What Are The Benefits Of Separating Personal Finance From Your Business Finances?

A fairly common mistake among individual micro entrepreneurs and small businesses is to mix private finance with finance for your own company. But why is this practice considered incorrect?

When making this mix, it is not possible to evaluate the performance of your business or your personal financial life.

For example: at the end of the month, you found that there was no money left to invest in more computers for your microenterprise. However, you do not know how to explain the lack of cash: because it is all in one cake, it is not possible to identify if there is no money because you spent a lot on personal expenses or if it was due to not having many customers in that period .  

Thus, having a separation of finances is essential to make appropriate decisions regarding your business and personal expenses. Therefore, below are 3 benefits of this separation.

Discover the signs and reasons your accounts are in the red

Do an important exercise: list only your personal expenses, such as paying the rent for your apartment, your child’s gift, buying a new car, among others. Afterwards, make a new list, this time inserting only your business expenses: the rent of your office, the salary of your secretary, taxes, etc.

The result of separating the accounts from these two lists will allow you to be able to identify the state of your corporate and private finances, allowing you to draw a kind of picture of your own finances. Through this picture, you will see if today it is necessary to reduce your personal expenses or if your company is making a profit or loss. In other words, the separation will give you the proper analysis of your accounts.

Let’s understand better:

For example: the owner of a technology company could not identify why there was no money left over to pay the rent for his office. In this way, he surveyed his personal and business expenses:

With a monthly income of R $ 8000.00, the company’s microentrepreneur understood the reason why there was no money left to pay for the rent of the office and also identified that the extra expense he had with the holiday trip was responsible for the overflow budget in that period.

Therefore, the entrepreneur decided to reevaluate his extra expenses and other accounts, in order to analyze what could be reduced so that there was no personal or business loss in the following month. This whole analysis was possible only with the simple separation of expenses.

Set your own salary!

Controlling the resources that enter and leave your cash is a powerful tool for the sustainable growth of your business. Thus, it is essential to have financial control of your company so that it continues to be maintained.

The withdrawal of money at all times for personal purposes hinders the company’s financial management. Therefore, it is necessary to define a pro-labore , that is, a remuneration for the managers of your company must be determined.

In addition to setting a “salary” for the administrator, it is also necessary to set dates for this receipt, similar to large companies that stipulate a salary and dates for this type of deposit. Therefore, you will have to see yourself as an employee of your own company to be able to put the pro-labore into practice.

With the separation of personal and business finance, it will be easy to define the pro-labore, as important for the company’s progress as it is for personal control.

In view of the remuneration you will receive monthly, you will be able to better control your personal expenses, knowing that they cannot exceed the amount of the pro-labore.

Find out how your financial health is doing

Do you have a dream of taking an incredible international trip with your family next year? Or would you like to finance a property? Would you like to expand your business by investing in more employees and offering more services?

All of these issues can become a reality as long as you have a clear view of your personal and business financial health . By leaving the two mixed together, you will make a misjudgment of your entire financial life, not really knowing if there are conditions for you to invest in your business or plan your New Year’s trip with your family.

Now that you know the main benefits of account separation, here are some quick and practical tips to help you get started! It is important to remember that Começo Certo has a team of specialists who can guide you in the financial management of your business, such as defining the pro-labore, opening your company, among others.


Record your personal and business expenses separately

today there are several free apps that offer the service of registering your cash inflows and outflows. If you don’t want to, you can also choose to use spreadsheets and manual notes. The important thing is to keep everything registered;

Define your pro-labore

in other words, define your own remuneration, avoiding taking out several excess amounts from the company’s account;

Establish a payment schedule

organizing a calendar is important so that you know when your expenses actually fall and are able to anticipate payment on the correct dates, avoiding contracting interest on debts. The calendar will also be important for the pro-labore, which should always be launched on a specific date;

Have two bank accounts

one for personal use, the other for business use only. This step is essential to ensure the separation of accounts, as it will give a clear view of the segregation between expenses and investments intended only for your business.

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