Topic: Dangers of combining company and personal funds in the same account (Read 607 times)

This makes sense, with a small business it can still be organized by taking into account different income and expenses, but it needs to be underlined that sometimes we always use funds from the business being run on the grounds that later it can also be paid, this is a small problem that usually becomes a habit, of course this is a bad habit. Because it will have an impact on the business that is run. So in my opinion, although combining business and personal funds is good, it must be managed properly so that business funds are not disrupted.

With good management it will make business funds uninterrupted even though there is a chance that business funds will be used for personal needs, it can still be controlled with a note that it is not excessive so that it consumes business funds which of course it will have a bad impact on business funds which are clearly funds needed for the business they have.

OP, I appreciate this topic, I wish I could reverse time, is just that the did has already been done, this act should be frowned at, to avoid putting both the individual and the company in jeopardy, I was working with a company and the treasurer was trusted to the extent that all the companies money was in his personal account, any purchase or expenses the company want to make comes from that account, but an ugly situation occurred one day when a delivery was made to the company but to pay the people was a problem, before anyone could know the treasurer started acting funny, as talking to you, till this moment the treasure and the company owner are still in court, even though investigation has been carried out to ascertain the actual event that took place, the truth will unfold no doubt, how are we sure the fund is still intact, but ordinarily this would have been avoided if the owner of the company had a company account.

For me, i would really be still making out that kind of separation on which it would really be just that be more organized when you do have a business whether its small scale or big scale then having those individual tallies and records would relaly be that much preferrable since you could really be able to easily tracked those incoming and outgoing funds. If you do have a personal acocunt for your personal money then it would be always
best that you shouldnt really be able to collide those funds that came from your investmentj so that you would really be having that a good track with your business expenses and profits on which it is really just the rightful thing to be done on a business if you do really want to see if its progressive or not. You would be able to make out some calculations and preparations basing up on on your sales on monnthly basis.
If you do tend to make some mix up or trying out not to separate then it would really be that confusing specially even if the transactions incoming and outgoing involved small amounts but the quantity would really be that making a mess on which tendency of errors and shortage could be possible.

This is why it would really be that best that you should really be separating those expenses to those business transactions not only just on having that a good track but also
you are really that tending to avoid on potential losses or errors that would be made up. It isnt easy but doesnt mean that you shouldnt really be putting up some emphasis into it.

It is really dangerous to combine company and personal funds in the same account for business growth because own personal funds are very small but it will be very difficult to calculate in case of having to save large funds for company work. Therefore it is better to keep your personal funds separate there will be no risk here. A system of knowledge about the effective management of financial resources of funds and enterprises to achieve the company's strategic goals and solve problems and improve performance. Not everyone can control everything in the same way so it is better to have a personal account.

I think this is all simple and the OP doesn't need to bother building a thick wall, because the point is that we can already see from the title alone, anyone already knows that any businessman who combines personal funds with company funds is an inappropriate action and is indeed not that's how to play. In fact, if a businessman dares to combine two sources of funds that should not actually be combined, then he does not know the procedures for running a business at all. To build good management, this point cannot be missed, especially regarding funding.

Quite reasonable, it is true that if the business they are running is small scale or means not too big in terms of the amount of income then I think I would agree with your assumption, that there is indeed nothing wrong if they mix money from their small-scale business with personal money for their living needs, one of the reasons could be because the amount of money from their business is not too large and they can still make records to just remember that the amount of business money in their personal account is so much.

On the other hand, if the scale of the business they run is quite large, then combining business funds with personal funds is really not recommended because it is clear that the amount of funds must be quite large and cannot be if they only rely on bookkeeping to simply separate personal money and business funds, and yes they need two account accounts to separate their personal funds and business funds. Although the actions of professionals who have known large or small-scale businesses but certainly this will not be too much of a problem if indeed the business they run is still small-scale with the state of the funds they manage is not too large.

