Separate your business and personal expenses (get a business bank account!)

Ask any bookkeeper or accountant what the most important first step is in setting up their business finances and books is, 9 times out of 10 (maybe even 10/10) they will tell you to set up a separate bank account just for your business.

Why is this so important?

Well there are three reasons really.

1. For an LLC or Corporation, this keeps your barrier from liability intact.

These business entities set you up for certain protections in the case of your business being sued. Whether or not you maintain that invisible barrier is up to you.

Treating your business like a personal piggy bank is called piercing the veil and it is more than enough reason for you to lose your protection from liability.

2. You aren't perfect; expenses are bound to fall through the cracks.

Sure, you could comb through each personal bank statement five times just to make sure you didn't miss anything, but who's got time for that?

Doing your books this way is a faulty system. There will be breakdowns in the system. Expenses that could be used as tax deductions will be missed.