Multiple businesses/1099s: Is it best to have a separate budget for each small business or just ONE "business" budget that holds them all?
Hi all, I have been going through the incredible tutorials and browsing the forum (such great info here!) and I wasn't able to see this question asked and answered yet. My wife and I both have W2 income that goes into our personal checking account and we also have get 3 1099s at the end of the year for small/home businesses - these all have their separate checking accounts and they are all sole proprietor so we don't (yet) have an S-Corp or LLC. When I was using YNAB4 I just had everything in one budget but I see that it makes sense to have a separate budget for business. My questions is should each business/1099 have a separate budget in YNAB or just ONE business budget that has all of them:
Thanks in advance for any tips! :-)
Hi Randy R. !
Nolesrule is exactly right. If each business has separate finances then separate budgets are the best way to go. That way you don't accidentally budget Business 1 funds towards Business 3, or any other combination of them.
If you have a moment, check out this article on how to set up a business budget.
Our founder, Jesse, has written a number of blog posts that would be helpful. Here are some great ones:
- Goodbye Quickbooks: You Need a Separate Business Budget
- Moving YNAB to YNAB
- YNAB’s Business Category Setup in YNAB Revealed.
- Goodbye Quickbooks: Use YNAB to Track Accounts Receivable
- Success Story: How YNAB Helped Me Launch A Profitable Business
Keep in mind that they were created based off of our previous version of YNAB (YNAB 4) so you won't recognize some of the screenshots. The information is all still relevant, though! :)
Thanks for the responses. One of the businesses is not self-sufficient where it can fund itself yet so one of the other businesses does help fund it for now. So if I did have separate budgets for each, would I take money as an "owners share/salary" or similar to take the funds from my self-sufficient business (business 1) into my personal account and then send the necessary funds from my personal account to business 2 when needed? Also, I have a separate savings account that is just to collect quarterly tax payments from each business (after watching some of the videos I can see that this may not be necessary anymore). If I have separate budgets for each business, i am not sure which budget should include the tax payment savings account since each budget would be contributing to it. Any tips/suggestions on that? Thanks!