The business account shows €6,000, so the new laptop feels affordable. Three months later the tax bill arrives, and part of that €6,000 was never yours.
In short: use three accounts. Client payments land in Operating, a fixed share goes straight to Tax reserve, and you pay yourself a set amount into Personal on the same day each month. Each balance then answers one question, and none of them pretends to be profit.
- Lands in Operating
- Tax share to Tax reserve
- Costs paid from Operating
- Fixed pay to Personal
This is general guidance, not tax or legal advice. Which accounts you need, and the rate you set aside, depend on your country and your business form; ask your accountant.
A worked example
Made-up but realistic: a one-person consultancy takes in €6,000 this month and sets aside 25% for tax (a made-up rate, yours will differ).
| Where it goes | Amount | |
|---|---|---|
| Tax reserve (25%) | its own account | €1,500 |
| Costs (software, phone, travel) | paid from Operating | €1,100 |
| Your pay | to Personal on the 1st | €2,800 |
| Left in Operating | buffer for a slow month | €600 |
€2,800
With one account, the €6,000 balance is a mix of tax, costs and pay, and the only way to see which is which is to sort it later. With three, the €1,500 is gone from view the day the money comes in, the costs come out of Operating, and your pay is the same every month.
The steps
1. Open the accounts
A business account for Operating and a separate savings account for Tax reserve. Your personal account stays as it is. In some countries a business account is required for some business forms; your bank or accountant can tell you.
2. Pick the tax share
Ask your accountant what share of income to set aside. Until you know, a round, cautious number is better than none, and you can lower it later.
3. Move the tax share the day money lands
One transfer per client payment, the same day. If it waits until the end of the month, it gets spent.
4. Pay yourself a fixed amount
The same amount, on the same day, from Operating to Personal. Not "whatever is left". A fixed pay is what makes the household budget work (freelance income).
5. Pay business costs only from Operating
No business purchases on the personal card. Every exception is a receipt to chase later (recordkeeping).
The traps
- Treating the Operating balance as profit. It holds next month's costs too.
- Paying yourself only when a personal bill is due. That makes your pay depend on your bills, not on the business.
- The quick business purchase on the personal card. One is easy to remember. Twenty are not.
- Dipping into Tax reserve for a slow month. Build the Operating buffer instead; the tax bill comes anyway.
Check your buffer
The free emergency fund calculator works for a business too: enter your monthly business costs plus your own pay, and see how many months your Operating buffer covers.
One thing to do today
Look at your business account and write down how much of today's balance is tax you'll owe. If you can't say, that's the reason to open a Tax reserve this week.
Where Volora fits
In Volora, each account is a wallet: Operating, Tax reserve and Personal. A client payment is income in Operating, and the tax share and your pay are transfers out of it, so each wallet shows exactly its own job. A Business project with categories and budgets tracks costs, and a low-balance alert on Operating warns you before a slow month gets tight. Volora doesn't connect to banks; you record the payments, or import a CSV from your bank.