One common mistake entrepreneurs make, especially in the early stages, is not separating their business and personal finances. Too often, business rookies will use their own debit and credit cards for work expenses. As usual, this quick and easy option is not the smartest or most efficient of managing your business finances. Without separate accounts, it is much more difficult to track important metrics like revenue, expenses, and cash flow. In addition, having a combined account makes tax preparation more tedious and frightening than it already is. Using your own card may seem easy today, but next spring you are going to be frantically crawlingly through months old bank statements – desperately trying to remember if that $30 at Starbucks was really a valid business expense.
It is recommended that all entrepreneurs create separate accounts for their businesses. If you’re not sure how to do this you can enlist the help of financial professionals like these accountants in yeovil, who can help you with all aspects of business finance. It’s always a good idea for businesses to use accountants as they make sure that all the legal boxes are ticked. Not only does separating your bank accounts validate your new enterprise, it will make life much easier. This separation gives real credibility to the business, especially if you are thinking about incorporating in the future. It is simple too. With one trip to the bank you can create a new account for your business. In addition, software applications that aggregate and organize your finances work great with this separate account system.
That being said, managing your personal finances can look very different depending on your occupation. For example, in some sectors, such as the military, pay can be considerably inconsistent and therefore it is vital that you take steps to ensure you can make ends meet. For some people, this involves taking out a loan. However, loans are not always simple and can have expensive consequences when people are unable to pay them back. If you currently work in the military or are a veteran, you might have considered taking out a 401(k) loan. Before doing so, it is essential that you do as much research as possible. If you are not sure where to begin, smartmoneystar.com have compiled a useful guide to 401(k) loans. You can check it out on their website.
Handlr is an especially great resource to use. Not only does transactions get entered straight into your business account, but simply access and see valuable, accurate, financial statements when you need them. Altogether, the liberation of your business finances will make your life less complicated and your business more credible and efficient. So if you’re still using a combined account, declare your independence, automate your business with Handlr, and hold on tight for growth.