Business General Financial Information

Separating personal and business expenses

There are some things in life that go together well and others that definitely do not.

Business and personal finances are in the category of items that should not be mixed!

Although it may seem like a headache to keep them separate—who wants to manage all those bank accounts?—your life will be greatly simplified once you separate your personal and your business finances, especially your expenses.

Paperwork and taxes will be easier to manage and you’ll have a better idea of how much money you spend on your business. Here are some tips to keep your personal and your business expenses separate:

Understand the difference between personal and business expenses

Most times, the line between personal and business expenses is clear. Any expense that is directly linked to your business earning an income is a business expense. If you buy something to be used for your business, it’s a deductible business expense. If you buy something to use privately, that’s a personal expense.

If something is mixed between business and personal, such as a laptop that you use partially for business and partially for personal use, you can only claim a deduction for the amount that you use for business. So if you use the laptop for business 75 percent of the time and for personal use 25 percent of the time, you can only deduct 75 percent of the laptop.

Whether you use something entirely or partially for business, you need to have a record of the purchase.

Open a business credit card and/or bank account

Having a business credit card and/or bank account provides you with an easy way to not only keep your private and business expenses apart, it also gives you an easy way to track your expenses. When you use the same accounts for business and personal use, everything is mixed on the same statement and it can be difficult to determine—or remember—which transactions were related to your business and which were for your private life.

With business accounts you know that every transaction is related to your business and should therefore be deductible. You don’t have to search through every statement at tax time to highlight the deductible expenses because every transaction is business related.

You can also easily check your statements to see how much money your business is spending. That’s incredibly difficult to do if your business and personal transactions are all linked to one account.

Where possible, buy separate business items

Depending on how small your business is, you may not be able to keep all items separate, but buying devices that are used for both business and personal use gets complicated. In an ideal world, you have a separate computer for home and work, a separate work and personal cell phone and even separate vehicles.

Having duplicate items for work and personal use makes it much easier to track expenses. Rather than determining how much of your cell phone bill you can deduct for business, you know that your business phone is 100 percent deductible. Same with your computer and your vehicle. It costs more—especially the separate vehicle—but it keeps your personal life separate from your business life.

Final thoughts

It can be tempting to try to write everything off as a business expense but don’t fall into that trap. Open separate accounts, buy duplicate items where you can and keep receipts of your business expenses.

If you’re unsure, talk to us to find out which activities count as a tax deduction and which do not. We can answer your questions and can even help you come up with a system to track your expenses.

General Financial Information

How to choose a financial planner

No matter how much money you currently have in the bank, it’s a good idea to consult with a financial planner sooner than later. There’s no better way to start mapping out strategies for investing – and saving – so you can meet your short and long term financial goals.

Financial planners are there to help you save time and money as you prepare to buy a house or commercial property, invest in a business, or plan for retirement. Ultimately, by relying on their expertise you’ll make better financial decisions that will grow your wealth and increase your security.

These tips can help you find the best financial planner to meet your unique needs.

Get clear on your goals

Before you start searching for a financial advisor, examine your goals. Keep in mind that most of us aren’t focused on just one objective (which can make the planning process feel overwhelming before you even start – another good reason to seek the advice of a professional).

Many financial institutions offer free online planning tools – a great way to start narrowing down your goals and calculating how much money you need to achieve them.

Some goals to add to your list might be:

  • a big event (e.g. a wedding or travel)
  • a down payment on a home
  • your child’s university fund
  • retirement

Get all those goals – big and small, short and long term – down on paper. They’ll help you start the conversation with a financial planner whose expertise aligns with your objectives.

Check qualifications

There’s no shortage of financial planners out there to choose from – but not every planner is licensed, or has the right credentials, training, or experience to meet your needs.

With your goals in mind, start researching financial planners in your area who hold relevant professional designations and appropriate licenses.

Ask your friends and family for referrals – ideally people you trust who are in the same stage of life as you are.

These 10 questions are good to ask financial planners, they cover the basics and will help you get a feel for whether or not a planner may be a good match.

Inquire about payment structure

The best model if you’re just starting out with financial planning is a fee-based advisor (i.e. someone who charges by the hour, a flat fee, or percentage of the assets under management) rather than a commission-based advisor – especially if your planning needs aren’t particularly complex.

Make sure the person you’re hiring to help you make key financial decisions isn’t nudging you toward options that benefit themselves, first and foremost.

A few final tips

If you scanned the interview questions linked to earlier in this article, you’re already familiar with fiduciaries – still, the point is so crucial it bears repeating.

Because a fiduciary is legally required to act in their clients’ best interest at all times, and are thereby accountable to the highest standards of their profession, it’s recommended you only consider working with financial planners who can claim this designation.

Last but not least, don’t be shy about asking for references from a planner’s clients and other professional colleagues – accountants, insurance agents, or lawyers – so you can get a full picture of the person you choose to handle your most important financial decisions.

Business General Financial Information

Growing your business without borrowing

Taking out a business loan may be your first plan of action for financing business growth. But there are excellent reasons to consider other options for finding capital to expand your business.

