Keeping Personal and Business Finances Separate
The small business insurance Massachusetts entrepreneurs purchase provides financial protection from some of the risks of running a small business. It’s important when you launch your own business to keep personal and business finances separate, because blurring the boundaries between business and personal finances poses a risk of all sorts of complications.
The simplest way of separating business and personal financial affairs is to open a separate business bank account. Ensure that this account is only used for business transactions, and that your personal account is only used for non-business transactions.
Having separate bank records makes it simpler when the time comes to lodge your IRS return or undergo an IRS audit. Separate bank records simplifies your accountant’s work; if your personal and business finances are mingled and messy your accountant will have to spend more time preparing your accounts and may charge higher fees than if your accounts had been tidy and separate.
Keeping a separate bank account for your business affairs reduces the risk of missing tax write-offs, and makes it easy to see where your business stands financially, and knowing how your business is performing helps you to make sound, well-informed business decisions.
Protect your business assets by purchasing small business insurance. Massachusetts entrepreneurs who are careful about keeping business and personal finances separate can save themselves both money and time – and these are important resources that a small business owner needs to conserve.