Keeping your business and personal finances separately is extremely important if you don’t want to wreak havoc on your budgets. Unfortunately, it’s really easy for your personal and business finances to get tangled if you don’t take measures to keep them separately.
Keeping these two separately is the best way to ensure that you can deduce what you can deduct and what you can’t at tax time at the end of the month or year. Here’s how to efficiently ensure that your business and personal finances don’t get mixed up:
Work on budgets. Separately!
Generally, no matter if you’re handling business or personal money, the smartest way to manage money is to work on budgets. As a business owner, you need to work on two different budgets: your business’s budget and your personal one.
Having a budget in place helps you stay organized with how much you spend and on what. So, having two separate budgets for your business and personal finances helps you make sure that you don’t exceed any of the budgets forcing you to interfere with your personal business money or the other way around.
Use accounting services for your business
Asking for help from a Regnskapskontor Oslo is the best way to make sure that your business money doesn’t interfere with your personal finances. Using Enkel regnskapsføring services will ensure that a professional accountant will manage your business’s budget, income, and payments, and you can only focus on your personal finances.
Look for Regnskapstjenester Oslo and allow a professional to handle your business money correctly.
Differentiate business from personal expenses
One of the most common mistakes many entrepreneurs make is that they sometimes don’t differentiate between business and personal expenses. This makes the use of business money for personal expenses and the other way around. And that’s precisely how your two budgets get tangled up.
So, make sure that you pay with business money for business expenses, and for personal payments, you use your personal funds.
Set up separate accounts
If you’re using bank accounts to keep your money safely, make sure you have two different accounts for business and personal funds. This will ensure that you don’t withdraw or deposit money from the wrong budget. So, when you go to the bank, make sure you ask for a personal and a business account.
Keep receipts separately
Both as a business owner and as a regular individual, you have to pay for stuff from taxes to living expenses and many other payments. Yet, business and personal costs have different purposes, and they can be handled differently. More precisely, some business payments can be deducted at the end of the year., while personal expenses can’t.
Keeping the receipts separately helps you be prepared for the tax auditor, who will only be interested in your business receipts.
Pay yourself a salary
If you pay yourself a salary, you ensure that you stay on budget with both your business and personal finances. It will help you avoid taking business money for individual payments.