In order to administer those two items, the money must be kept separate so that it is easy to keep track and so that personal funds are not used in business expenses.
Keep accounts separately
The money from the business and the money spent to maintain the home and the family must be taken separately. This avoids confusion when making tax payments and other legal obligations helps to render accounts for the money that belongs to the business and helps you keep track of how the money is spent. Keeping accounts separately also protects personal resources against debts and business expenses, should this not succeed.
Ways to keep accounts separately
Have a separate bank account for the business. It is easier to control business expenses if they are managed from a single account, and you will have a clearer idea about the income.
Keep the money in a safe place. Ask other business owners what banks they use and what savings plans they have.
Adopt a good accounting system that allows you to keep track of your expenses. Talk to prosperous business owners and ask them about the accounting systems that give them good results.
Pay a salary and consider this as a business expense.
Decide in advance how much of your personal savings you want to invest in the business. Set a fixed limit to help you determine whether or not it is worth investing money in that business. If you dont know much about your business then you should hire few Business Management Consultancy Services for your company.
Do not misuse business funds
As the owner of the business, you may be tempted to consider all of your profits as personal income, but even if you are the one who manages the money, you should not treat it as if it were yours since doing so could carry other risks. For example, if you start to borrow with the business as collateral and then find that you can not pay for them, the company would be at risk, as will the investments that other people make in it. Below are other precautions that should be taken with business funds.
If you have to request a loan for the business, use the money only for the expenses of this one.
Make it clear that if the business throws more money than expected in a period of time, that money should be saved or reinvested. You and the other employees have fixed wages and that should not change until you do a new financial analysis of the business.
Keep your personal resources in order
The advice of the Lord and His servants has always been to put our house and finances in order.
“If you have liquidated your debts and have a reserve, however small, then, although the storms whip around you, you will have a refuge” (“To men and young people”, Gordon B. Hinckley, Liahona, January 1999). , page 66).
If you want to open a business, here are some advantages offered by having personal resources in order.
You already know in advance how to spend with caution and keep a detailed control of income and expenses.
You probably have a solid credit history and have a good reputation because you have managed the money responsibly, which can help you get support for the business.
If you need a loan, you already have a record of your finances. Presenting your finances in order before a bank will help you increase your chances of qualifying for a loan.
It will be easier for you to set aside money from your savings to support your family while you start the business or to generate savings to finance the business.