Personal funds
Do you ever use personal funds to cover business expenses (or vice versa) during tight times?
Mixing personal and business funds is generally something to avoid, but it does happen during short-term cash shortages.
If personal funds are used for business expenses, they should be clearly recorded as an owner contribution or loan, not ignored. Likewise, if business funds are used personally, they should be recorded as an owner draw — not as a business expense.
Clear documentation is critical. Without it, bookkeeping becomes confusing and tax reporting can become inaccurate. Long-term, building a business cash reserve helps reduce the need to mix funds at all.
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