Blurred Lines: Business vs. Personal Expenses (And Why It Matters More Than You Think)

Hey new business owner—your Venmo habits might be holding you back.

Starting a business is exciting. You’ve got ideas, energy, maybe a supportive family backing you, and now you’re bringing your vision to life. Whether it’s a startup with big dreams or a side hustle growing into a family-run operation, you’re officially in business.

But here’s something we see all the time at Mountain Top Bookkeeping: those early days get financially messy—fast. You buy office supplies with your personal debit card. You pay for lunch with the business card (but forgot it was a date, not a client meeting). You cover inventory costs from your joint account “just for now.”

It’s normal. It’s common. But it’s also a financial minefield.

If you’re serious about your business succeeding, it’s time to get crystal clear on what’s a business expense… and what’s not.

Why the Separation Matters (Even If You’re Just Starting Out)

Think of your business like its own person. Would you let your friend randomly dip into your checking account every time they needed something? Hopefully not.

When you mix personal and business expenses, you're not only creating accounting headaches—you’re putting your business at risk. Tax time becomes a nightmare. Audits get messy. And if you ever want funding, loans, or investors? A tangled financial trail is a huge red flag.

You need clean books. And that starts with boundaries.

So What Is a Business Expense?

Let’s simplify it. A business expense is any ordinary and necessary cost of running your business.

Bought a new laptop you’ll use 90% for work? Business expense. Paid for Facebook ads to promote your new product? Business expense.

Took your cousin out for dinner to celebrate launching your Etsy shop? Sorry—that’s personal.

The IRS is surprisingly flexible and picky. So when in doubt, ask yourself: Would I have made this purchase if I weren’t running this business? If the answer’s no, you’re probably safe. But when it gets murky (looking at you, cell phone bill), that’s when a good bookkeeper can help you split and categorize correctly.

Pro Tip for Startups: Get a Business Bank Account—Now

Even if you're not rolling in revenue yet, separate accounts are essential. That way, every swipe, transfer, and subscription is tied to the business and nothing else. No more guessing. No more combing through months of statements with a highlighter and a prayer.

Trust us—it’ll save you hours and stress down the road.

Bookkeeping for New Businesses Doesn’t Have to Be Complicated

You don’t need to become a finance expert overnight. But you do need a system that works—and someone in your corner who gets what you’re building.

At Mountain Top Bookkeeping, we specialize in bookkeeping for new businesses, startups, and family-run operations. Whether you’re trying to set up your books for the first time or clean up a few months of “we’ll figure it out later,” we’re here to help—without judgment, and without jargon.

Let’s make sure your startup financials are working for you, not against you. Reach out today and let’s untangle the numbers—so you can focus on building something great.