Separate Business Expenses and Income from Personal
Most small business owners fall into the temptation of using their personal finances to help boost their business needs as well as using business earnings to sponsor their personal activities. In both cases, it may negatively affect the growth of your business in the long run, hence, we should separate business expenses from personal.
It is necessary for business owners to separate business expenses from personal expenses. This will help ensure they treat their business like a separate entity, while safeguarding their personal finances. It will also help them to easily manage their company accounts at the end of the year in order to avoid being penalized by the tax authorities.
Once you separate business expenses from personal, it makes it easier for you to keep track of business expenses for tax purposes. Keeping track of your business’ expense is very essential in filing your taxes properly.
When filing your taxes, the tax administration requires business-only information. That not withstanding, having separate business expenses will help you save a lot of time and stress. It will help you know what you can deduct and what you can’t when preparing your annual accounts for tax purposes.
Having separate business expenses from personal expense will make it easier for you to grow and evaluate the health of your business. It will help you know the difference between personal and business income when preparing your profit and loss statement (income statement).
Before Excel or other bookkeeping applications came into existence, many accountants or business managers used handwritten spreadsheets to track business income and expenses. Now we have spreadsheet applications like Excel which is used to design spreadsheets that automatically does the math for us.
We also have various database applications that do the same thing, though they don’t allow you to see more information at once like spreadsheets. Make sure you recover unpaid invoices before the end of the year.
It’s very necessary for every small business owner to track their income and expenses. This to me is the first step in money management. It will also help you separate business expenses from personal.
Using a spreadsheet like Excel to manage your business’ expense and income will enable you to see quickly and clearly how your expense categories change from time-to-time. It also makes it easy for you to compare and come up with income and expense summaries over time.
Are you looking for a simple way to keep track of your business income? Our partners, FastTrack Excel, have designed Excel worksheets which you can download for free and used to track your business and personal income and expenses.
Today, Excel is fully integrated in almost every business. Mastering how to work with it or know how it functions is recommended and required.
Our Partners at FastTrack Excel have put together a business-centric focus course for Business Professionals. The course will help business professionals or managers to:
You can get in touch with them for registration requirements!
You can get in touch now!
Email: firstname.lastname@example.org | Tel: +237 699 421 947 | WhatsApp | Telegram
This content has been prepared for information purposes only. It is not intended to provide, and should not be relied on for, tax, accounting or legal advice. You need to consult your own tax, accounting or legal advisors before engaging in any transaction.