Should they be kept completely separate? In my finance software I keep track of my business account as well as all others. The problem I se is I don't actually have a business account, its just a cash account at this time so if I buy something I deduct it from the business account as well as my personal checking account. I do this so it reflects on the checking account as that is where the money is actually coming from and I want it to show on the business account as well because I want to know how much I am making and or loosing from the business. One problem that comes up is if I spend $10 in gas it tallies it as $20 in my financial reports because it shows $10 from each account. Any advice? Should I completely separate them or should I be fine keeping them together at this stage?
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There is only one real purpose for my business account and that is so that I am able to cash checks that people write to the business name instead of my name.
Of course it does also help separate my money (lol, what?) from the business money but I track business expenses on all accounts, even the petty cash account. -
I am wandering if considering the situation it would not be best to STOP using money from my personal account for business. I am in the black as far as business goes and all my equipment is brand new so I don't foresee anymore large expenses. Maybe using the mindset if I cant afford it I cant have it would be the best way to go at this point.Comment
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They should be kept separate in my experience, in the event of an audit things will go much faster and easier. I charge tax and tax reporting is much cleaner if it's kept separate, also should I decide to sell the company at some point, a purchaser can have full access to the books without looking at my personal finances.
I own three companies, two are sole proprietor and one is incorporated, I like keeping everything clean and neat.Andy
Halifax, Nova ScotiaComment
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Once you get yourself started with keeping things separate it's easy and it makes everything better.
You will be able to more clearly look at your business income and expenses to see how healthy your business is. It won't be cluttered with other personal income or expenses that could hide problems.- Subscribe to my Lawn Care Marketing Blog Feed and get daily tips sent to you. Free!
Download your Free trial of Gopher Lawn Care Software.Comment
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As the others have said it's always better to separate everything but I've noticed that since I've started my business accounts I've not used my personal accounts at all.Comment
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separate accounts
I'm set up as a LLC and have a separate checking account for my business.
Never mix your personal accounts with business.
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accounts
Money...Its a gas..
My wife has her account and I have mine and I have a business account for my business everything comes out of that which is used for the business. gas,mowers,repairs,purchases,etc... Every receipt goes into a file system, everything is updated monthly. I know my profits and I know my costs. However, I set aside x amout per week. So, if I set aside 300 a week thats 1200 a month then i figure it all out from there. Mower blades, trim line, fuel, truck expense,maintenance cost's wheels...etc. Right now I have in my fund 9 wheels just in case I need that money for wheels. If my truck gets a flat tire i have enough money to buy 4 brand new ones if I wanted. It's nuts..How far do you take this? nothing is ever easy. Profit wise thats just set aside in a little safe hiding spot in my pillowcase......I need an accountant but, then I am like there is more money i have to spend..everybody makes money off of the guy working...its just not right
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What I do, is go to my bank, use my business debit card, tell the teller i want to transfer money to my personal account. I keep my receipt for my books.
When it's time to enter that into the books, my accountant suggested me to go in the General Journal (could be different from accounting software) but that's where I go, then I put a credit of $0.00 from business account and I debit the Owners withdrawls account $0.00
Hope this helps
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Careful on that one bud, CCRA considers that a shareholders loan and if not repaid within the year it's a taxable benefit.......set yourself up as a supplier, subit an invoice for your time, issue yourself a cheque, at the end of the year it's a wash if you are sole.What I do, is go to my bank, use my business debit card, tell the teller i want to transfer money to my personal account. I keep my receipt for my books.
When it's time to enter that into the books, my accountant suggested me to go in the General Journal (could be different from accounting software) but that's where I go, then I put a credit of $0.00 from business account and I debit the Owners withdrawls account $0.00
Hope this helpsAndy
Halifax, Nova ScotiaComment
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Hmmmm now I am more confused lol.What I do, is go to my bank, use my business debit card, tell the teller i want to transfer money to my personal account. I keep my receipt for my books.
When it's time to enter that into the books, my accountant suggested me to go in the General Journal (could be different from accounting software) but that's where I go, then I put a credit of $0.00 from business account and I debit the Owners withdrawls account $0.00
Hope this helpsComment
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Definition:
Owner's Draw, usually just "Draw" is the amount taken out by the owner of a sole proprietorship or partnership for his or her personal use. A self-employed business owner does not usually take a salary. Instead, he or she makes an initial investment (capital contribution) in the business from personal funds and during the course of the business takes money out as draw and invests more money, from profits or from personal savings.
Owner's draw decreases the owner's capital account. Typically, a check is written on the business account to the owner and it is deposited in the owner's personal account.
Be sure to keep business and personal spending separate. The owner's draw should be the only place where personal and business intersect.Comment
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