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By Heritage Bank on April 14, 2023
2 minute read

Best Practices for Keeping Business and Personal Expenses Separate

Advice for small business people just starting out 


Whether it’s a start-up, a small farming operation or a side gig, you’re never too new to business or running too small of a business to keep business and personal expenses separate. Just ask the small business leaders you hope to be one day. Separating business and personal funds makes it simpler to comply with tax regulations, follow standard accounting processes accurately monitor business expenses.


1. Set Up a Business Bank Account


The first step to separating expenses is to open a checking account dedicated solely to business transactions. 


Doing so helps you easily distinguish between commercial and private expenditures and improve cash flow tracking. It also makes financial management more efficient by allowing you to monitor account activities on the go.


Need help opening a business bank account? 

At Heritage Bank, we support local entrepreneurs with competitive financial products and services that drive your business forward. 


From business checking and saving accounts to financing options to cash management services designed for small businesses and mobile banking, we make it easy to monitor and track your business spending while keeping it separate from personal transactions. You can also request a business debit card for easy payments tracked directly to your business deposits.


2. Organize Your Business Expenses 


To provide an accurate view of your company’s financial health, establish a system for tracking business expenses, organizing them into categories. 


This includes, but is not limited to, the following:


  • Meals
  • Gas and Fuel
  • Memberships/Subscriptions
  • Software/Technology
  • Communication
  • Equipment
  • Income


You may already utilize QuickBooks® or another financial management software to document your business's receipts, invoices and records. If so, great work! Having a comprehensive record-keeping system and routinely filing away documents into proper categories will help you separate expenses quickly and efficiently. 


However, to be successful, you must perform this essential task diligently to ensure you include all business write-offs and remember to track incoming payments. 


How we can help!

At Heritage Bank, our online banking options like Direct Connect make it easy to perform all your online banking tasks directly within QuickBooks®. This way, you don't need to track activity in two different places, which saves time and keeps your records accurate. 


3. Apply for a Business Credit Card


Utilizing a dedicated business credit card is an excellent way to ensure that all company expenses are tracked carefully. Using a personal card for business expenses can make it difficult and time-consuming to separate and file your expenses to meet quarterly tax deadlines.


Additionally, using a separate card may bring some reward benefits from certain financial institutions.


Heritage Bank, for example, offers competitive credit card options for small business owners. In addition, thanks to our partnership with MasterCard®, you can enjoy more convenience, flexibility, and benefits each time you use your business credit card.


4. Stay Informed on Business Tax Deductions 


Many small business owners qualify for attractive business tax deductions. Separate banking accounts, credit cards and other business banking tools can ensure you are organized and positioned to deduct travel, meals, business supplies and other expenses related to your business.


5. Choose A Small Business Banking Specialist


Heritage Bank specializes in small business banking, serving start-ups and people with side gigs as well as local mid-sized businesses with customers around the world. We provide products and services designed for small businesses rather than retrofitting products and services designed for large corporations. We back our products with experienced bankers who provide everyday above and beyond service.


If you'd like to open a business checking account or talk to us about lending options, please visit a branch location near you during regular business hours, or contact us by phone. 


DISCLAIMER: This blog is intended for general information purposes only and is not intended as professional tax advice or guidance. Therefore, be sure to consult with an experienced CPA for any business or personal tax information, advice, or tax filing.

Published by Heritage Bank April 14, 2023