Separating Personal and Business Finances
As a business owner, you may wonder if it’s really worth it to obtain a business credit card or a separate business bank account when you already have a personal credit card and bank account. The short answer is yes, it’s worth it.
Separating your business finances from your personal finances makes it easier and less time consuming during tax season to identify business activity. It could also save you time if you were to be audited, as there would be a clear and detailed audit trail of all your business transactions.
Keep in mind that when you open separate business and personal accounts you shouldn’t commingle any transactions. It could blur the lines of limited liability for your business.
Many business credit cards offer a variety of perks such as cash back on purchases, free employee cards at no additional cost, bonus points, travel rewards and more. You just have to do your research to figure out which card would best benefit your business.
The bottom line is that separating your business and personal finances helps keep your business organized, accurate, and allows you to have a better understanding of your business financial position.