Separating personal and business finances

As a rule of thumb, it's always best to have a separate account for your business, regardless of your business' age or size. Blending your personal and business finances is called comingling, and it should be done as little as possible.

By law, when you become incorporated, have a limited liability company (LLC) or partnership, you must have a dedicated business checking account.

Practically speaking, however, if you're very new, and/or a very small sole proprietor without employees, you may want to wait until sales revenue and expenses are such that you're not having to fund the business with your own cash infusion on a weekly basis. Open a separate business checking account and establish a business debit and credit card for business expenses as soon as you can.