Another question to which the accountants answer is … it depends.
It depends on your cashflow forecast and the likelihood of all the money coming in on time. Next week I’ll give some tips on what to include in your cash flow forecast if you’ve never done one before and also some software recommendations if you need to prepare regular cash flow forecasts.
The general guideline is to keep instant access to a minimum amount that is enough to cover 3 months of costs.
If you’re a pre-revenue startup dependent on funding (common in the tech sector) then you will also want to track your run rate. This is the number of days’ cash that you have in your business. Work out your average daily costs and divide your cash balance by this amount.
If you are holding over £50k on deposit then Allica Bank are currently offering some good deals (they’re not paying me any commission 😉)