Hi Victoria, here from the bookkeeper hub. Again, just having a quick chat today about deposits in your business.
Do you get payments in advance or deposits that are for particular jobs or items, it’s a really good habit to actually move them to a separate bank account when you get paid, so that you can keep them there until you actually do the work that’s required, then you can move it back to your business account.
That means that you’re not always robbing Peter to pay Paul. Honestly builders are the worst at this because they get a deposit for one job, which quite often pays the materials on the previous job. You want to keep them separate. These days, banks will let you have almost unlimited bank accounts with no bank fees if all they do is transfer to and from your main account. You can set up job accounts for all these different deposits that you have. Or if you’ve got a festival or an event and you’re getting deposits for advertising or something like that, and it’s going to be down the track and you’ve got no expenses until it happens. Pop it in a separate bank account. Don’t keep this money in with your normal cash flow. Because what happens Parkinson’s Law is going to kick in and chances are you’re going to spend a lot.
