Bad Idea to Mingle Banking

Mingle Banking - Complete Controller

Personal banking refers to the banking services used by customers unrelated to business. Personal banking is processed through local branches of banks. Some personal banking services include opening different types of bank accounts, credit card accounts, mortgages, personal loans, and lines of credit. Other benefits are provided, such as ATMs, online banking, transfers, and many others.

There are reasons many business owners might be tempted to keep the business accounts merged with personal bank accounts. However, this can lead to issues as the business grows. Therefore, it is best to separate the company and your personal bank accounts as soon as you start your business. LastPass – Family or Org Password Vault

How Small-Business and Personal Banking are Mingled

When an entrepreneur mixes their personal account with a business account, adverse results may occur. Business bookkeeping will also become mingled with personal banking and bookkeeping, which can complicate finances for both. Entrepreneurs have to face a lot of challenges when starting a small business.

Business owners, especially new ones,  have to figure out how to run business operations. Operations include managing finances, production, employees, and where the business will be located. While making these decisions, the entrepreneur often uses their own account to invest money into the business as initial capital.

From the business owner’s point of view, it seems logical to use their personal bank account to fund the business. When starting a business, if there are no investors outside of yourself, the temptation is to do business financial transactions directly from your personal account. Download A Free Financial Toolkit

Using this account can have long-term consequences on the financial health and stability of the business. Before starting your business, you should open a business account using the funds you saved or have received from investors. This establishment of a business account should be a priority and take place in concert with the creation of your business plan.

Adverse Effects of Mingling Small-Business and Personal Banking

  • Small business owners who mix personal banking with business operations often do not balance accounting statements. They do not interpret cash flow statements and financial statements with the balance sheets in a productive way.
  • Business bank accounts are helpful for business owners. In a time of need, they can get immediate loans and financial services. Credit card and debit card payments are made more accessible along with cash and check services. Customers use these facilities and come back to the same business when they are made convenient.
  • If the income generated is separately given to individual salary accounts of the small business owner, then there is less percent of tax charged. Tax deductions can be made accurate. But if the personal banking account is mingled with the business account, then tax will be charged at a higher percentage.
  • Tax is paid on time through business accounts. Cubicle to Cloud virtual business Cash flow statements must only refer to business operations, not personal banking. Thus bookkeeping functions are made more accessible.
  • An audit is for business accounting, but the income and expenses are misreported when both personal and business accounts are intertwined. This mingling of the accounts affects the audit process as well.
  • All business operations records must be kept if a personal credit card is used for any business operations. This record-keeping is a time-consuming and challenging task to do. It should be error-free as well. Mingling personal banking and business bookkeeping makes it challenging to track the records.
  • As the business grows, financial needs will increase, and it will eventually need a separate business account. A separate business account gives a clear picture of business functions, and the business’s credit history will be clear.


A separate business account prevents mishaps in the interpretation of accounting statements. It increases the credibility of the business. When the business grows from a small investment, eventually, a separate account will be a requirement.

It is best to start your business with separate personal and business accounts from the beginning. Also, you should set up your business to protect yourself personally against liability issues and other issues that can arise from being connected to your personal account.

Complete Controller. America’s Bookkeeping Experts About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. ADP. Payroll – HR – Benefits