One of the main mistakes made in management is not knowing how to separate personal expenses from company accounts. Many partners are in the habit of making cash withdrawals to pay for items that are not related to the venture. However, this affects cash flow and hinders the assessment of business profits, in addition to causing problems for accounting . Over time, this can cause serious damage, as it prevents the manager from correctly assessing the results and profits obtained.
Therefore, it is essential to understand how to separate personal expenses from company accounts and put these strategies into practice. Want to know how to do this? Then continue reading this post!
Make a financial diagnosis
If you’re having trouble separating personal accounts from company expenses, the first step is to make a complete financial diagnosis to identify the real profit of the business.
Review all payments received and which accounts were paid, both personal and business. This information is important to verify the total invested in expenses that are not related to the business and to understand the impacts that this brings to management .
To help with this control, you can rely on financial spreadsheets or, if possible, management software . Automation systems are important tools to facilitate administration, as they integrate information and generate detailed financial reports.
Thus, it is easier to carry out a recurring financial diagnosis, so that you can carry out adequate planning and determine the business budget, with the forecast of goals and objectives for the business.
Have separate bank accounts
When opening a company, even if it is individual, have specific bank accounts for the legal entity and use them according to their purpose. Think of additional fee costs as an investment.
Even with good control over all credits and debits, it is common for confusion to occur when identifying certain financial transactions .
Unidentified deposits and withdrawals, for example, require time to identify the origin and define whether they refer to the company or the partner.
This increases the chances of errors.in budget control, it generates headaches and, many times, rework. In addition, when using only one account, it is more difficult to visualize the amounts available for the individual and for the enterprise. This is a strategy that facilitates business management, but also collaborates with personal financial planning.
Define your withdrawals in the company
One of the main reasons why personal and company expenses are mixed is the lack of definition about the withdrawal of amounts by the partners. As a consequence, they are made when it is necessary to pay a bill, without real control over it.
Therefore, it is essential that all partners define the pro-labore , which is the entrepreneur’s salary. Many agree on this value thinking only about their personal expenses, however, it is necessary that the withdrawal be compatible with the reality of the business and the growth plans, in addition to the functions performed in the administration .
Another way to receive values from the company is by anticipating profits. This can be done on a monthly or semi-annual basis, but requires planning to see how much should be reinvested in the business and the amount that will be withdrawn.
Do not bring personal accounts to the company
It is common to have bills to pay, take slips and payment data to work, and ask the employee responsible for the financial sector to make these payments. Even if you don’t use company money, remember that labor is also a business resource.
Employees must carry out activities that generate advantages for the company, according to the contracted function . When they have to travel to fulfill personal errands for employers, this incurs business costs.
Therefore, look for alternatives to facilitate personal payments, such as bank applications. The rule should also be applied in relation to company accounts: do not take it home, nor pay with values from your personal account.
Always have financial reserves
The market suffers from constant variations and this affects the income of the enterprise. So, it is important to have a financial reserve to deal with unforeseen events and avoid resorting to bank loans or financing, which offer high interest rates.
However, in personal life emergencies can also arise. So, in order not to run the risk of mixing personal expenses with those of the company, have your own financial reserve.
By doing this, you won’t need to apply your own money to solve business problems or vice versa . To get more benefits, invest the money. In the case of financial reserves, it is worth choosing options that offer daily liquidity, so that the reserve offers income and allows you to make financial transactions at any time.
Enlist the help of an accountant
To help you have good financial control, a great option is to hire an accounting firm. The accountant will make a complete diagnosis to check what personal expenses are and the company’s situation.
Thus, it is possible to define a pro-labore adequate to the reality of the business and implement other important strategies for the success of the enterprise. The professional assists in the preparation of the balance sheet, tax planning , profit distribution and other important tasks for business management.
An accountant helps reduce recurring expenses such as payroll and taxes. In addition, it offers advice for you to fulfill all obligations, which avoids the application of penalties and lawsuits.. This provides more security in relation to the company’s budget and becomes an essential tool for anyone who wants to maintain good financial control.
To ensure quality consulting, look for a trusted firm that has experience in the area and monitors market trends, such as the use of technology and legislative changes.
Now that you already know our tips on how to separate personal expenses from company accounts, just put them into practice to ensure good financial management of your business.