If we could ask every new client to do just one thing, it would be this: keep your business money and your personal money completely separate. It is the first item on our client checklist for a reason.
Why it matters
- Cleaner books, lower cost. Every mixed transaction needs a question and an answer. Separate accounts remove most of those questions.
- Easier tax time. Deductions are simple to support when every business expense lives in a business account.
- Stronger legal protection. Treating your LLC or corporation as truly separate from you helps preserve the liability protection it is meant to provide.
- Better decisions. You can see what the business earns on its own.
A simple setup
- Open a business checking account in the business's legal name, using your EIN.
- Get a business credit or debit card and use it only for business purchases.
- Route all customer payments (Square, Stripe, Zelle for Business, checks) into the business account.
- Pay yourself on purpose. Move money from business to personal as an owner's draw or payroll, on a regular schedule, rather than spending directly from the business account.
- Save receipts as you go. Snap a photo and drop it in a shared folder within a week of the purchase.
Already mixed things up? That's very common. During a books restoration we sort out personal and business transactions and record the right owner contributions and draws so your records are accurate going forward.
This article is general information, not tax, legal or financial advice. Rules and rates change; confirm the details for your situation with the appropriate agency or a qualified professional.