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After recognition that you have started a business, the second business tip I would share with a new entrepreneur is to “Separate your business and personal funds.”
When businesses start, many people begin depositing business income into their personal checking account. Further, they often start paying business expenses and personal expenses all from the same account.
This causes many problems. First, it becomes a nightmare for your tax accountant at year end. Secondly, when cash flow runs tight, it’s difficult to determine if the problem is a business problem or a personal spending issue.
Proverbs 13:16 says, “All who are prudent act with knowledge, but fools expose their folly.”
When you start a business, it’s prudent to establish a separate account to keep track of only business income and business expense.
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