How to build a budget based on cashflow with pockets and virtual cards

Challenge: Sticking to a budget for your business often requires manually maintaining a spreadsheet or downloading a separate budgeting app. This is especially tricky if you have inconsistent cashflow or if you need to balance urgent, ongoing costs like operating expenses with longer-term business needs like quarterly taxes, new equipment purchases, or a “rainy day fund.”

Solution: Found lets you create sub-compartments of money, called “pockets”, within your same business checking account so that you can see how much cash you have for various business needs. You can automatically set aside a percentage into each pocket every time you get paid or you can manually transfer money between pockets at any time. 

You can then create corresponding virtual cards and link each card to a pocket so that you control how much you spend in each of those areas. Together, this helps business owners build an intuitive budgeting system based on allocating cashflow to the ongoing needs of their business and then managing expenses accordingly.

Step-by-Step Instructions

Step 1: Create pockets for common business needs or savings goals

In the Banking home screen, select Add a Pocket to create a new Pocket. You can select a color, icon, and even add a savings goal for each new pocket.

Your account comes with a Primary and a Taxes Pocket by default, and you can create up to 8 custom pockets for other areas such as Owner’s Pay, Contractor Payments, Operating Expenses, and more.

Step 2: Set your “deposit allocations”

Deposit allocations set the percentage of incoming deposits that you will automatically allocate to each pocket. To update your allocations, choose Manage allocations on the Banking home screen.

We will allocate money to your Taxes pocket first, then to each of your custom pockets, and will set the remaining cash into your Primary pocket.

Step 3: Create corresponding virtual cards with spending limits

In your Cards section, you can manage your physical debit card and any other physical or virtual cards in your account.

Select Create new card to order another physical card or create up to 20 virtual cards. When you create a new virtual card, you can set a spending limit and assign a pocket to draw funds from.

Learn more: How do I share a virtual card?

For example, if you have a custom pocket for Travel Expenses, which gets 10% of all income into your account, you can create a Travel Expenses virtual card linked to that Pocket with a spending limit of $2,000.

This will help you see how much of your allocated Travel Expenses budget you still have left to spend and will ensure that you do not spend beyond a pre-set limit in that category.

Step 4: Filter your reports to see income and expenses by pocket

In the Reports section, you can see monthly reports such as a profit and loss as well as breakdowns of income and expenses by category.

You can also filter each of these reports by pocket, which is a convenient way to see how different parts of your business or categories of your budget are performing.

For instance, if you use a pocket and virtual card to set aside money for and manage spend related to your Operating Expenses, you can drill down into reports specific to those transactions.