Co-mingling personal and business expenses to vendors

[David Cianci]

Hello all,

I just started a rental arbitrage business. I need to pay my first vendor for services they did for my business. The vendor asked to receive payment from Venmo which I use my Venmo account for personal usage. I have been told that I should not co-mingle my personal expenses and business expenses on one platform. Should I make a PayPal account for strictly business purposes to use instead?

On a side note as well, should I make a business bank account strictly for paying employees when I eventually bring them on shortly? I already have a business bank account for storing my revenue, but I wasn't sure if I should pay my employees from that business bank account or make a completely separate one for that.  

[Benjamin Weinhart]

Hi David,

You're correct in that this is the best method to use right out of the gate. It's better as it's much easier to identify expenses and keep everything separate if you use a dedicated business account, and they're usually fairly simple/cheap to create. As for a secondary bank account, it's perfectly normal to use one business checking account for both revenues and expenses and I'd recommend you keep it as so. No sense in creating unnecessary complexity, especially as you're still in the early stages. Just be sure that you're keeping good records on the back-end for bookkeeping and you'll be in good shape!