Why keep your personal and business expenses separate?
Mixing your business and personal spending costs you visibility, tax efficiency and sometimes a lot more. Here's how to draw the line cleanly.
When the same card pays for stock, payroll, school fees and Friday-night takeaway, the numbers in your accounting software stop telling you anything useful. Cash flow looks wrong, GST is harder to reconcile, and tax-deductible expenses get buried.
A second account doesn't have to be complicated. Open a transaction account specifically for the business, run all income and expenses through it, and pay yourself a wage or owner draw on a regular schedule. Suddenly every dollar in the business account is one of three things: revenue, an expense, or your pay.
If you're already mixed up, don't panic - we untangle this kind of thing every week. The fix is usually a one-off cleanup plus a simple rule for the next 12 months.
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