When you run a business, it is important that you try your best to keep your business and personal checking account separate. If you start to transfer money between these accounts, you’ll find that you encounter problems in the future. In this article, we are going to discuss some of the ways that you can keep your accounts separate so keep reading if you’d like to find out more.
Get A Business Account
This first tip seems obvious, but a lot of people try to keep their business and personal funds in the one account. By opening up a business checking account with a trusted bank, you can ensure that your finances are kept separate and you will find it easier to understand your taxes at the end of the year. When you do this, you should also ask for a business credit card which you can use for strictly business purchases. You must make sure that you don’t get your credit cards confused in order to keep your finances separate and avoid losing money on either end.
Another great way that you can keep your personal and business accounts separate is by keeping any receipts that you have. If you are in the habit of keeping receipts for your personal items, you should get some folders for the different accounts. If you are able to store your receipts separately, it will make your life a whole lot easier when you are doing your taxes and when you are trying to find out what you have spent your money on. Make sure to keep all of your receipts and keep them separate.
Pay Yourself A Salary
If you are in charge of your own business, paying yourself a salary is a great way to ensure that you keep your finances separate. Often people who run their own business will take money when they need it, meaning that sometimes they are overpaying themselves or even not paying themselves enough. If you pay yourself a salary, you can teach yourself to budget yourself more as the cash that you have in your personal account is all you have to keep you going until you get the next month’s wage. Be careful with your funds and don’t let these accounts spill over onto each other.
Keep Track of Expenses
When you run a business, you might find that you are using personal items such as cars or equipment for work use. Although this is something which can be very useful and save you money in the long run, you should make sure to keep track of when you do this. The great thing about using your own car for company use is that you might be able to save money on tax depending on how often you use it.
Overall, it is very important that you keep your personal and business accounts separate. Don’t let them get mixed and you’ll save yourself a lot of hassle.