Small Business Issues: Using a Personal Account to Pay Business Expenses Can Lead to Trouble

Credit CardsAs accountants, we often work with small business owners who face a barrage of challenges. For example, as a small business owner, it can be difficult to keep your personal and business expenses separate. So many business owners use personal credit cards for business expenses.  As trusted advisers, we continually advise our clients against mixing their business and personal accounts. As referenced in this Fox Business article, it can be a bookkeeping nightmare, not only for the owner, but for the accountant as well. Upon reviewing the records, it is hard to determine which expenses are business and which are personal, and to provide proper support for the deduction. Additionally, credit card companies can take adverse action against cardholders who use personal accounts for business services.

In the end, the owner always feels like they missed something, and the accountant always feels like the included something they shouldn’t have. Please trust your accountant and get two separate credit card accounts!

Need help keeping your accounting straight? Check out our website and let us give you a hand.

Wendy Kelly

Wendy Kelly joined CDH in November of 2010, and serves as Principal in our Assurance Group. She brings more than 20 years of experience working exclusively in public accounting. Wendy was deeply involved in the implementation of a women's initiative at her previous firm, and has been active in starting the Women's Initiative at CDH. In addition, Wendy sponsors ongoing education for women related to networking, communication differences between men and women, and work/life balance. http://www.cdhcpa.com
This entry was posted in Family Business, Finance & Accounting. Bookmark the permalink.

Leave a Reply