JENNIFER HALEY, CPA
Hi there, I'm Jennifer Haley, CPA. I'm here to help business owners get a handle on their finances so they can get back to doing the things they love.
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The only advice you will EVER need when starting or running your business is you MUST open a bank account that is completely designated for business; and separate from your personal account!
I mean if you want to get me going, I’d actually suggest to open at minimum 4 accounts, but I'll get to that on another post, and 1 is a VERY positive start!
I see a lot of people running their business and personal finances through one account, and trust me, it just doesn’t work!
You cannot properly manage your cashflow and the success of your business if you are needing to dodge around grocery, entertainment, medical, and all other personal expenses.
Cashflow is an essential part of our businesses, its honestly the blood line. So when you have business and personal all mixed together you will properly often need to go for transfusions (see what I did there...). When it is together, how do you know when you buy groceries you are taking away from the cash to pay for you business insurance, or when you buy office supplies are you taking away from your mortgage payment?
You will always feel financially overwhelmed and stressed because you will be relying on that brain of yours to keep track of everything happening. I don't know about you but just no thanks!
Canada Revenue Agency
And if the cashflow reasoning wasn't enough, CRA headache should be all you need. If you are selected for an audit and CRA asks for your bank statements (and they will) they are going to make you categorize each expense within your account to state if it is personal or business. And then when there is an expense that crosses over (for instances Home Depot) you bet they are going to ask for the receipt.
How much easier would it be to hand over a statement and say, EVERYTHING is business, done, no more explanation.
You really need to trust me on this one, separate those funds! It will save yourself SO much hair; it won't be falling out from stress and your won't be pulling it out because you are confused and there is so much going on.