If your firm's startup capital was sourced from your personal savings, there's a good chance that you run all your funds through the same bank account. While there's nothing wrong with the first part, the latter could be your first step towards self-destructing. Without a separate business bank account, tactical money management will be impossible to achieve. And this isn't the only reason why you should implement a financial division.
Unless you keep your business and personal accounts separate, you'll likely face a nightmare sifting through your statements during tax season. Chances are that you'll include personal expenses in your company's tax returns, or even fail to spot them altogether. None of these two instances will lead to pleasant outcomes, so why not just split your accounts and keep your sanity?
You already know how important it is to maintain a professional image out there. What you might not be aware of is that merging all your finances under the same umbrella won't help this cause. Having your customers make payments to your personal accounts will make them start doubting your professionalism. For them to start taking you seriously, there has to be a clear boundary between you and your firm.
One of the benefits of structuring your business as a corporation is the shield that this status provides to your personal assets. For this to work, you have to separate them from those owned by your company. Otherwise, any action filed against your company by creditors will expose your wealth to forfeiture.
Whether it's the seasonal working capital injection or a long-term loan, funding from outside sources will be vital to the growth of your company. Keeping finances separate means your business will develop its own credit profile, which will come in handy when you will be dealing with lenders. It will also save you a lot of work when demonstrating your firm's financial records.
Tracking your organization's financial health is part of what you should be doing to maintain progress in the right direction. Without discounting the need for professional bookkeeping, this will be easy to do when business records are kept clean and error-free. On the same vein, your accounting department will also appreciate the effort you've put into splitting your finances.
Even the most profitable venture will come tumbling down if its shareholders use it as their personal cash register. As you've probably guessed, this is more likely to happen when you and your company's lives are financially tangled. In such a case, chances are that you'll use your personal funds to bail out your company or vice versa. Either way, success will be hard to come by.
You already know that blurring the lines between leisure and business is always a bad idea. So why are you still using a casual approach to manage your firms's finances? There's no discounting the convenience of blending them with your own, but the severe consequences you risk facing should make you think otherwise.
Unless you keep your business and personal accounts separate, you'll likely face a nightmare sifting through your statements during tax season. Chances are that you'll include personal expenses in your company's tax returns, or even fail to spot them altogether. None of these two instances will lead to pleasant outcomes, so why not just split your accounts and keep your sanity?
You already know how important it is to maintain a professional image out there. What you might not be aware of is that merging all your finances under the same umbrella won't help this cause. Having your customers make payments to your personal accounts will make them start doubting your professionalism. For them to start taking you seriously, there has to be a clear boundary between you and your firm.
One of the benefits of structuring your business as a corporation is the shield that this status provides to your personal assets. For this to work, you have to separate them from those owned by your company. Otherwise, any action filed against your company by creditors will expose your wealth to forfeiture.
Whether it's the seasonal working capital injection or a long-term loan, funding from outside sources will be vital to the growth of your company. Keeping finances separate means your business will develop its own credit profile, which will come in handy when you will be dealing with lenders. It will also save you a lot of work when demonstrating your firm's financial records.
Tracking your organization's financial health is part of what you should be doing to maintain progress in the right direction. Without discounting the need for professional bookkeeping, this will be easy to do when business records are kept clean and error-free. On the same vein, your accounting department will also appreciate the effort you've put into splitting your finances.
Even the most profitable venture will come tumbling down if its shareholders use it as their personal cash register. As you've probably guessed, this is more likely to happen when you and your company's lives are financially tangled. In such a case, chances are that you'll use your personal funds to bail out your company or vice versa. Either way, success will be hard to come by.
You already know that blurring the lines between leisure and business is always a bad idea. So why are you still using a casual approach to manage your firms's finances? There's no discounting the convenience of blending them with your own, but the severe consequences you risk facing should make you think otherwise.
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