Separating Business and Personal Finances in Savannah, GA: How to Effectively Do It

Business and personal finances must be separated at all costs. Otherwise, you could face confusion and possible losses. When business and personal money are used interchangeably, determining business expenses will be hard. Any small business accountant in Savannah, GA, will advise against this. So, how can you separate your business and personal accounts:

Establish Separate Accounts

First, you need to have separate accounts for business and personal expenses. Such separation is important so you can keep track of your business income. Also, secure a business credit to handle big business expenses separately. This can prevent you from using your personal credit card for business expenses. 

Ensure Your Receipts and Invoices are Stored Separately

If you like to store receipts in used boxes, ensure there are two boxes you can allocate for your personal and business receipts or invoices. This way, your accountant can easily review the expenses and income of your business during tax season. Having all receipts kept in one box will waste your time and the time of your accountant. 

Set Separate Budgets

After you set up separate accounts for your personal and business finances, it’s time to change the way you spend. Make sure you use business cards only for business-related transactions. If your monthly household budget has been exceeded, do not try to use business cards for purchasing groceries or gifts. Otherwise, this will affect your business accounts. It’s important to set budgets for personal and business needs separately and stick to them. 

Pay Yourself

As a business owner, you also have to release salaries for yourself. This salary amount will have to come from your business account and must be transferred to your personal account. Do the same thing when your business earns profits or when you want to give bonuses. After you get paid, you can set a budget from this. 

Separate Assets

If you must purchase a new computer set for your business, use your business account to pay for it. If you want to buy one set for your home and one for your business, obtain separate bills for each. Similarly, you need to have separate bills for inventories such as electronics and stationery items. Make sure to have separate utility bills for business and personal uses. 

Make Detailed Books of Accounts

These books are meant for your business transactions. These are important for your business expenses and income. This allows you to have a written overview of where your business money is going and what’s coming into your business treasury. 

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