One of the most common mistakes small business owners make is failing to separate personal and business finances. Using personal accounts for business expenses may seem convenient but can create confusion, especially during tax season. It can also make it difficult to track business performance accurately.

Why This Matters:

• Blurred financial records lead to inaccurate reporting and missed tax deductions.
• Auditors may scrutinize mixed accounts more closely.

How to Avoid It:

• Open a separate business bank account and credit card.
• Record all business transactions promptly using accounting software.
• Maintain clear documentation for all transactions, including receipts and invoices.

By keeping personal and business finances separate, you’ll streamline accounting and avoid unnecessary stress during tax time.