One of the biggest headache entrepreneurs always struggle with is how to separate personal finances from the business finance. These two almost always cross paths and its really a dangerous combination that can undermine any business. Personally, this has been a long-standing challenge in which strong discipline is needed for me to have significant wins, but the battle is far from over. I believe others too have this struggle. So how do you make and keep separate records for your personal expenses and business spendings? Maybe these 3 practical tips can be of assistance.
1. Run a business account: For some years, I had one purse. So all the money both personal and business went to the same bank account. So if i need airtime or want to buy a new watch, I spend from there. If I also need to make business expenses, I dip hands into the same pocket. How wrong I was. So if you are an entrepreneur and you still run your business from your personal savings account, you are wrong. You need a business account so that it will be easy to keep track of business spendings. Running spendings for business and personal needs from the same account will stagnate your business and prevent you from keeping records properly. Additionally, you will find it hard to know if you have started spending from business capital, and this is the biggest risk. So separating the 2 accounts is the first step towards solving the problem. But there is more!