Some small business owners may be a little more confident in their financial practices than they should be, according to a recent survey from Clutch, a business-to-business research and reviews company. Here are two examples of risky financial practices and some financial advice you should follow instead.
Advice #1 | Use professional tax help
The decision to prepare and pay taxes without the help of a professional tax preparer or accountant may be a practice that seems to save money but could lead to a greater loss (especially for 30 percent of the survey respondents).
30% | Percentage of small business owners who believe they overpay their taxes and could claim more deductions and credits.
93% | Percentage of small business owners who rate themselves as “very” or “somewhat confident” in their ability to accurately file taxes.
Or, in other words, 30 percent of survey respondents simultaneously believe they can accurately file taxes while think they overpay.
Advice #2 | Keep personal and business banking in two separate accounts
Here’s another financial practice small businesses should follow, but many don’t.
27% | Percentage of small businesses who do not keep their personal and business finances in separate bank accounts.
23% | Percentage of small businesses who have experienced challenges with mixing business and personal finances in the past year.
Or, in other words, nearly the same percentage of small business owners who co-mingle their business and personal bank accounts have experienced a financial challenge due to the practice.
Bottom line | Do the math. Get help doing your taxes and have two separate bank accounts.