Do you know how much your company makes per month? Is your business's reserves enough to pay the bills in lean times? If you're unsure about the answers to these questions, you may need to learn how to separate personal and business expenses.
Understand why it is so necessary to make this separation correctly and check out the steps you should follow. Let's go!
Content
The importance of separating personal and business expenses
Here's how to avoid this confusion once and for all
Put your house in order
Define the pro-labore
Have different bank accounts
Secure monthly reservations
The importance of separating personal and business expenses
Many business owners don't know this, but one principle of accounting is the separation of income and expenses for individuals and legal entities. This is quite common, since in micro and small businesses, the owner is usually responsible for all matters related to management.
However, keep in mind that separating personal and business expenses is necessary to have more accurate business data. If you don't do this, you're probably having trouble knowing whether your company is actually making a profit.
By making the proper separation, business management becomes simpler and the chances of success increase. Not to mention that this also helps you organize your personal expenses and ensure that you are not spending more than you earn.
Here's how to avoid this confusion once and for all
Put your house in order
The first step to separating personal and business expenses is to analyze your company's financial reality as well as your own expenses. What does this mean? It's quite simple: calculate how much profit you make from your business and how much you spend per month.
One tip is to create two tables, one with company expenses and another with personal expenses. Absolutely all expenses should be included in these tables. This makes it much easier to have a view of the whole.
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Define the pro-labore
Pro -labore is nothing more than your own salary. Defining it is extremely canada whatsapp number important when separating personal and business expenses. After all, the entrepreneur's profit should not be confused with the company's profit, which is used for investments, working capital and to pay employees.
Your own salary needs to be in line with the amounts paid by other companies for the same position. However, it must also be appropriate to the reality of your business, bearing in mind that it cannot compromise the company's financial situation.
Have different bank accounts
One of the most confusing things for business owners is having a single account for everything. That's why it's essential to have two separate accounts to properly separate personal and business expenses. Otherwise, financial organization becomes very complicated.