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Mixing Business & Personal Finances? Fixing It Will Cost You… but Could Also Save You

August 3rd, 2025 | 3 min. read

By Brian Paulson

“Commingling” your business and personal finances means they’re not fully separate. Some personal expenses get charged to your business cards, or some business expenses end up on your personal cards.

Your accountant needs to fix this, and you can expect to pay extra for the extra work. This can uncover some benefits and prevent some issues, though. Let’s talk about them!

At CSI Accounting & Payroll, we’ve provided monthly accounting to small businesses for nearly 60 years. That means we’ve seen thousands of commingled accounts and answered these questions quite a bit:

  • How often do small business owners commingle funds? What happens if I do this while I work with CSI?
  • Why does an accountant charge more if I’m commingling funds?
  • What are the benefits of monitoring and cleaning up my accounts with commingled funds? Is it worth it?

Is Commingling Finances Rare or Common?

How often do we see business expenses on personal cards? Sometimes. If one of our existing clients does this, they need to send us a copy of their personal statement and let us know which charges are for their business.

What about personal expenses on business cards? All the time. When our clients have their business pay for personal things, they’re supposed to put a distribution into their personal account, then use that to make the purchase. But if the purchase has already been made, they just need to tell us so we can code it into the distribution category.

Why Accountants Charge for Commingling

While onboarding with a monthly accounting service, your accountant will gather the information they need to establish your monthly fee. However, it’s not apparent at first that you’re commingling if you haven’t told your accountant. This is usually an accident and a result of disorganization.

So, if your fee is already established and commingling is discovered, your accountant will need to raise your fee to monitor the extra accounting activity and handle the extra complexity. (See what we consider to be “complexities”.)

At CSI, this happens occasionally, but we also offer clients the chance to remove additional unused or rarely used accounts to avoid a fee increase. Many new clients take us up on this offer.

Benefits of Monitoring & Fixing Commingled Accounts

So, what are the benefits of having your accountant monitor accounts that commingle funds? They include:

  • Retained corporate veil protection. If you’re an S-Corp or C-Corp, you avoid piercing the corporate veil that offers protection from personal liability.
  • Tax deductions. While uncommon, if we find legitimate business expenses in your personal accounts, it could uncover otherwise missed tax deductions.
  • Avoided audits, penalties, and interest. Commingling is highly frowned upon by the IRS and may be seen as intentionally “cheating” on your taxes.
  • The ability to sell your business for what it’s worth. If you commingle a lot, your business will never show a profit on paper, so a buyer would have to take you at your word that it’s worth more. (Easier said than done!)

Fix Your Commingled Funds!

… and reap the benefits! Now that you know how often small business owners commingle, what happens when CSI clients do it, why you would be charged more for this, and the benefits of fixing it, are you ready to check out monthly accounting services?

If so, please consider CSI Accounting & Payroll! To see if we can be a good fit for your business, click the button below for a free consultation:

Not ready to talk? That’s okay! First, get your custom estimate with our price calculator:

Brian Paulson

Brian is the owner of CSI Accounting & Payroll. After earning a double major in Accounting and Financial Management from the University of North Dakota, he joined CSI in 1996 and purchased it in 2002. With decades of experience, Brian now focuses on education: contributing to professional associations and business books, actively participating in continued learning for his team, and, of course, sharing transparent insights on CSI’s website.