Business credit cards are versatile and useful for businesses. Keeping track of what you spend is essential to a business, but for many small businesses keeping track of expenses can become a stressful task. A business credit card can help you keep track of all the expenditures in one place.
However, careless use of credit cards can leave a business in debt. If used effectively, a business credit card can simplify the process of your financial record keeping and can also help you earn a little extra money.
Using a business credit card rather than a personal card can help you keep track of expenses made by the company, keeping business and personal expenses separate. Most card issuers will provide you with a detailed report that categorizes your business expenses. This can be very useful for accounting and tax purposes. Just like a personal card, business credit cards also come with various reward programs. This article discusses some of the ways a business credit card can help you.
Separation of Business and Personal Finances
Almost every business owner knows that it is important to keep personal and business finances separate from one another. One way to do this is to use a business credit card for business-related expenses only. When you receive the statement, you will know every transaction that was associated with your business and you can avoid having to review the statement thoroughly to distinguish the personal and business expenses.
Keeping Track of Employee Spending
Some businesses have employees who pay bills or make purchases on the behalf of the business. Approving every transaction made by an employee can be time-consuming and frustrating, especially if a purchase needs to be made quickly and you are not available. One of the ways to keep track of employee spending is to issue employees a credit card that will be directly linked to your business account. That way, when you receive monthly statements the employees’ transactions will be itemized according to the employee who made the purchases. If any of the employees abuse the credit card, you will know immediately.
Reduction in Time for Balancing Checkbooks
Once you get into the habit of using your business credit card to pay business expenses every month, you will be able to reduce the time consumed in balancing your checkbook. Instead of writing up the transactions for each month in your checkbook register, you will only have to write one check to the credit card company to pay all the expenses. This makes it faster to balance your checkbook and reduces the margin of error. If you get into the habit of paying your credit card bill in full you can also avoid paying the interest on the purchases.
Useful Financial Statements
Several credit card companies offer a range of reports. Other than the monthly reports, you can also get quarterly and annual reports to classify your spending. With the help of these reports, calculating spending can be much easier. Some credit card companies also allow you to generate custom reports.
Other than making your financial record keeping easy, business credit cards also help you get rewards faster. Choose a business credit card that gives you rewards that will be useful for you, like airline miles, car rental discount or free trips, cash back or discounts on supplies, etc.
Using a business credit card increases your business’ productivity since it helps you save time that would otherwise be spent on financial record keeping. For small businesses, having a dedicated business credit card may eliminate the need for a bookkeeper as well.
Bookkeeping and keeping track of your expenses can be a very daunting task. But with the help of a business credit card you can easily overcome these obstacles. The time you used to waste on keeping track of the expenses can easily be avoided with the help of a business credit card.