When you are new to the business world, it can be difficult to get your finances in order straight away. You will be busy setting up accounts with your suppliers and arranging payments for your employees. It is the time when it can be easier to pay someone with a personal check rather than a business one because your money may be shared between both accounts when you first start. However, here are a few reasons why it is best to keep your personal and business accounts separate.
Start as you mean to go on
When you first start in business, there are a few things that are easier if you begin the right way. One of these things is keeping your personal and business banking accounts separate. You might not think it is a big deal in the beginning, but it can make more work for you in the end.
When it comes time to do your taxes, it will be much easier to just rely on your business bank statements instead of having to reconcile entries from both accounts.
Building a Professional Image
From the beginning, you want to start creating a professional image for your clients and customers. It means that you must deal with all areas of your business in a professional way, especially where money is concerned.
Having a business banking account is a good start, but you also want to use specially printed business checks as well. There are lots of providers that can create custom checks that have your logo and details on them, and using them is be more professional than working with personal checks.
Keep Separate Receipts
Learning to keep receipts separate is another good idea. Not only do you need to keep business and personal receipts apart, but it will also help if you put them in order of a month. That way, when you need to find a receipt for taxes or other reasons, you will be able to locate it quickly.
It may sound obvious, but make sure you can find your receipts when you need them, keeping them in a secure filing cabinet is a good idea because it is big and hard to lose!
Set a Business Budget
It can be easy to overspend, especially when you need to buy equipment and other furniture for your new business. However, it is still important to keep yourself within budget, so you don’t run into trouble at a later date.
You also need to keep your personal finances in order and resist the urge to transfer personal money into your company account. Although there are times when this cannot be avoided, it can become a dangerous precedent that could lead to personal financial problems.
Being able to juggle your personal and business finances is something that can be difficult to get right at first, but the benefits of doing so are worth the effort involved. It isn’t just you, of course, that needs to be vigilant, your family and any business partners you have, all need to be aware of this and do their part to help.