The first discipline.
WHY IT MATTERS
Mixed finances make the business impossible to understand and create tax and legal problems.
WHAT MIXING PRODUCES
Accounts that cannot be reconciled Tax treatment that is disputed Difficulty proving what the business earned Problems during due diligence or borrowing Exposure in disputes, where a company exists
WHAT TO ESTABLISH
Separate bank accounts, always.
WHAT ELSE TO SEPARATE
Cards Records Receipts
WHAT TO DO ABOUT SHARED COSTS
Decide a method, apply it consistently, and document it.
WHAT EXAMPLES LOOK LIKE
A vehicle used for both A phone Working from home
WHAT TO PAY YOURSELF
A defined amount, on a schedule, like any other cost.
WHY A SCHEDULE
It makes the business's actual position visible.
WHAT TO AVOID
Taking money when it is available Paying personal costs from business accounts Lending between the two without recording it
WHAT A DIRECTOR'S LOAN IS
Money owed between you and a company, in either direction.
WHAT IT REQUIRES
Recording, and attention to the tax treatment.
WHY
Undocumented withdrawals are treated adversely.
WHAT TO DO IF YOU HAVE BEEN MIXING
Separate now, and reconstruct what you can.
WHAT TO ARRANGE
An accountant, to establish the correct treatment.
WHAT TO MAINTAIN
The discipline, from the first day.
