There has been demand from the market to rerun this article due to its importance, as the last time we shared it was in 2022.
As emphasised before, getting personal transactions entangled with business transactions is something most farmers and agripreneurs do, and it may come easy. However, this poses a risk to the business – and more importantly, it leads to lost opportunities in business growth.
For agribusinesses that are predominantly used to farming traditionally, this is innate. With evidence of the business potential in agribusiness, it is imperative that we treat all agribusinesses with utmost importance, and understand all the aspects that contribute significantly to the bottomline.
Separating personal accounts from business accounts is one crucial aspect of every agribusiness. Transacting separately will streamline cash flow, make record-keeping much more efficient and readily available for financial statements and tax submissions, and protect you from personal liability.
Now that we have reiterated the importance of separating personal transactions from that of the business, I would like to elaborate further by stating a few tips on how to get started. It is never too late to start doing the right thing that will benefit you and your business significantly in the long run.
So, how do you separate the personal accounts from that of the business consistently?
Select your business type, and register it accordingly.
Open a business account, with its own debit banking card.
Compile a budget for your business, and monitor it monthly.
Ensure all your business transactions are recorded accordingly.
Create a file specifically for your business receipts and all the farming financial supporting documents as proof of transaction.
Ensure everyone who handles the business accounts, be it your family or partner, understands how you transact your business activities.
Business is a separate entity, so ensure it pays you a monthly salary to avoid taking funds from the business when and how you please. Finally, understand what is deemed as business expenses.
For assistance and support, get in contact with a financial professional. We must operate farming activities with intention and per business strategy. Let us maximise the agribusiness potential and its profitability.
*Mekupi Kambatuku is a managing consultant at Simpli Business Advisory. She can be reached at admin@simpliadvisory.com for feedback or any queries.