Every Business Owner Should Have This

Rainy Day Fund

When we went through the first few months of COVID and lockdowns, there was a valuable thing called a Rainy Day Fund. It is a backup account in case of an unforeseen event, you can get this easy-to-access pot of cash that can save the business. As a business, we shared this concept from 2015 or 2016 onwards wherein we were doing it at workshops. One of the awesome things is we were getting phone calls or emails unexpectedly from people who had come to those workshops back in the day, they started during the middle of lockdowns. 

We’ve been putting away this money for years and it indeed saved our business. It will save our employees throughout turbulent times. I have never seen a better example of this coming in handy as an accountant, but it’s a fulfilling part where people do this and it saves them and exists for that purpose. 


Start with excess cash and contribute regularly

The idea of a Rainy Day Fund is that you start with excess cash, a regular contribution that you almost don’t notice. The contribution goes from your main trading accounts over to a separate bank. So, it’s out of your normal, login and internet banking, you can’t see it build up. 

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Aim for 3 months expenses

The target to aim for is about three months’ worth of expenses. The thought process there is that if your sales are turned off for three months, will you be okay? Will your business be okay to fund those expenses and keep everything going throughout that time? So, that’s the whole reason for three months’ expenses. In that 90-day window or 3 months, you’re able to do something to turn that around or work that out.

If you’re keen to explore changing accountants, we have a non-obligation process to do that. The first step is booking a strategy call with one of our accounting team. It’s a free 20-minute zoom or phone call where you get to meet us to manage your questions. 

From that point, you can consider doing a “Look Under The Hood” with us. There is no obligation to change accountants, but we give you a second opinion if you’re paying too much tax. 

Throughout that process, we can identify any problems we see with your current setup. Anything that your current accountant hasn’t claimed, or tax you may have overpaid, and strategies of how we might fix that going forward. We can run through with you once you book with us. 

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