Don't Mix Business and Pleasure. Why They Need Separate Bank Accounts
I have to admit. I was not a fan of business accounts. I thought it was just another way for the banking institutions to get more of our money in different accounts. So, I didn't use one for a long time. And just made sure that I kept a record of my business expenses.
And then I realized how easy it is to mix them up . And how important it actually is to have separate homes for your personal and business monies. If for nothing else, for peace of mind.
As business owners, we hear a million times from the accounting gurus.
Separate your business transactions from your personal expenses. Don't co-mingle your expenses and open a business account.
But, does anyone even know why? Does it really matter which credit card you use if you remember to claim the business transactions at the end of the year.
And will the IRS really come after you to check that you have a separate business account?
Or is this all just a scam for the banking institutions to get more of our monies by getting us to open up more accounts through them?
Who knows. It may all be a conspiracy by the IRS and the bailed out banks to get you to open up another account and apply for another credit card.
But, here's the real reason why you should separate your expenses and why it should be the very first step you take in getting your books in order.
- Wealth is attracted to clarity and organization. The fastest, and simplest, way to do that is to cut out the clutter and separate your biz and personal accounts.
- Easily track your expenses. Did you enroll in 24 online courses last month? Right.
- Quickly set income goals. How much did you actually make last month and the 3 months before that?
- Gearing up for your next launch? This will help you budget a little easier this time around.
- You'll feel like a BOSS. It's true, you will. Enough said.
I know that you take your business seriously and the days of treating it like a hobby are long gone.
But, if you're ready to take it to the next level- and regardless of how much you make, there's always another level to strive for- having a clear idea of your current business expenses and income will work magic. You'll instinctively know what's worth investing your money into and what's not.
Do you need to open a specific "business" account? No. This account can be through your local credit union or an online program. The only thing that matters is that your business transactions are not having an affair with your personal side.
Will you slip and mix up your transactions from time to time? Sure we all do.
Bookkeeping is like anything else in your life. It's a practice. Don't judge it, just make an effort to recognize your habits and gently make adjustments.
So, pinky promise that after you read this article you'll designate or open an account just for your business stuff?
Miss Danetha is a business financial expert and helps modern entrepreneurs keep their money.