Separate Your Personal and Business Finances

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2010 is almost here. How can you improve your business operations? One simple yet incredibly important financial step you can take is to separate your personal and business bank accounts. No more comingling of accounts, no more gray area, no more personal checks for business expenses.

Photo by mamaroots

Back in 2006, around tax time, I remember it taking me three days’ worth of effort to separate my Quicken report into personal and business expenses. Opening a second bank account is pretty easy and, even better, free. Okay, so you have to buy checks. But the time it will take you to separate data “after the fact” is ugly. Think of it as time that you could be using to sell or make your services or products.

When Your Business is More than Just a Hobby

When you’re first starting out, it makes no sense to go overboard with new accounts or a dedicated credit card. It’s just a hobby, right? Wrong! Sales will start rolling in, and before you know it you’ll have orders to fill and more raw materials to purchase. Suddenly, you need a website, an accountant, business cards and more supplies –- you even buy ad space on a few key websites. Do yourself a favor and open a bank account specifically for your business expenses.

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