How to Maintain Separate Finances for a Home Based Business

Contributor

By eHow Contributing Writer

Article Rating: (1 Ratings)

Don't lose track of your finances!

Starting your own freelance or home-based business can be an exciting time. However, people often make the mistake of believing that it will be easier to forgo setting up special financial accounts for this type of business. Instead, they allow their personal and business expenses to intermingle. This can cause a lot of problems when you are trying to calculate your true earnings and report them for tax purposes, unless you keep meticulous records. To make it far simpler to track the financial progress of your business, it is much better to separate your personal and business finances from the beginning.

How to Learn the Basics of Accounting
Many small businesses don't have that in-house financial team to monitor the books for them. So whethe… More
How to Learn Debits & Credits
Because debits and credits are the basics of finance, it is important to understand how they function befo… More
What Is General Accounting?
Every parent or organizational leader has had to deal with managing a financial account of some sort. Whet… More
Purpose of Accounting
Accounting is a crucial discipline for keeping track of quantifiable factors for a business or individual.… More
How to Transition from Manual Accounting to Computer Software
Many accounting computer software packages are available to make accounting much easier. However, people w… More
How Does a Savings Account Work?
… More
About Long Term High Interest Savings Account
The search for a long-term high interest savings account begins with the applicant first learning the mini… More
Skills Required for Accounting
The skills required for accounting are straight forward enough and with the exception of technology, don't… More
History of Accounting in America
The recent economic downturn along with notable controversies at Enron and Arthur Andersen have increased … More
How to Save Money
Learn how to save money for emergency expenses in this free video clip on personal finance.… More
Duties of an Accountant
Accounting involves much more than just filling out tax forms at the end of the year. Accountants are res… More
Is Accounting Difficult?
… More
How to Balance Your Checkbook with a Bank Statement
How to use your bank statement to balance your checkbook in this free video clip on personal finance.… More
How to Maintain Separate Finances for a Home Based Business
Starting your own freelance or home-based business can be an exciting time. However, people often make the… More
How to Learn QuickBooks Online
QuickBooks by Intuit is an innovative, easy to use, program that can make running a small business easier.… More

Difficulty: Moderately Easy

Instructions

Step 1

Get a separate email account to use for your business endeavors. If your current email account has the option to add additional addresses, you can add one there. If not, you can set up a free email account through a provider such as Gmail or Hotmail.
Step 2

Open a separate bank account. This account does not have to be a business account. It’s perfectly fine for this account to be a personal bank account. Just make sure that you only conduct transactions through this account that relate to your home-based business. If available, ask your bank for a debit card for this account.
Step 3

Set up a new PayPal account under the email address that you created in Step 1. This will allow you to receive funds over the Internet without having to open a merchant account. Make sure that you verify your PayPal account.
Step 4

Add and verify the bank account that you opened in Step 2 to your PayPal account. After doing this, you will be able to transfer money back and forth from your bank account to your PayPal account. There may be monthly limitations on the amount of money that you can withdraw to your bank account at first. Continue to Step 5 to remedy this.
Step 5

Add and verify a credit card to your PayPal Account. If you received a debit card for the bank account that you created in Step 2, use this card instead of a personal one. Once you do this, PayPal will remove any limitations on your withdrawal amounts so that you can transfer as much money each month as you desire.