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An Accountant’s Secret to Making Your Business Credit Cards Work For You

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Don't be a slave to the credit card companies. Learn how to use your business credit cards to improve your business--from an accountant's perspective.

Credit cards get a bad rap. They are intertwined with massive debt, but that doesn’t have to be the case. Learning how to use business credit cards can help you move your business forward.

We don’t recommend getting into credit card debt. That is not going to make your business credit card work for you. Instead, we recommend using business credit cards to make purchases that you know you can afford.

The only way to effectively use business credit cards is to pay them off, in full, each month. If you can’t do that, then you can’t make credit cards work in your favor and you’ll be a slave to the credit card company.

If you can pay off your credit cards each month, then you can take advantage of these benefits.

Build Credit with Your Business Credit Cards

The most important thing you can do with your credit cards is to build credit. A lot of people want to pay cash to avoid going into debt, but when you own a business that’s just not possible. Your business must have established credit.

One of the best reasons to build credit through business credit cards is so that you can make future purchases. Business who don’t have any credit have higher loan rates, if they can even qualify for a loan. However, if your business has a solid credit history you will be able to get loans to grow your business.

Earn Rewards from Your Cards

Who doesn’t love earning rewards? Earning rewards from your business credit cards is like getting free money (or travel, or whatever reward your card offers.)

The key to this “free money” is to pay those credit cards off in full! Like we discussed before, this is the only way to get the most out of your cards.

When you’re choosing business credit cards look at all the different rewards options and choose which will benefit you and your business the most. If you travel a lot, then choose a card with reward miles; then you can save money on flights, and maybe even get in-flight perks! If travel isn’t a big deal for you, cash back rewards are always great. You can use your rewards in countless ways.

Track Your Business Expenses

First and foremost, we want to emphasize that you need a business credit card. You shouldn’t be using a personal credit card for business purchases. This causes a lot of headache when it comes time to reconcile accounts. As bookkeepers, we beg you to separate your personal and business expenses!

Second, credit card statements are a great way to keep track of your business’ expenses. The Internal Revenue Service (IRS) allows you to use credit card statements as proof of purchase, so if you lose a receipt but have a credit card statement, you can still prove that you made a business purchase. Most credit card companies keep records of purchases for years. If you have an online account, you can access those anytime.

Monitor Business Finances

As long as we’re talking about business expenses, we might as well mention monitoring your business’ finances.

Employers can hand out company cards to employees, which has a lot of benefits (like not having to run to the store to pick up a birthday cake yourself.) But, there’s always a risk involved with handing out a card. If you want to make sure your employees aren’t abusing the credit card, you can monitor all the purchases.

Another common scenario, as employees move up in the company they get company cards. Managers need to have access to company money and a credit card is a great way to get them that access. If this is the case in your company, look for business credit cards that allow you to give your employees their own cards free of charge. Some cards will even allow you to set spending limits for each card. This can help you monitor who is keeping to their budgets.

 

Don’t let your business credit cards get the best of you. Learn how to use them and make them work for you!

Don't be a slave to the credit card companies. Learn how to use your business credit cards to improve your business--from an accountant's perspective.

Ben Sutton

Ben Sutton

Ben Sutton is the founder of Mazuma USA, an accounting firm providing tax, bookkeeping and payroll services to small businesses. Since founding Mazuma, Ben has established himself as an expert in the small business world. He’s still driven by that same desire to provide accounting help to all small businesses – from photographers, bloggers and creatives to lawyers, doctors, and dentists, everyone needs affordable accounting help. Ben is a Certified Public Accountant, and a member of the American Institute of Certified Public Accountants. But Ben considers his greatest achievement and credential to be his happy wife and four children.

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