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The secret of a good work life balance? Separate accounts!
Maintaining the perfect work life balance isn’t just about keeping office and domestic life apart.
According to insolvency practitioner Stephen Beverley, of the Sheffield office of insolvency practitioners Leonard Curtis, it’s equally important that finances for home and workplace should be strictly separated too.
Stephen explained that a failure to maintain separate accounts is a common cause of financial problems, particularly when a business is struggling and there is a chance that debts might be called in.
“Even something as simple as utility bills for your premises need to be registered in the name of the company and not in the name of an individual,” he said.
“Sometimes it’s simply not spending the time ensuring all the paperwork is correct, but everything from heating to water and your phone and internet lines should all be registered to your company and not to the individual.”
“It’s about attention to detail and understanding that you are leaving yourself vulnerable if you do not ensure business accounts are set up in the business name.”
Stephen added it was a particular problem for people who had started out as sole traders but then were advised to become a limited company - forgetting that they would need things like a new VAT number, bank account and utilities accounts.
“Former sole traders who have switched to trade via a limited company too often never get round to fully switching everything or are happy with the terms they get with a sole trader account. It is only further down the line, when they are personally liable for a debt, that they understand how important it is to keep things separate,” he said.
“Even if you are setting up a new business, it is just as critical that company accounts - be that bank accounts or with suppliers - should not be simply registered in the name of the director, which can happen in error.
“If there are problems the service provider will simply pursue the name on the account and will not care about the consequences for either the individual or the other company.”
He added, though, that prompt action to separate tangled accounts could prevent a crisis.
“Seek professional advice early, identify what the problem is and devise a way of navigating a way forward that does not put your home life at risk,” he said.
“Get all your paperwork in order, pay attention to detail and make sure that things like lease agreements and utilities are in the correct name because too often that is where the problems arise.”
To find out more about the full range of services provided by the Leonard Curtis team in Sheffield call 0114 285 9500.
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