One Bank Account for Everything — What It Really Costs You
Running a business out of personal checking costs time, deductions and entity protection. The fix is one business account and one business card.
Jump to a section
Full transcript
Is mixing accounts illegal?
Running your business out of your personal checking isn't illegal. It's just expensive. And here's the bill.
What does it cost in time?
The first cost is time. When business and personal spending share one account, every transaction requires a human judgment call. Your accounting team has to stop and decide what belongs to the business and what does not. So routine bookkeeping becomes a longer investigation.
What about missed deductions?
The second cost is missed deduction. If nobody can tell whether an Amazon order was for a job or for home, a legitimate business purchase can be overlooked.
What does it do to your entity protection?
The third issue is entity protection. If your business is an LLC or S-Corp, mixing personal and business money can weaken the separation you created the entity to provide.
What is the fix?
The fix is simple. Use one business checking account, one business card, and pay yourself by transfer. That gives the business activity a clean place to live and makes each month's bookkeeping easier to follow.
Can mixed-up books be fixed?
If your transactions are already mixed, you are not the only owner dealing with it, and the problem can still be untangled without judgment. If you've already got a year of it mixed together, that's untanglable. It's most of what I do.
Need help getting your books cleaned up? Call (310) 800-4494 or send us a note.