Why you should separate personal and business money

When personal and business money mix, you cannot tell whether the business is profitable, and tax time becomes a reconstruction exercise.

1. Open a separate account if you can

It is the cleanest solution. Every transaction in that account is business by definition.

2. If you cannot, tag religiously

Mark every business payment with the same tag when it happens, not in a clean-up months later.

3. Pay yourself explicitly

Move a set amount from business to personal as your income, rather than dipping in ad hoc.

4. Do not pay personal bills from business funds

Occasional mistakes happen. Record them as a transfer to yourself so the books stay honest.

5. Check the split monthly

A quick look at how much went where keeps the habit intact.