BENCH SMALL BUSINESS GUIDES Step 1. Separate your business and personal expenses To track your business finances effectively, it’s important to permanently separate them from your personal finances. Why? Liability—if you’re running a corporation or limited liability entity and there isn’t sufficient distance between your personal and business finances, there’s a chance that you could be held personally liable for any debts incurred by your business. Plus, you’ll want to pull your hair out when it’s time to reconcile bank statements, and you have to hunt down the receipt for that $200 brunch to remember if it was a date, or a client meeting. 7