Why You Should Split Your Business Expenses From Your Personal Expenses
One of the most common errors new businesses make is blurring the lines between personal and business expenses. Here’s a few (good) reasons to keep them separate.
September 28, 2021
Getting credit can be difficult if you’re just starting out and many startups will often resort to using personal credit cards to make business purchases. While this might seem like the easier solution, it can lead to many hassles for your finance team down the line, especially in the case of a tax audit. If your company is currently double dipping in corporate and personal credit cards, here’s a list of reasons why you should keep these expenses separate.
Managing your finances will be way easier.
We’re not saving the best for last here. Separating personal and business expenses can mean different things whether you’re an independent business owner, a startup or a large corporation. However, in any scenario, mixing up your personal and business expenses can make managing your finances way more complicated than it needs to be. By keeping these expenses separate, you are taking a major step to simplify spend management in your organization. Your finance team will no longer have to duplicate efforts and sort through various financial statements, adding years back to their life. 😜 When personal credit cards are eliminated from the equation, all company spending is coming from the same pot. This makes it easier to set spend controls, monitor employee and departmental spending and help companies stay on budget.
There’s endless tax-saving benefits.
Is there anything more motivating than extra money in your pocket? 💸 What if we told you that you could save more money each year and reinvest in your business by being more organized with your financials. When you take proper inventory of the money coming in and out of your organization, you’re left with accurate financial reporting to easily write off business expenses and capitalize on tax deductions. If your expense reports are a mish-mash of personal and business expenses, you could face the possibility of losing hard-earned tax savings – and no one wants that. Not to mention, Canada Revenue Agency requires all businesses to keep accurate financial records and stay on top of bookkeeping. Start making life easier by actively separating all things business and personal. Tax season will be a breeze and your finance team will be fully prepared in the case of an audit. You can thank us later. 😎
You’ll have more visibility of money coming and going.
Business credit cards make it possible to simplify the process of tracking and recording company expenses cross-functionally. In doing this, you can have a clear picture of the money coming in and out of your organization, granting better control on spending and the power to make more strategic decisions. It helps companies understand where they need to scale back spending, what areas of the business they can reinvest in, as well as identify any discrepancies or potential instances of fraud. When business finances are organized, up-to-date and properly tracked, companies will have a better grasp on where they are today and where they’re headed.
Float takes these benefits to the next level. ⬆️
It’s clear that creating a boundary between business and personal expenses has its clear benefits. But what if your company has trouble getting a corporate card? Look no further.
Float has taken away ALL of the headaches that come with financial management and created a simple solution. First, we make the process of getting a corporate credit card as fast as an Amazon Prime order. 💳💨 We’re not kidding, our corporate cards are approved in just 1 day and delivered to you within 3. Your employees will no longer have to carry the burden of using their personal credit cards to make work purchases.
Next, Float saves you valuable time with our automated spend management software – doing all of the manual work for you. It’s designed to instantly record transactions, match receipts in real time and provide insight into when and why purchases are being made. Your finance team can also set spend controls and will no longer have to chase employees for receipts as they’ll be notified to upload them every time a purchase is made. Float makes it possible to get all employees aligned with company spending policies and goals by making corporate cards more accessible. So once you’ve separated those business and personal expenses, Float can take the reins to bring greater efficiency to your business and make spend management a piece of cake. 🍰 When it’s all said and done, we’re driven to bring a new level of visibility and control into capital spending so that companies are set up to grow and reach their highest potential.
Connect with us today to learn more about how Float can help you.
All the resources
Accounting Automations for Canadian Finance Teams
Learn how to use accounting automations to save your business time and money.Read More
Float secures C$50 million in financing to accelerate growth
In partnership with Silicon Valley Bank (SVB), a division of First Citizens BankRead More