If the business they are building is still on a small scale, I think there is no harm in combining personal funds with their business funds because they can do good bookkeeping so they can know about their business income and also personal expenses, but if their business is on a large scale, of course this is It would be a problem if they combined their business funds and personal funds. It would be better to have two different accounts to avoid problems in their business income and expenses.

Whether you are running a business for the sole aim of making profit or you are running a non-profit making organisation,  always put it at the back of your  mind that every business is a legal entity and should therefore be treated as such.

Just imagine sharing your bank account with your friend, siblings or even your spouse. Problems arise when you withdraw too much from the account,  the other party might become affected, especially when you tamper with money meant for a particular purpose. It will obviously result in temporary or even long-term misunderstandings. The best option is to split accounts for peace to reign.

When you combine company money and your personal money in same account, both you and the legal entity might suffer temporarily or long-term misunderstanding. Oh yea! You wouldn't notice until you crumble the the business with your constant drawings hoping to pay back which most times,  you end up not paying. Know this, when you withdraw from company's account for personal use, you remain indepted to that company until you pay back. The best option is to put yourself on weekly or monthly payroll. This should compensate you for the stress of running the business.

Again,  it will be difficult to keep proper books of account and where the company is a Limited liability Company,  how do you determine what portion of the company's assets to be used to settle debts in the case of winding up of the company?. Combining company funds with any other account is risky and should be avoided.

The savings account and FD are considered for depositing money for personal growth, and for the business, we have different types of bank accounts to deposit, like the current account. Even banks differentiate the account type, and each account serves different purposes too. If your personal and business accounts are the same, you have some issues regarding withdrawing the money at first because there is a limit in each type of account to withdraw money, and it even costs your business's future and isn't funny at all. The next major problem you face is tax. How could you explain your income? That's why people should learn financial literacy before entering any kind of financial situation.

Do you really think that corporate bank accounts or something that do talk about multiple owners or investors would really be  that allowing for such thing to happen or this kind of set-up?
If we do speak about company bank account then pretty sure that your co-investor would really be setting out that kind of approval whenever there would really be transactions be happening specially
on withdrawal then it would really be just that so normal that it would really be that requiring all of those signatures or allowing up someone to take up some transactions which we know that it would really be that impossible to sneak out on making tx without others been knowing. So it would really be that pointless.

In speaking about company money and your personal funds then it would really be that hard to make some trace up everything specially if the inbound and outbound transactions are plenty.
You would really be having a hard time on distinguishing for sure and that would really be that pain in the ass plus tendency on spending on companies funds would really be
high and this is why it would really be that recommended that it should really be that separated.

There are accounts that you can always ask for at the bank when you want to check your expenses and income and maybe I prefer to separate company funds and personal funds. The company has procedures for running it, even though you are the owner, when you place personal money with company money it will end up in different conditions and there is a possibility that the company will experience problems. If the money from both is combined, I think the company owner doesn't understand how to manage the company well.

I don't understand how this incident happened, but everyone who tries to place capital in a particular company must be based on an agreed agreement. How he had plans to buy the bus was beyond the company's knowledge and didn't certain purchases have to be approved by several people who had control over the company? In the end, he had to shed tears over the carelessness he had made even though he was the head of the company.

I often see companies having separate bank accounts that are managed well by people who are given responsibility. The company should have a much better system and incidents like this would not need to happen if they understood how to run the company. This is a kind of company that doesn't have a work system and doesn't have main tasks that need to be taken care of based on the responsibilities of each position.

Thing is, when you are working in a company or corporate job, if there's short in the money you holding in their money, of curse the blame will be put into you. No matter how good you are or experienced, when there's a case scenario that there's unusual transaction detected, you can easily provide the transaction history of the company account since you have your own personal account, cause once you can't give any proof and records, then you might get fired cause mixing would get messy to the records.

I actually understand your point that, having a company's funds doesn't mean you have the right to use it for your essential needs especially in the emergency one. You can take loans but you might go to jail if you use this especially without permission but mostly they doesn't approve the use of company's funds. That's why in this role, they really find someone who's capable on handling finances of the company.

things get worse by mixing personal money with company money or a business going bankrupt. Even if you have used a cashier application no matter how sophisticated it is, if you still mix personal money and business money it will damage your own financial management system.

