For many small business owners, making clear lines of distinction between their business and personal finances is not a priority. But, it should be. If your personal and business finances are not clearly separate, you may be putting yourself at risk. If your business gets into a situation where money is owed to another entity, you could be financially responsible. Here are some tips for separating your financial interests.
- Keep Separate Accounts.
- Keeping a business checking account will not only ensure your business is separated financially from your personal accounts, but will also makes things easier for you come tax season. Business bank account statements will be simple and easy to review.
- Keep A Business Credit Card
- Keeping a business credit card allows you to build up your business’ credit and further distance your personal credit from your business.
- Avoid using your personal credit cards at all costs-this mixes the two.
- Establish a Set Standard for Business Expenses
- Often, small business owners are not quite sure what they can expense for business and what does not meet the qualifications. Set the standards ahead of time and go into every situation knowing if it qualifies as a business expense.
- Using a Home Office?
- Many small business owners begin their business out of their own home. But even though you may be using your home to run your business, you need to careful about how you handle business costs.
- Make sure you’ve discussed what you can and cannot claim with your tax or legal advisor.
- Organize Your Business Receipts
- You should make sure you are keeping your business receipts in a separate place from your personal financial papers.
- Keeping them separate and organized will also help you in the case of an audit.
For help with business insurance decisions call AmeriAgency at 615-209-9362.