Separating personal and company accounts is essential for business success.

A Sebrae survey shows that small businesses run by individual microentrepreneurs (MEIs) have the highest mortality rate: 29% of them close after 5 years of activity. Among the main factors that contribute to closure are the planning and management of loss-making businesses. According to the survey, 17% say they did not do any planning. The companies that survived were more active in management.

Therefore, Sebrae manager Ênio Pinto explains how essential it is for MEI to separate personal accounts from company accounts to be successful in business.

“Every company today, when it is minimally organized and provides structured cost spreadsheets, allows management decisions to be made to expand sales, diversify sales, change addresses, focus on other customers, depending on the company’s performance. Once you mix your personal life cost items with your company’s cost items, you won’t even be able to make a real profit calculation. So, you cannot have any information to be able to make a decision based on these numbers.”

MBA professor at Fundação Getúlio Vargas (FGV) Karen Mascarenhas points out that many entrepreneurs end up incurring expenses greater than their income and are unable to identify the problem in time to cover the losses.

“A common mistake is to spend more on personal accounts than the company’s net profit, as they forget to take costs into account or expect to be paid for the company’s work in the near future — and end up not planning properly. The lack of clarity in the effective balance between revenues and expenses generates lack of control and inefficiency.”

Individual microentrepreneur Laísla de Araújo has worked as a photographer in the city of Brasília since 2017. During the pandemic, she had the insight to open her own company focused on raising the self-esteem of the female public. Like the vast majority of MEIs, it is responsible for all business management, from marketing to customer service. She tells how she learned to separate personal accounts from company accounts.

“In the beginning, I didn’t separate what was my money and what was the company’s money. It was all mixed up, there was just one bill. But since 2022, I opened a PJ account. I thought it was going to be something super bureaucratic, but it was simpler than I imagined. So, today I defined a value to be my salary, which is the amount I take from the company’s account to pass on to myself — and the rest stays in the company’s account so I can reinvest in the company.”

According to Laísa, when she didn’t separate her personal and legal accounts, she didn’t even know how much she could invest. “I didn’t know exactly how much to set aside to be able to reinvest in the company and how much to set aside to be able to buy my everyday things.”

How to separate the individual from the business

Sebrae manager Ênio Pinto gives practical tips for entrepreneurs to separate the individual from the legal entity:

“It is essential that you have an individual and a legal entity, on different spreadsheets, in different bank accounts, so that you can know whether this business is viable or not. And so that you can make decisions in light of what the numbers are signaling to you”, he advises.

FGV professor Karen Mascarenhas also highlights the separation of accounting. “It is important to keep separate accounts for the company, including revenues and expenses, offering a clear view of revenue and profit each period. Planning costs and investments is also essential, both for the company and for personal activities”.

In addition to financial management, taxation of individuals and legal entities is also different. In the case of MEI, which falls under Simples Nacional, taxation has a fixed amount charged monthly and ensures that the entrepreneur is covered by social security benefits.

The MBA professor at Fundação Getúlio Vargas, Eduardo Maróstica, remembers that individual micro-entrepreneurs need to submit at least two income declarations per year: the Simples Nacional Annual Declaration and the Personal Income Tax Declaration (IRPF). The deadlines for both end on May 31st.

“Obviously you, as an individual, will include in your IR the businesses for which you have a corporate purpose. In this case, if you have a company categorized in Simples Nacional, your Income Tax Declaration will include the gains arising from your company that is in Simples Nacional.”

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D-Day of MEI Week

For individual micro-entrepreneurs who want to improve the management of their businesses, Sebrae promotes, this Wednesday (22) throughout the country, the D-day of MEI Week. On this occasion, system employees take to the streets to assist MEI directly to answer questions and offer training.

In the Federal District, the action will take place at Espaço do Empreendedor, in the square located next to the Feira Central de Ceilândia. The event will be attended by the president of Sebrae, Décio Lima; Minister of Entrepreneurship, Microenterprise and Small Businesses, Márcio França; and the governor of the Federal District, Ibaneis Rocha.

The action is part of the 15th edition of MEI Week which, this year, has the theme “Enough together with Sebrae”. Free of charge, the program continues until May 24th with in-person and online activities, such as lectures, practical workshops, courses, as well as networking and inspiring stories from successful entrepreneurs.

“MEI week is the biggest mobilization promoted by the Sebrae system. Our intention is to further professionalize the management of this small entrepreneur. So there will be a day when we will address issues related to finance; in another the issue of planning; in another the issue of sales, including digital sales. It’s about updating the knowledge he needs to have to be at the forefront of this venture and have a greater chance of success”, explains Ênio Pinto.

The full schedule and other details are available on the page sebrae.com.br/semanadomei.

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