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The Significance Of Keeping Your Business And Personal Finances Separate

Author : Helen Milson

People who run businesses entwine business and private finances more often than not. All things considered, you're your business, but muddling up the two could mean chaos at year end and if you are submitting VAT etc

If you are just starting out, it's vital to split up these two aspects of your money life. Treat your organization, big or even small, just like a viable entity.

This is how you can separate your small business away from your personal finances.

Keep independent bank accounts

Not only is getting a couple of accounts tax smart, it will also improve your company.

By the end of the year, all of your income and expenses is going to be in a single location, making record keeping and tax filing simpler. Maintaining very good records year long provides you with proof of your small business expenses if you do get audited and when you provide your accountant with your company documentation it'll make your year end accounts simpler to process.

Make use of a business credit card

Lending prerequisites are quite strict for small businesses. Nevertheless, try to obtain a business visa or mastercard. Like the separate bank account, a credit card should help your record keeping and provide you with something to demonstrate to the HMRC if you are audited. A company credit card can also help with cash flow.

Consider setting up a limited liability company

Sit down with your team of advisors, accountants, solicitors and determine what selection would make the most sense, how this company will impact on your taxes and financial strategy and what insurance protection you should think about.

These company decisions will in addition give your own personal finances a whole new amount of liability protection, which could come in very useful if your company is ever sued or runs into financial difficulties.

Possessing a bank account, credit card and accounting software reserved solely for business use will give you most of what you need to submit your tax returns and to show to the HMRC that your business really is a business.

Author's Resource Box

Helen is a business owner who has had phenomenal success in her field and now devotes her time to helping other business owners.

She provides a wealth of knowledge via free guides and information to help make the sometimes complex processes of running a business easy. With her particular speciality in all matters accounting.

She has written a great guide to finding accountants Leicester

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Tags:   accountants leicester, accountants in leicester, leicester accountants

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Submitted : 2010-12-14    Word Count : 431    Times Viewed: 669