Your Business Bank Account Is Not Your Personal Checking Account

JMJ Financial Reality Check

Sometimes the simplest things can create the biggest headaches.

I see personal expenses coming through business accounts more often than you might think, especially with owners of S Corporations.

“But it’s my company.”

And I understand the thinking:

It’s my company. I own it. The money is sitting in my business account. Why can’t I use it to pay for something personal?

You can take money out of your business. The important part is making sure it’s handled correctly in your books.

Where the problems start

Problems begin when personal purchases start getting mixed in with everyday business expenses.

Before long, it becomes harder to see what the business is actually spending, what it’s earning, and how it’s really doing.

And eventually somebody has to sort it all out — usually your bookkeeper, your CPA, or both.

The cleaner the separation, the clearer the numbers.

That really is the point.

Keeping business and personal activity separate gives you cleaner books, more meaningful financial reports, and a much clearer picture of what is actually happening in your business.

And if you’re ever unsure?

Ask before you swipe the business card.

It’s a whole lot easier to handle something correctly today than to figure out six months from now what that charge was.

JMJ Financial Reality Check
Practical financial guidance from Jacqueline M. Johns, MBA, Principal of JMJ Elite Bookkeeping.