Bank Balance and Cash Tracking

Bank Balance and Cash Tracking

Bank balance tracking in MerchantFlow records your cash position over time and reconciles it against what your P&L says you should have. You enter the balance manually; MerchantFlow compares it with a tracked balance derived from your revenue and costs, and shows you the gap.

What Is Bank Balance Tracking?

Bank balance tracking is two numbers side by side:

• Actual Balance -- your cash across every account you track, using the most recent balance you entered for each one
• Tracked Balance -- what MerchantFlow calculates your balance should be, starting from your first recorded balance and applying every revenue and cost since

The difference between them is the variance, and it is the point of the feature: a persistent gap means something is happening to your cash that your P&L does not know about.

How the Tracked Balance Is Calculated

Tracked Balance = First recorded balance
                + Net revenue
                - (COGS + Ad spend + Payment fees + Tax
                   + Shipping cost + Fulfillment cost
                   + Variable costs + Amortised expenses + OPEX)

Variance = Tracked Balance - Actual Balance

Every balance is converted into your workspace currency using the exchange rate on the day it was recorded, so a GBP account and a USD account can be added together. If a balance cannot be converted, reconciliation is unavailable rather than approximated.

If you track more than one account, the tracked balance starts on the date all of your accounts had a recorded balance. Adding a new account moves that start date forward, because MerchantFlow cannot reconstruct history for an account it had never seen. Backdating an opening entry for the new account moves it back again.

Reading the Variance

Why Track Your Bank Balance?

• Catch untracked costs -- a widening variance is usually an expense you have not recorded
• Trust your P&L -- when actual and tracked agree, your profit numbers reconcile to real money
• Monitor business health -- see whether your business is accumulating or burning cash
• Spot payout and timing gaps -- money earned is not the same as money settled
• Tax planning -- set aside cash for estimated taxes

How to Access Bank Balance

Navigate to Profit > Bank Balance (/dashboard/pnl/bank-balance).

The page shows:

• The Actual Balance card
• The Tracked Balance card
• The reconciliation banner comparing the two
• The add/edit balance form
• A Balance History table of every entry you have recorded

Bank balance is available on every plan. How far back the history reaches follows your plan's history window: 90 days on Starter, 12 months on Pro, unlimited on Plus.

How to Record Bank Balances

Manual Balance Entry

1. Go to Profit > Bank Balance
2. Click to open the balance form (or land on the page with ?add=1 to open it directly)
3. Enter:
   • Account -- which bank account this balance belongs to, or Add a new account to create one. A new account takes a name and its own currency, chosen from MerchantFlow's full currency list
   • Balance -- the amount, which cannot be negative. It is always recorded in the selected account's currency, so there is no separate currency field on the entry itself
   • Date -- when you checked the balance (defaults to now)
   • Notes -- optional, up to 1,000 characters (e.g., "End of month reconciliation")
4. Save

Existing entries can be edited from the Balance History table.

Recommended recording frequency:

• Minimum: Weekly
• Recommended: Daily or every few days

MerchantFlow does not connect to your bank. There is no Plaid, Stripe, or payout-based balance feed - every entry is one you make.

Staleness Reminders

If your most recent entry is over a week old, a badge appears reading "Balance not updated in over a week", and a modal offers to bring it up to date:

• Update balance now -- opens the entry form
• Skip for now -- snoozes the reminder for 3 days
• Stop reminding me -- mutes it permanently for your account

The reminder state is stored on your user account rather than in your browser, so it follows you across devices and works inside the Shopify admin embed.

Tracking Multiple Bank Accounts

Add each real bank account under Manage accounts, give it a name and its own currency, then record balances against it. MerchantFlow adds your accounts up for you and shows the breakdown beneath the total, with each account converted at the rate on the day you recorded it.

You no longer need to add your accounts up by hand. If you had been entering several balances on the same day as separate rows, the page will offer to help you split them into named accounts - do that, because until they are named only one of them counts towards your cash position.

An account you have closed can be archived: it keeps its history but stops counting towards your current balance.

If one of your accounts is in a currency we cannot get a rate for, the combined total is withheld and that account is called out, rather than a smaller total being shown as though it were complete.

