It’s a good idea to keep your business and personal finances separate. You get legal protections and tax benefits when you track business finances separate from personal. Mixing money can void those protections and make your tax accountant grumpy.
Here are four ways to manage your business finances if you have your money co-mingled.
Open a Business Bank Account
Keep your business expenses in one place. Use your business checking account for business expenses. Yes, you may have to shop differently, but there are benefits. Even if you can’t afford a business account, open a separate personal account to maintain your business.
Use a Business Credit Card
A business credit card can help you build business credit, but it can also help you maintain separate accounts for personal and business. You may find some business perks through the credit card as well.
Pay Yourself a Salary
Keeping finances separate also means that you can’t just take money when you want. Treat yourself like an employee to track your business finances more effectively and to maintain more control over your cash flow. This can help you set aside money for taxes and let you save money for the business.
Use Automatic Transfers to Save Money and Pay Bills
Instead of using your personal credit for business expenses, make sure that you’re paying bills out of your business account. Set up automatic payments for regular bills. Use an automatic transfer to help you save money for your business.
If your business doesn’t have enough money coming in to sustain itself without regular help from your personal account, you may want to think about how to change your business model to make it profitable. Be professional in handling your business finances for the success of your business.
Contact Kasher Capital for lending options to grow your business.