Managing your business finances as a small business owner can feel overwhelming. Between choosing the “right” business bank account, setting aside tax, and figuring out how to pay yourself consistently, it’s easy to overcomplicate things.
The truth? You don’t need five different accounts to be “good” with money. You just need one clear system that makes sense in real life.
This is where my Overflow Formula™ comes in, a simple money management method that helps you stay organised, pay yourself consistently, and create breathing room without the faff.
Why I Don’t Use Profit First (and What to Do Instead)
Profit First is popular, and I’ll admit I’ve recommended it in the past. But here’s the problem: most people don’t stick with it.
You’re constantly moving tiny percentages around, staring at five balances, and feeling like a failure every time one of those pots hits zero. That doesn’t create safety with money, it creates stress.
And if you’re already in scarcity mode, those empty balances can make it even harder to grow, or even think straight about your next move.
So instead of spreading yourself across five accounts, I simplified.
The Overflow Formula™: A Simple System to Manage Business Finances
Here’s how I run my business money now. You only need one main account (two or three if you like pots/spaces), not five.
The structure looks like this:
- One main account
All your income and expenses run through here. It’s your business hub. - One tax pot
Use your bank’s “pots” or “spaces” (Starling, Monzo, and Revolut all offer this) to set aside a percentage of every payment for HMRC. Pro tip: check what % of your revenue you paid in tax last year, and use that as your guide. - One overflow pot
Any money left after you’ve paid yourself and covered expenses goes here. Overflow is your buffer in slower months.
That’s it.
How to Use One Business Bank Account Month to Month
Here’s what it looks like in practice:
- Log in once a month.
- Check if you’ve got enough in your main account to cover your owner’s pay + monthly expenses (this is your “magic number”).
- If yes → pay yourself and leave the rest for bills.
- If there’s extra → move it into overflow.
- If you fall short → top up from overflow instead of panicking.
One login. One decision. One system.
What to Do If There’s Not Enough Money
Sometimes overflow isn’t there yet, that’s real life. When that happens, I:
- Make a quick sales push or open a short-term offer.
- Temporarily reduce my owner’s pay (but only if I have to).
- Pause savings for a month.
- Remind myself that debt is a tool, not a moral failure, as long as there’s a repayment plan.
What I don’t do is scrap the system. Overflow is there to catch you, and if it’s empty, you problem-solve, you don’t abandon the plan.
Choosing the Right Business Bank Account in the UK
If you’re a limited company, you legally need a separate business account. If you’re a sole trader, it’s optional but highly recommended.
The best business bank accounts in the UK for this setup are ones with pots/spaces built in. Options I rate:
- Mettle by NatWest (free, free accounting software, tax pots)
- Starling Bank (free, great spaces, instant transfers)
- Monzo Business (user-friendly, automations)
- Revolut Business (good for multi-currency and online payments)
If your current bank doesn’t offer this? Switch. Bonus points if you get a referral or joining reward.
How Cashflow Confident Fits In
The Overflow Formula™ is just one piece of managing your business money. To make it really work, you need a bigger plan that ties your owner’s pay, tax, expenses, and savings together.
That’s exactly what I teach inside Cashflow Confident, my step-by-step programme for online business owners who are done guessing with money.
Inside, you’ll learn how to:
- Pay yourself a consistent salary every month.
- Plan for tax and expenses without panic.
- Use overflow to fund your lifestyle and future wealth.
- Finally feel like you’re in control of your business finances.
Because your business should be funding your life, not leaving you frazzled between five different accounts.
FAQs on Managing Business Finances in the UK
Do I need multiple bank accounts for my business in the UK?
No. If you’re a sole trader, you don’t legally need a business account, though it’s best practice. If you’re a limited company, you must have a separate account. But you don’t need five, one main account plus a couple of pots is plenty.
What is the simplest way to manage business finances?
The simplest method is to use one business account, set up a tax pot, and create an overflow pot for your buffer. Then pay yourself consistently like any other expense.
What is the best business bank account for small business owners in the UK?
Starling and Monzo are two of the most popular free accounts with “pots/spaces” that make this system easy. Revolut is another good option if you need multi-currency. But personally? Mettle by NatWest is my fave.
Can I use my personal bank account for business expenses?
If you’re a sole trader, technically yes, but it makes tracking a nightmare. For clarity, tax planning, and paying yourself properly, a business account is the way forward.
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