Keeping Your Business Afloat During Marriage Dissolution

business man and wife with a divorce lawyer
  • Communication is vital to keeping the business separate from the divorce and communicating with your spouse.
  • Seek legal advice to ensure the business is protected and both parties know applicable laws.
  • Maintaining good financial records is essential to developing a systematic approach and keeping accurate records.
  • Regularly review and reconcile accounts to catch any discrepancies.
  • Use financial statements to make informed business decisions.

When you start a business, you likely expect it to be successful and run smoothly for years. However, life doesn’t always go according to plan, and if you’re going through a marriage dissolution, it can be challenging to keep your business afloat.

Divorce can disrupt any business, whether large or small, if proper measures aren’t taken. This article will explore strategies and tips to keep your business running during a divorce.

Communicate with your spouse.

Communication is vital to any situation, and it’s crucial during a divorce. You and your spouse must keep the business separate from your divorce. Keep the communication lines open, clear, and transparent so that both parties know what’s happening in the industry. Be upfront and discuss how the company will be run while you go through the divorce process.

In addition to communicating with your spouse, you should also reach out to trusted advisers and professionals who can help you navigate the business decisions during this time.

Seek legal advice

man signing a document explained by lawyer

Getting advice from an attorney experienced in handling business issues during a divorce is essential. If your business has been established during the marriage, it may be subject to division. An attorney can counsel you on the legal implications and help protect the company. The attorney can also advise the terms of the partnership dissolve, when applicable.

If you do not have an attorney yet, you might want to visit to understand how a reputable lawyer can help you and what to expect during the process. They can also provide advice on how to best protect your interests and assets.

Maintain good financial records

Business finances are critical during this time. Maintaining good financial records and knowing where you stand financially helps determine which assets are divisible. But how will you keep good records of your finances? Here are some tips:

1. Develop a Systematic Approach

The first step to maintaining good financial records is to develop a systematic approach. This means putting in place a process or a system that allows you to track every financial transaction. This can be as simple as keeping a record of all receipts and invoices or as complex as a fully automated system that categorizes expenses and revenue.

One easy way to keep track of your financial transactions is to use accounting software such as QuickBooks or FreshBooks. This software can help you keep track of expenses, revenue, and taxes. They can also generate financial reports that give you an overview of your business’s financial health.

2. Keep Accurate Records

The key to maintaining good financial records is keeping accurate records. This means keeping your receipts, invoices, bank statements, and every other financial document organized and up-to-date. It’s essential to take the time to properly categorize expenses and revenue, so you can easily track how much money is coming in and going out of your business.

It’s also essential to keep your personal and business finances separate. This means setting up a separate bank account and credit card for your business. Mixing personal and business finances can make it challenging to keep track of your expenses, which can cause problems down the line.

3. Review and Reconcile Regularly

reviewing business finances concept

One of the most critical steps to maintaining good financial records is to review and reconcile your accounts regularly. This means checking your bank statements, credit card statements, and accounting software to ensure that everything is accurate and up-to-date. 

It’s also a good idea to reconcile your accounts at least once a month to catch any discrepancies or errors early on. This can help you avoid financial problems and keep your business running smoothly.

4. Use Financial Statements to Make Decisions

One of the biggest benefits of maintaining good financial records is using financial statements to make informed business decisions. Financial information such as the balance sheet, income statement, and cash flow statement can provide valuable insights into your business’s financial health and performance.

For example, if you see that your expenses are higher than usual, you can start to look for ways to reduce costs. If your revenue is increasing, you can begin to plan for expansion or hire additional employees.

The Bottom Line

Divorce can be an emotional and disruptive time for individuals, households, and, as we have seen, businesses. Remember, reaching out to support such as a therapist, friends, and family can help you get through the emotional side of divorce. When you have the support of friends and staff, you will get through this process.

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