For one, it can be very difficult for a small business to secure financing, especially in the early days. You’ll need to prove to a lender that you aren’t a high risk, with financial documentation that shows your company has been profitable for a few years.

When you take out a loan you’ll need to consistently make payments toward the principal, interest, or both, depending on your agreement. If for some reason you can’t make your payments, the problem can snowball from losing the assets you pledged as collateral to more devastating losses, including bankruptcy.

Consider these four ways to finance growth without approaching a lender for money.

Ask for pre-payment

This option is as simple as asking your customers to pay you in advance of receiving your products or services. Explain that you are changing your payment policies and your new terms are that you receive payment on the first of the month, at the beginning of a project—whatever works for you. As the owner of your business, you get to decide when and how much you need to be paid in order to deliver your products and services.

On a related note, you might consider using a subscription model for a new income stream. Some possible subscription-based services with a recurring pre-paid fee are:

  • a password protected website offering valuable info and community for your customers
  • a monthly service membership website (i.e. beauty, dry cleaning, home maintenance)
  • box kits for DIY enthusiasts (i.e. cooking, crafting, and other hobbyists)

Try Crowdfunding

Crowdfunding campaigns connect individuals with a community of willing donors via a platform such as Kickstarter, Fundable, or Indiegogo in exchange for some reward.

In addition to providing an inexpensive source of financing, crowdfunding allows entrepreneurs to gain market validation for a new idea before overinvesting—and provides an opportunity to market to potential new customers. You’ll be able to start selling before your new product or service is ready so you can continue to avoid the small business debt trap.

Form an alliance
Partnering with other businesses is mutually beneficial: each company can increase their sales by introducing each other’s products and services to their own customers at no added cost. You can potentially attract brand new customers, too, by increasing your range of offerings by way of your alliance.


Likewise, a marketing alliance is a simple strategy where two companies agree to spread the word about each other’s products and services with their customers. Each partner would earn royalties on sales to the other partner’s customers, bringing in easy growth revenue without any additional marketing or advertising costs.

Final thoughts

As you move forward with your next phase of business growth—no matter how you fund it—be sure to touch base with a business advisor. Seeking the guidance of experienced business experts who can help you update your business plans, and choose the best strategies to cut costs, increase profits, and achieve your short and long-term goals, will lead to greater success.

General Financial Information

How to Maximize your Assets before Retirement with Tactical Investing

Risk tolerance, time horizon, and asset allocation – you’ve dealt with these factors for a good part of your life, but now, in the face of retirement, they take on a more urgent and significant role. These factors – particularly tactical asset allocation – are vital to maximizing your assets before your retire in a few years’ time.

Business General Financial Information

Tips to Keep Your Business Finances in Order

If you’re like most small business owners, you spend the majority of your time managing daily operations, keeping customers happy, and looking for new ways to grow. Spreadsheets, cash flow analysis, and financial projections are probably not your first passion.

However, measuring profitability, creating realistic budgets, and planning ahead for the future are crucial to your professional success.

Follow these four tips to get a handle on the numbers, and take control of your business finances.

Move to the cloud

How much of your time do you spend hunting down financial documents, poring over spreadsheets, and tracking expenses?

Constantly searching for and trying to integrate scattered data makes it nearly impossible to close out the monthly books quickly and efficiently. Plus, reliance on spreadsheets is a proven liability. Research shows over 88% of all financial spreadsheets contain errors.

Manage your business finances faster and more accurately by moving them to the cloud.

Cloud-based financial management systems have several benefits, including:

  • Integration with all your other operational systems for the quick retrieval of the most current data;
  • Automation of daily financial processes so you can step away from spreadsheets;
  • Efficient expense tracking that improves accuracy and reduces revenue leakage; and
  • Easy collaboration with team members and stakeholders.

Conduct regular financial reviews

Experts agree that vigilance is key to effective business financial management. Each month, set aside time to review your balance sheet, profit and loss statement, and cash flow statement.

Regular monthly check-ups will give you actionable insights into your business performance and growth potential. This information is crucial for:

  • Projecting future revenue, cash flow, and expenses
  • Validating major purchasing decisions
  • Anticipating and mitigating risk

You’ll need this key data, too, if you ever want to apply for a loan to expand and grow your business.

Bring a professional on board

On the surface, hiring an experienced bookkeeper or accountant may seem pricey, but their expertise could mean considerable long-term gains for your business.

A technical financial expert can optimize the efficiency and accuracy of your financial management, granting you peace of mind and added time to pursue growth opportunities.

Plus, most small businesses don’t need full-time professional help. Part-time services are typically enough to help you manage crucial processes, plus a few extras, including applying for a business loan or overdraft, articulating and adapting your business plan and managing sudden growth – for example, hiring new staff, acquiring office space, or determining when to introduce a new product or service.

Final tips

Consider enrolling in a basic bookkeeping or accounting course so you can better understand the fundamentals of business financial management. The knowledge you gain will feel empowering, and can help clarify discussions with your accountant.

Self-education is also key when it comes to investing in financial IT. Be sure to do your research and consult an expert before investing in any new accounting solutions for your business.

Your knowledge, combined with professional support, is the very best route to sustainable, effective business financial management.