Having a business credit card was once a luxury reserved for a select few in the corporate world – these days, it’s an absolute necessity for all business owners, large or small.
There’s no doubt that you, as a business owner, already know how the economic climate has changed over the past decade, and you also know the importance of doing business online, traveling for business, and tracking everyday expenses. But have you ever thought about how much easier it is to do these things with a business credit card? That’s right, using a business credit card can make tracking expenses, buying materials, equipment, and tools online, and it can even provide that little bit of extra funding that you may need from time to time!
Here are some of the best reasons for business credit cards:
Business Credit Scoring: Just like you have a personal credit score, your business also has a credit score that should be established and maintained. Not only does this provide your business with a good payment history, available credit, and length of credit, but it can also make it much easier when you need credit from suppliers, or if you ever need to get a business loan for any reason.
Cash Flow: In business, we normally have to purchase any services and materials up front, then wait for the customer to pay once the work is done. This can sometimes cause a cash flow problem that is easily solved by using your business credit card to purchase the materials you need to do the work, then paying it off once you receive payment for the work. (There are even business credit cards that specifically offer up to 60 days with no interest on these types of purchases.)
Employee Spending: If you’ve got employees that are out and about doing anything at all for work, then you’ve got some type of employee spending. Whether it’s running to a supplier and picking up materials that must be paid for at the time of purchase, or whether it’s work related travel (hotel rooms, air fare, meals, etc.), it’s far easier to track employee purchases if your employees carry a business credit card. (Not to mention, it’s far easier for the employee to use the card and turn in the receipt, than it is for them to have to turn in an expense report and wait for reimbursement.)
Separate Personal Spending: One of the biggest mistakes that we see in the business world today is the owner who is still using his or her personal credit cards for business purposes. Not only does this present a less than professional appearance when used to pay for business expenses, but it can make it really tricky at tax time to separate personal expenses from business expenses when you’re using the same credit cards for both.
Don’t sell your business short – start early and build the credit you need to keep your business growing!