Banking & Cash Management Glossary
Key terms related to banking and cash management that your bookkeeper or accountant may reference.
Business Chequing Account
Your primary operating bank account, where revenue comes in and operating expenses go out. Every business needs one, kept completely separate from personal accounts.
Cash Flow
The movement of money into and out of your business over a period of time. Positive cash flow means more came in than went out. A business can be profitable on paper but still run out of cash if timing is off (e.g., waiting on invoices while expenses come due).
Cash Reserve
Money set aside in a savings or holding account for a specific purpose, typically taxes owed, GST/HST to be remitted, or an emergency buffer. Having a dedicated reserve prevents you from accidentally spending money that's already spoken for.
Foreign Currency Account
A bank account that holds money in a currency other than CAD. Relevant if you receive payments in USD or other currencies. Multi-currency bookkeeping has specific rules in QBO, so set this up with your Mesa CPA team.
Line of Credit (LOC)
A flexible borrowing facility from your bank. You draw on it when you need cash and repay it as cash comes in. Useful for managing short-term cash flow gaps. Interest is only charged on the amount drawn.