You can separate personal expenses from those of your business.

It is possible that when starting a new business, individual or family, Personal money can be mixed with that of the professional activity. However, this small oversight can make unbalance the accounts so much banking both personal and professional.

Therefore, it is important to keep business accounts individually, i.e. separate from personal accounts, to avoid possible risks In business.

5 keys to separating personal and professional expenses

From the Argentinian newspaper Buglethey launched 5 keys to be able to separate personal expenses from those of the company:

1. Separate bank accounts

The first key to avoiding mixing personal and business expenses is to have separate bank accounts for each use. As detailed, although it can be assumed higher maintenance cost of both accounts, it also brings a great advantage: have the most organized accounts.

2. Record of income and expenses

They also recommend keeping a record of income and expenses so you can make a business account balance and know the current status.

A man holds a credit card.

Generally, in the personal bank accountsalary is collected and household expenses are paid, while in the business bank accountmoney is received from sales and services to customers, goods and supplies are paid to suppliers.

3. Define and assign a salary

Defining and assigning a salary is a key point in ordering the accounts of a company and defining how much the workers and the contractor will receive each month. It’s not about the gain of having a business, but about the pay for personal work.

And this is it, the the employer also participates in the cost of the activityit must therefore be calculated when defining the prices of the products or services offered.

4. Define the cost of using own assets

In the same way that the employer’s salary is part of income in personal accounts and as an expense in business accounts, the use of other personal assets such as premises or vehicles must also be taken into account.

5. Assign a Shared Services Usage Percentage

Likewise, in a position similar to the previous one, a percentage must also be attributed to the use of shared services, such as the gas, electricity, water or internet.

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