29 Jan, 2023
FOUR REASONS WHY YOU SHOULD NOT MIX PERSONAL AND BUSINESS FUNDS
As a business owner, you should avoid mixing personal and business funds for the following four reasons:
1. MAKING BUSINESS DECISIONS
You can easily make business decisions when you don’t mix business funds with personal. You know your cash flow, and this helps to make business decisions as to whether the business is profitable or not.
2. TAX PURPOSES
You run the risk of losing legitimate tax deductions if you Mix personal funds with business. The tax man sees personal funds as business funds.
3. BETTER BUSINESS STRUCTURE
Separating personal funds from business helps build a better business structure, your business is distinct from yours. Mixing personal and business funds should be avoided if you are serious about your business. Giving clients personal accounts for a business transaction does not posit your business as properly structured as prospective clients may be wary to do business.
4. PROPER ACCOUNT KEEPING
You can keep a proper account by separating your business funds from personal, it also shows that your business is professional.
Register your business, get a corporate account in the name of your business or a separate account solely for business funds. It positions your business as a structured entity.
By Fathenso Professional Services
The information in this blog is provided for general information purposes only