Rapper Tyga has recently been ordered to pay up $16,000 to his accountant for not paying the money back on time. Apparently the rapper and his accountant had agreed that the accountant’s credit card can be used by the rapper for whatever purchases need to be done as long as the payment is done on time.
As it turns out, the rapper failed to make the payment and instead managed to rake up a debt of $13,396 which is the reason behind the accountant suing the rapper.
What stands out is the fact that the rapper though highly capable of making his own purchases, was using his accountant’s card to get the purchases done.
From the very beginning he must’ve been advised to set up a business account. It would’ve helped the rapper in the following ways:
- Take Financial Control
Having business accounts lets the rapper have complete control on the monetary aspects of the business. The accountant needs to maintain records on all the money that is flowing in and out of the business. If this is neglected then there are bound to be problems in the future including legal ones.
A business account would’ve allowed the rapper to spend his own money and hence would’ve prevented the hassle that he got himself into after using someone else’s card.
- Making Necessary Purchase
Most of the celebrities end up making money a lot faster than they learn to handle it. Matters get a lot worse if they set up businesses since they go crazy with the money that they own. However any good accountant would advise his/her client against spending the company’s money on purchases that may not necessarily be needed.
They also should help their client (in this case Tyga) in finding cost effective yet efficient ways to spending as well as saving money. A cash flow system set up early in the business helps in maintaining the records accurately.
- Accountants and Records
Having records of the company that are up to date comes with its own set of benefits. Not only does it let you keep track of your money but also helps working out the taxes in a manner that is simpler as compared to when there is no business account.
Tyga should have though twice before using his accountant’s credit card than using his own company’s money. Here’s hoping that he will at least now have an efficient account system in place for his business.