Separating Your Business and Personal Finances

One of the most important aspects of owning a business is to be able to separate your business finances and personal finances. There are several ways in which you can do this that can really help you in being able to get both business and personal finances organized for good.

Checking Accounts

If you have been doing everything from one checking account, it is time to separate those accounts, completely. You will need to open up a separate checking account for your business finances and make sure that you only use that account for your business; absolutely nothing else. The benefit of setting things up this way is that you will not have to deal with a nightmare when tax time rolls around. You will have easy access to your business bank statements and an easy time finding all the information that you need on your expenses.

Credit Cards

This works much in the same way the checking account works. If you have a personal credit card that you have been also using for your business, it is time to stop and separate this as well. Instead of getting a regular credit card, opt for a business credit card that gives you better benefits.

Business credit cards often give you good deals on interest rates, security, and free account tools for business organization. You can also have easy access to all of your business transactions. A business credit card is also good for making emergency purchases for your company.

Consider getting a business credit card that offers you rewards as well. If you travel quite a bit, there are countless credit cards available that will allow you to earn rewards miles or points towards miles just by using the credit card. This will allow you to get discounts off of your business travel expenses.

Separate Your Receipts

If you have been keeping your business and personal receipts in the same place and organizing them later, it is better to go ahead and keep them separate. Also, if you have both a checking and credit card account for your business, you will need to separate even further.

Keep your business credit card receipts in one box and your business debit card receipts in another. This way, when it comes time to check your receipts against your statements, you can easily find which receipts go to which account. It takes the stress out of figuring out what receipts go to which card and which amounts are matching up to which accounts. On top of all of that, you are also saving yourself a huge amount of time.

Budget Your Business

If you do not already have a budget in place, you need to make one. There have to be limits set up for your business so that you do not run the risk overstepping your personal finances. If you take a certain amount of money out of your personal account to put into your business account, each month, then you have to have a set amount and stick to it.

You want to make sure that you do not take too much away from your personal funds in the process. You can decide on a budget by seeing what your current business bills are and how much money you have left over after those bills are paid. You always want to keep some extra funds available in case of emergency. These extra funds should be separate from your business credit card.

Budget Yourself

If you are going to budget business accounts, you need to budget yourself as well. Remember that you will still have funds going into your personal account from your business account because of payroll for yourself. The best idea on how to make sure you are consistent is to give yourself a monthly salary and never go above it.

This means that you should have the same payment amount coming out of your business checking account and going into your personal account. By not changing up the amount, you can make it easier when checking your business statements.

Separate Business and Personal Items Usage

This can be a bit difficult to do simply because you will have to remember minor details of your everyday schedule. If you are using your car as a company car as well, there are some things to keep track of as you use it. The first step is to make sure you keep track of the mileage that you use when traveling around for work. This also means that you need to keep track of receipts for gas and maintenance on the car as well.

Cell phones are a little different. You need to keep track of your usage so for this, it is just better to have a separate cell phone for your business. It will make it much easier to keep the accounts separate. Also, your cell phone can help you with keeping track of your item usage. There are several apps that are available to help you log gas mileage, total amount of gas spent, cell phone usage, and more for your business and personal life.

Use A Professional Advisor

If you still feel like you may need help with getting things completely organized, you can always call on the help of a professional financial advisor. They can give you one-on-one time and help you take a look at where your business and personal finances are right now and how they can help you organize them to fit your busy schedule.

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