Understanding Balance Metrics

Current Balance

Your cash across all active accounts, displayed prominently at the top of the page. This represents actual cash available today -- it does not include accounts receivable, inventory value, or equipment.

When you track several accounts, the "last updated" date shown is the oldest of them, so one freshly-updated account cannot hide four that have gone stale.

Balance History

Every entry you have recorded, newest first, with its date, account, amount, currency, and notes. You can edit an entry to correct it or move it to a different account, or delete one you added by mistake. Recording regularly is what makes the tracked-balance comparison useful: with only two entries months apart, a variance tells you very little about when the drift started.

Investigating a Variance

A significant variance usually comes from one of these:

• Costs MerchantFlow does not know about -- expenses you have not entered. See Expenses.
• Missing or wrong COGS -- see COGS Management
• Owner draws, loan repayments, or transfers -- real cash movements that are not P&L costs
• Payout timing -- money earned but not yet settled from your payment processor
• A mistyped balance entry -- check the history table first

There is no burn-rate chart, runway figure, or cash forecast on this page. For profitability trends use the P&L; for what is scheduled to leave your account, use Expenses.

Cash Flow vs. Profit

Understanding the Difference

• Profit = Revenue - Expenses (on paper)
• Cash flow = Cash in - Cash out (in the bank)

You can be profitable but have no cash. For example, if monthly profit is $10,000 but customers pay in 60 days and you pay suppliers immediately, you are profitable on paper but may be cash-negative in practice. Bank balance tracking shows your actual cash position, not just profitability.

Common Cash Flow Timing Issues

• Delayed revenue: Net 30 payment terms, marketplace holdbacks, payment processor delays, refund reserves
• Upfront expenses: Inventory purchases, annual subscriptions, equipment, marketing campaigns (cost now, revenue later)
• Seasonal swings: Q4 revenue spike with Q3 inventory spending, summer slowdown with ongoing expenses

Monitor your bank balance to navigate these timing mismatches. See the P&L Overview for the complete financial picture.

Best Practices for Cash Tracking

1. Record balance regularly -- set a recurring reminder, check every Monday morning, and do not skip even if nothing appears to have changed
2. Separate business and personal -- use a dedicated business account and track only business accounts in MerchantFlow
3. Maintain a cash reserve -- target 3-6 months of operating expenses as a buffer
4. Review weekly -- check the balance and the variance in a 5-minute weekly review
5. Chase a growing variance early -- the sooner you catch it, the fewer weeks you have to reconstruct
6. Reconcile with accounting -- compare MerchantFlow balance to your accounting software monthly
7. Use for decision-making -- consult the balance before hiring, increasing ad spend, or signing leases

Troubleshooting Bank Balance

Tracked Balance Looks Wrong

The tracked balance is only as complete as your P&L. Check that expenses are recorded, COGS is set for your top products, and your integrations have synced. Recording balances more often narrows down when the drift began.

Reconciliation Is Unavailable

This happens when your earliest balance entry is in a currency MerchantFlow could not convert on the day it was recorded. Add an entry in your workspace currency to restore the comparison.

Balance Does Not Match Bank Statement

Verify the correct account, amount, date, and currency. Check for pending transactions. Contact support if the discrepancy persists.

Frequently Asked Questions

Can I connect my bank account directly to MerchantFlow?

No. Bank balance tracking is manual entry only - there is no Plaid, Stripe balance, or PayPal connection, and payout data is not used to update the balance.

How does bank balance relate to the P&L?

The bank balance shows actual cash in your account, while the P&L shows profitability on paper. Both views are important -- a profitable business can still run out of cash due to timing mismatches.

How often should I update my bank balance?

Daily or every few days keeps the reconciliation tight. After a week without an entry MerchantFlow starts reminding you.

Does the tracked balance include upcoming subscription renewals or scheduled payments?

No. The tracked balance is backward-looking - it applies revenue and costs that have already been recorded. It is not a forecast and does not deduct anything scheduled for the future.

Related Guides

• Expense Tracking -- track business expenses
• P&L Overview -- complete financial picture
• Bundles -- see how grouped products affect cash and margin views
• Attribution -- connect marketing spend to revenue
• Dashboard Overview -- navigate MerchantFlow

Last updated: August 30, 2026