13.5.10

Using Business Credit Cards For Business Expenses

Regardless of the type of business you own or how long you have been in operations, getting a real credit card for business is a must. True, you cannot finance an entire business using only business credit cards, but they can be wonderful back-up to cover for monthly expenses or unexpected needs, particularly when cash flow is tight. Today, lets discuss how entrepreneurs can use business credit cards to their benefit. Using Credit Cards for Business Expenses Some entrepreneurs may insist that there is no need to apply for a business credit card since they can also use their personal credit cards to pay for business expenses. Indeed, you can use your personal credit card for any purpose you want, but business owners are completely discouraged from mixing personal and business finances. As your company grows and expenses increase, it will be very difficult to make financial decisions if your personal and business accounts are merged. On the contrary, having a separate business account can help the business owner keep track of his/her companys budget and avoid unnecessary spending. In fact, a business credit card holder can use credit card statements and annual account summary reports as accurate references when performing accounting tasks or when filing business taxes. Business credit cards are also the best tools in building corporate credit history. As you use your business credit card to pay for your companys expenses and pay off balances on time, you are building up your Paydex Score at the same time. Just be sure to choose a credit card company that offers credit reporting to the business credit bureau such as Dun & Bradstreet and Experian Business. Hence, in case you may need to apply for a business loan, getting approved can be much less complicated. And since its easier to apply for a business credit card than a business loan, new entrepreneurs can establish credit history using a business credit card to increase chances of getting a loan approval. After a year or two of consistent payments, you will surely be able to present an impressive business credit history to potential lenders. Employees and Supplementary Cards Supplementary credit cards are credit cards that are linked to the primary business credit cardholders account. These cards can distributed to selected employees so they can simply charge small business expenses without having to go through the long process of requesting for cash and waiting for the funds to be released. All purchases made using the supplementary or employee credit card will be reflected to the business credit card owners account. This way, employee spending can be closely monitored and unofficial transactions can be avoided. Smart Management of Your Business Credit Card Account As a personal credit cardholder, you may probably well know that timely payment is crucial. In the same way, business credit card balances should be paid on time as well. Keep in mind that in order to build and maintain a good business credit history, you need to make sure that all your accounts are free from late payments or negative remarks. Article Source: http://www.articlesnatch.com

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