A founder's guide to operating accounts

We talk to a lot of founders early in their company’s life. The pattern that comes up most often is not, surprisingly, about cash flow or runway. It’s about structure. The founder set up two accounts on day one, opened a third when payroll started, and now — eighteen months later — has a small archipelago of accounts they cannot quite explain.

This post is the structure I would set up if I were starting a company today.

The four accounts you actually need

For most early-stage companies, four accounts is the right number. More than that and you create reconciliation work. Fewer than that and you make audits hard.

1. Operating — the day-to-day account. Vendor payments, receipts, payroll origin. Reconciled weekly.
2. Reserve — at least three months of fixed costs, untouchable by routine operations. Yield matters here, but not as much as the discipline of not spending it.
3. Tax and obligations — federal and state withholding, sales tax (if you collect it), estimated quarterly payments. Funded automatically as a percentage of incoming revenue.
4. Treasury — long-tail cash, sweeping yield. This is the account that grows after a raise.

You can run a hundred-person company on these four accounts. I have seen it done.

The signs you have set this up wrong

• You cannot, in under a minute, answer the question how many days of runway do you have?
• You moved money between accounts six times last month.
• Your bookkeeper sends you a list of unexplained transfers every month-end close.
• Payroll comes from the same account as your stripe receipts.

Each of these is a signal that the structure is doing too much, or too little.

What changes after a fundraise

A fundraise is the moment most founders’ account structure breaks. The new capital arrives in the operating account, sits there for a few weeks, and quietly becomes part of the run-rate cash. Six months later it is hard to tell which dollar was raise capital and which was revenue.

The fix is structural, not behavioral. The raise lands in treasury. Operations move from operating, as before. Treasury sweeps to operating on a schedule (monthly is fine) at a rate that matches your forecast burn. If the schedule needs to change, you change it as a deliberate decision, not as a reaction.

On controls

The most-asked question I get from founders is should I require dual approval on payments? My answer has shifted over the years. I now think the right answer for most companies, even very small ones, is yes — but with a sensible threshold. Below the threshold, single-signer; above it, dual. The threshold should be high enough that it does not slow down weekly operations and low enough that the second pair of eyes catches a meaningful share of mistakes.

The most expensive payment errors I have seen at small companies were not fraud. They were a typo in an account number on a wire that was never going to be reversed. A second approver would have caught it.

What this is not

This is not financial advice. It is, at most, a starting structure that has worked for many of the companies I have watched grow up. Adjust to your situation. But adjust intentionally — and write down the reasons. Future-you, halfway through an audit, will appreciate the note.