But money is the greatest commingler of all. While it is pretty tempting to commingle the money of your lemonade stand and the money of pizza sales, you should resist it, since this will be the fastest way to confuse your accountant and the IRS. It is high time you create a barrier between the budget of your noodles and the income of the startup.
The first step to be taken in order to create separate accounts is getting a separate checking account. You should visit a local branch or Bank of America and open there a business account. Some times there are special offers for students which imply that you have no monthly fees. This account will serve as a VIP room where all money earned by the startup resides.
You should pay yourself a salary. Every month you should make an automatic transfer of a definite sum of money from the business account into the personal one. You should consider your business as a parent who gives allowances to his/her children. Do not touch the business money and go to a restaurant without any permission.
You should get a new credit card and put “Business Expenses Only” on it using Sharpie. All the payments related to inventory, software subscriptions and shipment should be made with this card only. If you need a textbook for your university, you should buy it using your own credit card and not the credit card of your company.
Every transaction should be traced like you were an investigative detective looking for the evidence. There are some services such as QuickBooks or Wave which will assist you in this matter. You should categorize all the expenses immediately after they occur so that you could remember why exactly you spent this money.
Commingling money is the biggest mistake you can make. Not only does it eliminate all legal protection but also makes your company look like a hobby to the government. Separating everything shows that you are serious about the process. Try to treat the business properly and it will reward you back.