Bank Balance and Cash Tracking

Bank balance tracking in MerchantFlow monitors your daily cash position and tracks balance changes over time, helping you understand your cash runway, burn rate, and overall financial health. This feature gives e-commerce merchants the visibility needed to make informed spending and investment decisions.

What Is Bank Balance Tracking?

Bank balance tracking records and analyzes your available cash over time:

• Current cash position -- what you have in the bank right now
• Balance history and trends -- how your cash position has changed
• Cash runway calculation -- months until your balance reaches $0
• Burn rate analysis -- how fast you are spending cash
• Balance projections -- forecast of future cash position

Why Track Your Bank Balance?

• Avoid cash surprises -- know when you are running low before it becomes critical
• Plan ahead -- forecast when you will need additional funding
• Monitor business health -- track whether your business is accumulating or burning cash
• Make confident decisions -- base spending decisions on actual runway data
• Tax planning -- set aside cash for estimated taxes

How to Access Bank Balance

Navigate to Dashboard > P&L and expand the Bank Balance section.

The Bank Balance Dashboard shows:

• Current balance
• Balance trend chart (last 90 days)
• Burn rate (average daily/monthly cash change)
• Runway (months until cash runs out at current rate)
• Balance forecast
• Recent balance entries

How to Record Bank Balances

Manual Balance Entry

1. Go to Dashboard > P&L > Bank Balance
2. Click "Add Balance"
3. Enter:
   • Date -- when you checked the balance
   • Amount -- current bank account balance
   • Account -- which bank account (if tracking multiple)
   • Note -- optional (e.g., "End of month reconciliation")
4. Click "Save"

Recommended recording frequency:

• Minimum: Weekly
• Recommended: Daily or every few days
• Best: Automated integration (coming soon)

Quick Balance Update

For the fastest entry:

1. Click the bank balance badge in the navigation bar
2. Enter today's balance
3. Press Enter
4. Balance is saved instantly

This is ideal for quick daily check-ins without navigating to the full dashboard.

Tracking Multiple Bank Accounts

If you have multiple accounts:

1. Add a balance entry for each account separately
2. Label each account (e.g., "Operating Account", "Savings", "Reserve")
3. View the total combined balance across all accounts
4. See the breakdown by individual account

Example: Operating $25,000 + Savings $50,000 = Total $75,000.

Understanding Balance Metrics

Current Balance

Your latest recorded balance, displayed prominently at the top of the Bank Balance section. This represents actual cash available today -- it does not include accounts receivable, inventory value, or equipment.

Balance Trend

A chart showing your balance over time. Interpret trends as follows:

• Upward trend -- accumulating cash, opportunity to reinvest in growth
• Flat trend -- breaking even, sustainable but limited growth investment
• Gradual decline -- controlled spending, monitor closely
• Steep decline -- burning cash fast, take corrective action
• Erratic swings -- inconsistent cash management, review expense timing

How to Calculate Burn Rate

Burn rate measures how fast you are spending cash:

Daily Burn Rate = (Starting Balance - Ending Balance) / Days
Monthly Burn Rate = Daily Burn Rate x 30

• Positive burn rate: losing cash (spending more than earning)
• Negative burn rate: gaining cash (earning more than spending)
• Zero burn rate: breaking even

Example: Balance 30 days ago was $100,000, today is $85,000. Burn rate = $15,000 / 30 = $500/day or $15,000/month.

What counts as healthy depends on your business stage:

• Startup: High burn acceptable if investing in growth
• Established: Low or zero burn expected
• Growth stage: Moderate burn acceptable if scaling revenue

How to Calculate Cash Runway

Runway is the number of months until your cash runs out at the current burn rate:

Runway = Current Balance / Monthly Burn Rate

Example: $60,000 balance / $10,000 monthly burn = 6 months runway.

Runway thresholds:

Balance Forecast

The forecast projects your balance for the next 6-12 months based on current balance, average burn rate, historical patterns, and seasonal trends.

Use the forecast to plan major expenses, time fundraising rounds, set growth targets, and adjust expense budgets. Note that forecasts assume current trends continue -- actual results depend on business changes.

How to Set Up Balance Alerts

Get notified when balance drops below thresholds:

1. Go to Settings > Notifications
2. Enable "Balance Alerts"
3. Set thresholds:
   • Balance below a dollar amount
   • Runway below a number of months
   • Burn rate exceeds a monthly target
4. Choose notification method (email or dashboard)

Recommended alerts: Balance below one month of expenses, runway below 6 months, and daily burn rate exceeding your target.

MerchantFlow also provides automatic critical balance warnings when balance drops below 3 months of expenses, burn rate is accelerating, or the forecast shows $0 balance within 90 days.

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 balance, burn rate, runway, and forecast in a 5-minute weekly review
5. Plan major expenses -- check runway impact before large purchases
6. Reconcile with accounting -- compare MerchantFlow balance to your accounting software monthly
7. Use for decision-making -- consult balance and runway before hiring, increasing ad spend, or signing leases

Reporting and Exports

Generate balance reports from Dashboard > P&L > Bank Balance by clicking the "Report" button. Available report types:

• Balance summary
• Burn rate analysis
• Runway projection
• Full cash flow report

Export as PDF or CSV for investor updates, board meetings, or accounting records.

Basic cash flow statement structure:

Starting Balance: $X
+ Cash In (Revenue collected)
- Cash Out (Expenses paid)
= Ending Balance: $Y
Change: $Y - $X

Troubleshooting Bank Balance

Burn Rate Seems Wrong

Verify that balance entries are accurate and recorded regularly. Check that no major one-time events are skewing the average. Record balance more frequently for more accurate burn rate calculations.

Runway Shows "Infinite"

This means you have a negative burn rate (gaining cash). No runway concern exists.

Balance Does Not Match Bank Statement

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

Forecast Seems Unrealistic

Forecasts assume current trends continue and do not predict business changes. Adjust expectations for seasonal businesses, new product launches, and one-time expenses.

Frequently Asked Questions

Can I connect my bank account directly to MerchantFlow?

Direct bank integrations (Plaid, Stripe balance, PayPal monitoring) are coming soon. Currently, bank balance tracking uses manual entry.

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.

What is a healthy burn rate for an e-commerce business?

It depends on your growth stage. Established businesses should aim for zero or negative burn (cash accumulating). Growth-stage businesses may sustain moderate burn if revenue is scaling proportionally.

How often should I update my bank balance?

Daily or every few days is recommended for accurate burn rate and runway calculations. Weekly is the minimum.

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: March 14, 2026