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Keeping Your Finances Separate

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One of the most common mistakes new business owners make is mixing their personal and business finances. If you want to have a better grasp on your finances, then it is vital that you keep these two things separate from each other.

For instance, that new backpack you bought for your kids simply cannot be a considered a business expense, yet you used your company credit card because you had it with you that day. While you can pay it back, it could really jumble things up down the road, especially when it turns into a habit.

It needs to be stated here that all business transactions have to be accounted for. However, if you are going to use your business’ resources for personal expenses, then you can probably see how that can complicate things. You probably would not want that.

That being said, you will need to separate your business and personal accounts. This applies both to your bank accounts and credit cards. While this may seem strict, it is you who will benefit from it in the end by saving yourself several hours of accounting work separating one expense type from another.

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