Growing Your Business – Why Separating Business and Personal Finances is Good

This article is not all about finances. Well, it’s partially about finances. More importantly, it’s about how to grow your business. Growing your business doesn’t just happen by magic. There’s no business growth fairy that takes away a balance sheet and leaves a bigger business under your pillow. It takes consistent, carefully investment to create your own success.And that investment starts with something that you might not have considered: Separating your business and personal finances. Surprised? Here are the reasons.First, you’ll want to separate your business and personal finances for tax purposes. If you keep them combined, you might not be eligible for certain deductions, but if you separate them, you may be entitled to deduct expenses for your home office and mileage allowance. Likewise, you may be responsible for paying certain taxes on your business that do not apply to your personal income. Separating your finances is the only way to ensure that you properly follow all tax laws and receive all advantages to which you are entitled by law. That can grow your business by clarifying your paperwork and possibly making more money available (because of more deductions) which you can reinvest in your business.Another important reason for separating your finances is to get a loan or a grant so you can invest in your business. Separating your finances helps to establish a paper trail and helps you to create financial reports that demonstrate the business’ performance. If your finances are separated it will be much easier to determine which income and expenses belong to the business itself.Third, separating your finances can help you decide how best to grow and develop the business as well. You will be able to see the areas in which the business excels as well as those areas in which it needs some extra help. You can generate targeted, accurate reports and financial statements that show at a glance how the business performs in various areas.

How Can I Separate My Business and Personal Finances?
The easiest way to separate your business and personal finances is to open a business bank account. If you use credit to make business-related purchases, apply for a card in the name of the business. Have all payments made to the business account, and use only those funds and the business credit card to make purchases.How Do I Get Paid?
You have multiple options for paying yourself. Some business owners find it best to write themselves a set paycheck every week. If you are confident that the business will retain enough funds to pay your salary each time, this will streamline the process and make it easier to accurately pay your personal income taxes.However, if your business is new or unstable, you may find it better to pass funds through the business account to your personal account. You might decide to retain just enough money in the business account to pay for expenses, and transfer everything that is left into your personal account. This is an ideal solution for those who have many personal expenses but few business expenses and earn wildly different sums on each contract.

Setting Up and Maintaining Bookkeeping and Accounting
Many business owners find themselves confused and overwhelmed by the paperwork that is involved in maintaining separate accounts. Consider hiring outside help. A Virtual Assistant company can set up and maintain your bookkeeping and accounting. Your VA can even handle payroll, writing your paycheck each week. You can maintain as much or as little control over the process as you desire. You can hire the VA for a set number of hours per week or per month, or simply retain his or her services on a per-project basis.Ultimately, separating your business and personal finances can seem like a complicated task in the short term but in the long term it is an effective way to grow your business.

Personal Finance Software Helps Save Money

Managing your money can take up a lot of your time and also require you to do repetitive and tedious tasks. With a great personal finance software you will save a lot of time and the need for doing tedious repetitive tasks will be highly reduced. You can then concentrate on actually managing the money so that you improve the returns and also your financial security.A personal finance software is a great tool for managing your finances. It will enable you to keep a track of many different accounts such as bank accounts and credit card accounts. It will also enable you to know costs, taxes and even analyze the financial information. In short it will do the work of a finance manager for you. This is a popular approach and in fact is based on the approach of large companies which need to manage complex investment portfolios of large amounts of money.The tools that are offered by a quality personal finance software make tedious and repetitive calculations easy and you will be able to manage your accounts with minimal effort. This by itself will save you a lot of time and effort. A good software will be intuitive and easy to get started with. Therefore you will be able to see the benefits of using the software from day one. And as you get familiar with it you will realize how powerful it is and how much more you can get done.In fact you will be able to automate some tasks that are a part of your money management strategy. It will get stock quotes, help you to reconcile bank accounts and also your credit card accounts. You will be able to manage diverse aspects of your investment portfolio such as bonds, mutual funds and stocks from the same platform.A quality personal finance software will make it convenient and easy to manage your finances. You will then be able to make better investments and increase the value of your portfolio. You can look for free personal finance software online and get first hand knowledge of how good it can get with a quality personal finance software.