That's why you have to be able to separate these two types of money well, even for businesses that have just been started, capital needs to be fixed and running so that the income must not be mixed with your personal money, you must not take the money from sales to buy any personal needs. especially if you have built a large business because financial management will be the target of an audit, differences may be discovered during the audit, which can result in large losses.

One word: Worst decision. This can lead to the collapse of a business in a short period of time. Maintaining an account is vital because you need to have liquid funds available all the time in a business. Whether it is investment into purchasing new material, investing in expansion, or from stuff like employee salaries, bonuses, and other emergency funds, it can help. If one is carrying the same checking and savings account then it can end up in disaster if personal gains increase over the period of time. For example, one may end up putting money into their luxury and leisure time which is the money that should have been for the things mentioned above. That is the risk when it comes to small businesses. We have already seen how big fintech works. They have public shares available that make it a perfectly stable company on the balance sheet. Plus when it comes to publicly operated company they have to show their balance sheet every year. Thats how they keep growing with the time. For privately own company the risk is always there but it depends on how they operate it.

This has become a very basic job for every businessman who wants progress in his business, because business capital is mixed up with money for his daily needs. It will be very difficult for a business owner to calculate the profits from his business so that there will be no progress whatsoever from his business and it will be easier for him to get into trouble because the basic source of his money will be unclear. Meanwhile, the employees themselves also don't want to know about difficulties other than their own salaries after they finish working.

Business people should separate their personal funds from their business funds so that there are no mistakes in making their business financial reports and if they insist on combining personal funds and the business they run, of course this will be a problem and make them lose the trust of their employees. You are right, if they don't want their employees to lose trust in them of course they have to have clear financial reports and not mix up their funds and the funds of the business they run.

Any good business person knows by now how to keep personal funds separate from funds meant for projects. In this regard where we talk about a company, it is unethical to even combine or receive payments to ones personal accounts.
A registered business or company is always required by law to have an account separate from the owners account, because the payment of taxes would have to show the company records of transactions and its turnover report at the end of a fiscal year.

The dangers are clearly spelt out and as a company involves many individuals working within it to make it successful, there has to be trust that the money coming in is there in a safe account and can be accounted for, so as to avoid issues of unpaid salaries or wages.

Again I am not really an expert on that topic but as far as I know this is a must, this is legislation that comes from many hundreds of years ago, in which on the past if a person made a bad business decision then not only they lost the money they destined towards that opportunity, but anyone that invested money with them could sue them and get all their assets.

However such a thing was stifling the economy and the development of countries, so companies were created as entities which limited the liability of their owners and they could lose only what the company owned and not their personal assets, so if there is no such distinction then a judge could easily declare the company does not exist and the people that are owed money by your company could go for your assets.

Combining company funds with personal funds cannot be recommended because this will be very dangerous in managing finances. It should be separated, this mistake is often made by small business people, their business does not develop or even goes bankrupt because financial management is mixed up. If this continues to happen continuously by mixing personal money and business capital money out of necessity, because they think that the important thing is that the family's needs are met but the bad thing is that you are tired of business but have no savings.


This will definitely happen, without having a good accountant the risk will only pay double. We should be able to anticipate.
1. Separate personal and company money
2. Separate physically
3. Make cash flow records (money in and money out
4. Make a plan for using the money
5. Postpone sales plans that are not useful
6. Control cash flow
7. Be strict with yourself and be more disciplined

I haven't tried this, but I know it won't be easy and will not end well. I do not understand that reason to combine personal money with business money when you can obviously separate them. Leaving them together will make your business financial track record difficult to trace. Difficult to calculate tax and other spendables.

In the future, when you will need auditing, everything will fall apart and the most important thing is that you will either be using your personal money to fund your business or you will use your business money to fund your personal life