Business BankingCash Management

How Many Bank Accounts Does A Business Need?

At least 4.

And I recommend this approach for ALL of our clients.

We all know that cash management can be a big issue when trying to run a business. Having to manage cash on top of everything else can become a major headache.

I’m not just talking about chasing customers for payments.

It’s also about making payments, and being worried about whether there is enough to:

  • Pay suppliers
  • Pay taxes
  • Pay the weekly or month wage bill
  • Buying new assets, equipment and materials
  • Recruit new team members
  • Pay yourself!


An approach I adopted early on in my own business was to set up 4 bank accounts, each with a clearly defined purpose. You may want more than 4 if you want to get more specific, but for me, this is the minimum number.

And, I’m excluding currency accounts from this, if you trade in multiple currencies its you’ll need much more than 4.

By the way before we go into any more detail, I am not a fan of the ‘Profit First’ approach; for business owners with some financial acumen, this just doesn’t make logical sense to me.


The four accounts:


Current Account

This is used for day to day, week to week trading activities of the business. Receipts from customers, payments to suppliers. It’s the bank account that has the most transactions and whose balance can fluctuate the most.


Tax Savings Account

As the name suggests, this account is the one you use to save for tax bills. Corporation tax, VAT, PAYE and personal income tax (if you run a limited company and pay yourself dividends).


Investment Account

This is the account you use to build up funds for those purchases you’ll need in the future, whether it’s a new vehicle for the business, deposit and refurbishment costs for the new office or recruitment fees and first month’s salary for a new employee.


Savings Account

This is the account that is for YOU as the business owner. You may want to call it a rainy-day fund. Whatever you call it, its to be used for you and your family as and when its needed. You may use it save for a big family holiday, house deposit, to pay off the mortgage, your daughter’s wedding or a University fund for your children.


Each of these bank accounts has a clearly defined and specific use which I explain in detail to business owners when we help them with their business cash management. In our next blog, ‘How To Use Your Four Business Bank Accounts’, I’ll set out a common sense approach and strategy to managing the cash in your business.

Once you start this approach you’ll wonder why you didn’t do this sooner.


If you need help with cash management in your business, or just have some general business questions, please get it touch. We’d love to help.