Stop Co-Mingling Funds
As a bookkeeping consultant I have the pleasure of working with a wide range of businesses owners. One common mistake that 50% of them make is co-mingling funds. Entrepreneurs and small business owners please STOP co-mingling funds, I beg of you. If you have not been made aware it is poor business practice and something that happens way to often.
What is co-mingling funds you ask. Co-mingling of funds is when one uses there personal checking account as their business account. There are many reasons why one should not co-mingle personal and business funds. One reason why is, it creates an extensive workload for your bookkeeper/accountant who has to spend countless hours deciphering between what is a business expense and what is not. Another reason is, the co-mingling of funds limits your ability to see your company’s growth in revenue. It is EXTREMELY important to separate personal income from business income. Without separating the two It is hard to get a clear picture of how your business is doing financially.
Tips to help resolve your co-mingling funds issue
The first step to take in solving this problem is open a business checking account. Be sure to shop around to ensure you get the best deal. Having a business checking account allows for all business income and expenses to debited or credited from that one account. This also forces you to pay yourself first, which means transferring funds from the business account to your personal account to take care of expenses that can not be classified and business expenses.
Keep in mind that your business account should be used for business transactions only. Be sure to keep accurate financial records. If that is not your strong suit higher a certified bookkeeper to handle that aspect of your business. I guarantee your stress levels will diminish come next tax season.
Take a second to read the article below
A Business Is Not Your Personal Piggy Bank
Until we meet again beautiful KINGS and QUEENS.