Financial Health: check out 3 tips for not mixing personal money with company money
More than 1.3 million companies were opened in Brazil in the first four months of 2022, according to the Bulletin of the Map of Companies, 11.5% more than that registered in the last four months of last year. Entrepreneurship continues to rise and micro and small businesses stand out, representing 99% of all companies and accounting for 27% of the national GDP, according to the bulletin. Many of these entrepreneurs go through some difficulties at the beginning of the business with regard to the financial health of their business and one of the most common is to differentiate personal money from the company’s income.
Founding partner of iCred, fintech that facilitates personal and payroll loans, warns about the importance of separating accounts to have more chances of success
“It is important to have control. When opening a business as an Individual Microentrepreneur (MEI), for example, it is interesting to separate an amount for personal expenses and leave another for the company’s accounts, such as inventory and capital turnover. Reconciling the two ‘lives’ in an organized way increases the chances of financial success”, explains Túlio Mattos, founding partner of iCred, a fintech that facilitates payroll loans.
The executive gives three tips on financial health that help to avoid the confusion of personal and professional accounts. Check out:
1- Separate bank accounts
One of the ways to make a clear distinction between personal and company money is to maintain a bank account exclusive to the business, that is, separate from the personal bank account.
“Many institutions offer options for corporate accounts and this differentiation is even important to know how much comes in and goes out of your company”, advises Túlio.
2- Write down the inputs and outputs
In addition to separate bank accounts, having a spreadsheet, notebook or application, with the record of all entries and exits, helps the entrepreneur to have a broad view of the financial health of the business and to identify what is effectively the company’s expense and income.
“Creating a cash flow can help. With this, it is possible to have a macro view and plan the next steps, accounts receivable and payable. I recommend doing the same in your personal life, to have better control of your household budget and see your personal and professional money clearly”, says the founding partner of iCred.
3- Set your salary
The greatest difficulty for a MEI is to define their pro-labore or salary. It is different from the company’s profit.
“Do not transfer the business profit obtained in a month to your account, as if it were a salary. Research how much a person in the industry earns in the market and separate that amount as your pro-labore. Thus, you will have more control over the company’s expenses and revenues, increasing your chances of making it successful”, concludes Túlio.
About iCred:
Fintech created in early 2022 to facilitate access to credit and personal loans. With just one year of operation, the company has already anticipated more than R＄400 million. Approval of each user’s registration is done in up to three minutes, with money quickly released via PIX. It offers a line of credit for anticipating the FGTS, started granting the Consigned INSS in January/23, and intends to launch the Consigned Card by the end of the year.