Separate business and personal finances
Do you use your personal checking account for your side business? Here are the top reasons to separate business and personal finances
How to separate business and personal finances
If you’re just starting a small business, mixing your business and personal finances might not seem like a big deal. But Manny Cosme believes it’s important to keep your business and personal finances separate, whether you’re running a small Etsy shop or building the next Fortune 500 company.
Learn all about why you should separate your business and personal finances Queer money®:
How to separate business and personal finances:
Manny is President and CEO of CFO Services Group, an accounting firm based in Washington, DC. He has over 20 years of experience in financial management, accounting and administration and works almost exclusively with small businesses to get their finances back in order. Manny served as vice president of finance and administration for the U.S. Hispanic Chamber of Commerce for five years before founding CFO Services Group in 2012.
In this episode of Queer money®, Manny joins us to explain why it’s important to separate our business and personal finances and discuss the legal, tax and administrative implications of combining our money. He explains the differences between a sole proprietorship, an LLC, and a corporation and encourages us to open a separate bank account for our business, regardless of its structure. Listen to Manny’s insights into the benefits of having an EIN (regardless of whether it’s required or not) and learn the easiest way to start separating your business and personal finances – today!
Topics covered on why you should separate business and personal finances
Why we should separate our business and personal finances
Legal and tax reasons
Better management decisions
The easiest way to separate our business and personal funds
Open a separate bank account for business purposes
Carry separate personal and business debit/credit cards
When to start separating our business and personal finances
Minute set the intention to make money
Important for IRS guidelines
The most common mistakes entrepreneurs make when separating funds
Balancing business and personal finances in the early stages
Pay a business credit card from a personal account (or vice versa)
Buy supplies with money from your personal account
The adverse effects of mixing business and personal funds
- No legal separation between you and your company (personal assets at risk)
- It becomes more difficult to complete the paperwork for taxes and you miss out on deductions
- I don’t know how much money flows in and out of the business
The Benefits of an Employee Identification Number (EIN)
- Acts as a type of social security number for companies
- Protects the confidentiality of the entrepreneur
The different types of corporate structures
- Sole proprietorship or partnership
- LLC
- Company
What information does the bank need when we set up a business account?
- Social Security Number for sole proprietorships only
- EIN, Certificate of Formation and Operating Agreement for LLC
- EIN, Articles of Association and Bylaws of a Corporation
The Benefits of Joining a Local LGBTQ Chamber of Commerce
- The camaraderie with other business owners
- Opportunity to give back to the community
business.+-+Manny+Cosme+of+%40CFOServicesGrou&via=driftkingsmedia&url=https://driftkingsmedia.com/business-and-personal-finances/” data-link=”https://twitter.com/share?text=The+minute+that+you+do+anything+with+the+intention+of+making+money+from+it%2C+you+have+created+a+business.+-+Manny+Cosme+of+%40CFOServicesGrou&via=driftkingsmedia&url=https://driftkingsmedia.com/business-and-personal-finances/” target=”_blank”>The moment you do something to make money from it, you have started a business. – Manny Cosme from CFO Services GroupClick to tweet