Separating your Business from your Personal finances

Posted on May 24, 2013 | 0 comments

Having a business always has an impact to your personal life. You should always make sure that you balance work and home and that includes your personal finances. One major mistake that business owners do is to not separate their business finances from their personal ones. Although you might think that there is absolutely no reason for you to do so since your business is quite small, you might regret this move when your business is already expanding.

The benefits of separate financial records
When you move your money from your personal finances to your business and forth, it helps to keep a record of each area in detail. This way you’ll know that what you bring in will be given back to you and you don’t only bring in money time and time again. Filing for business taxes can also be a challenge when you pay for your business expenses with your personal income.

What can a separate business fund do to you
When you have a separate business fund, you have the assurance that your personal income would not be touched in the event that your business is sued or when your business can no longer pay for a loan.

Separate bank accounts
This initiative makes a huge difference once you start filing for business tax. There would be a clear line as to where your business and personal money is.

Separate credit card purchases
When you have a credit card meant for the business account, make sure that you do not pull it out on occasions where you make personal purchases. Even though you promise to make a note that a payment should be made to your business account because of a personal expense you made, something may come up and you might forget about it.

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