When it comes to your direct sales business, you may be tempted to use the same credit card and banking account as you do for your personal expenses. But it is best to use separate accounts for your business due to the record keeping you need to do for your business.
Business vs Personal – By having two accounts, it is easy to identify which purchases are for business and which are personal. Just by looking at your statement, you cannot tell if that Wal-mart purchase was for paper for your printer or a new watch. Of course you have the receipt for backup, but sometimes you want to know at a glance.
Taxes – Not only is it easier to identify expenses when you have separate banking, but if the Tax department ever comes to audit you, you will have a clearer trail for them to follow. If you put your printer paper through your personal account, they may dis-allow it as a business expense.
Tracking – It is much easier to tell if you made or lost money in your business when you track it separately. If you run everything through your personal accounts, how will you know if you lost money or if you actually made money? You can always transfer from your business account to your personal.
Auto-pay – If you have expenses for your business that occur on a regular basis, you can set them up to charge your business account and make sure to leave funds in there to cover it. If you put it to your personal account, you may forget about it and end up in an overdraft.
Life is much easier if you separate your business and your personal financial life. You should be able to find accounts and cards that are free wherever you do your banking. Try to always have a balance in the account so you do not get surprised by website fees or other costs.