"
  3. Select "Deposit" as the transaction type
  4. Enter the amount, date, and description
  5. Select the appropriate income account
  6. Click "Save Transaction"

Withdrawals/Payments

Record money going out of your account, such as supplier payments, rent, utilities, or equipment purchases.

  1. Go to Finance > Banking > Transactions
  2. Click "Add Transaction"
  3. Select "Payment" as the transaction type
  4. Enter the amount, date, and description
  5. Select the appropriate expense account
  6. Click "Save Transaction"

Transfers

Record money moving between your accounts, such as transferring funds from checking to savings or vice versa.

  1. Go to Finance > Banking > Transactions
  2. Click "Add Transaction"
  3. Select "Transfer" as the transaction type
  4. Select the "From" and "To" accounts
  5. Enter the amount, date, and description
  6. Click "Save Transaction"

Bank Fees and Interest

Record bank charges, fees, or interest earned on your accounts.

  1. Go to Finance > Banking > Transactions
  2. Click "Add Transaction"
  3. Select "Bank Fee" or "Interest Earned"
  4. Enter the amount, date, and description
  5. Click "Save Transaction"

Best Practices for Bank Account Management

  • Separate Business and Personal: Always keep your business and personal finances separate with dedicated business accounts.
  • Regular Reconciliation: Reconcile your bank accounts monthly to catch errors and ensure accuracy.
  • Document Everything: Add detailed descriptions to all transactions for better tracking and tax preparation.
  • Monitor Cash Flow: Regularly review your bank balances and upcoming transactions to avoid cash shortages.
  • Security: Use strong passwords and two-factor authentication for online banking access.

Real-World Example

"Khalid runs a tailoring business with three employees. He maintains three bank accounts: a primary checking account for day-to-day operations, a savings account for taxes and large purchases, and a separate checking account specifically for payroll. In the Finance Module, he's set up all three accounts and categorized them appropriately. Each morning, he checks his account balances and recent transactions. When a customer pays for a custom suit, he records the deposit in the primary checking account and categorizes it as 'Custom Tailoring Revenue.' Every two weeks, he transfers money from the primary account to the payroll account and records it as a transfer. This system helps him keep his finances organized and ensures he always has enough money set aside for taxes and employee wages."

BankingReconciliation