Separating personal income from contractor business cash

Small contractors often run into accounting trouble before they run into lack of work.

The job money comes in, materials go out, a few personal bills get paid from the same account, and suddenly nobody can tell what the business really earned. It feels manageable until tax time or until a slow month exposes the mess.

The first fix is not complicated: separate the business cash from personal cash. One account for business income and expenses. One regular owner draw or payroll method. No guessing later.

A clean setup usually includes:

State rules can vary, so a local accountant is still worth using. But even before that, the contractor needs clean records. Good accounting starts with boring habits, not clever cleanup in April.