![]() ![]() ![]() So that forced me to separate my personal and business expenses. When I started my third consulting practice, I decided that I wanted to incorporate as an LLC to protect my personal assets. But it was way too much work to do all of this. And to make it worse, I structured my living expenses separate from discretionary (okay….I’m a little OCD), but it helped me identify where my money was going instead of guessing. Getting an accurate balance sheet was nearly impossible!I won’t bore you with the accounting details, but I tried to structure it so business expenses were at the top and personal ones were at the bottom.This made figuring out my business’s bottom line difficult. When I printed out my Profit & Loss Statement, it was 3 pages long! This was because I had two expenses each for a lot of items (heat, electricity, entertainment, and so on).Yes, it was easy to enter the credit card charges and break it out by business and personal type expenses, but there were serious pitfalls. ![]() In that practice, I didn’t separate personal and business expenses, but I did have two checking accounts (personal and business) and one type of credit card. The first one, funny enough, was specializing in one of the first accounting packages for the Macintosh in the late 80s. I’ve had 3 consulting practices over the past 23 years. So I’ve been asked to give my opinion on why one should keep their personal finances and business finances separate. ![]()
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