Business Credit Cards

Do you need a business credit card? 'Yes' is the answer that almost immediately comes to mind. At least for most businesses (especially small businesses), the benefits are many. Before we look deeper into how business credit cards are helpful, let's try and understand what a business credit card is.

Firstly, a business credit card is a credit card that is owned by a business and not an individual. To better understand this, you can simply draw an analogy between business credit cards and business bank accounts, which are also held in the name of the business. Other than that, business credit cards work in much the same manner as personal credit cards -- with a few exceptions. These exceptions are in the form of flexibility in credit limit, low APRs, and some other additional benefits that are available to business credit cards only.

Thus, business credit cards seem a good proposition. Having said that, business credit cards would be attractive even without those benefits because the main benefit lies elsewhere. The really great benefit from a business credit card is realised in terms of business expense accounting.

For most small business owners, business expense accounting is a big headache and overhead cost. With business credit cards, this is handled very easily! As the owner, you simply have to ensure that you make all your business expenses on your business credit card and let the personal expenses go onto your personal credit card. Segregating business and personal expenses is all you need to do. So the bill for your business credit card will have all the business expenses on it and you don't need to collate all the various bills or sort out the items from your personal credit card bill.

The key principle here is to make sure that you use your business credit card for all your business expenses (or as much as you can). Thankfully, a lot of business credit card suppliers realise this need of small business and even organise the business credit card bills in a way that meets the accounting requirements of these businesses. Often they will appropriately group the expenses on the business credit card bill so as to more easily facilitate business expense accounting.

In fact, some of the business credit card suppliers go to an extent of providing the bills in a format that can be downloaded and then easily imported into an accounting system. That is to say, you won't need to enter the data manually in your accounting system. In case the format is not suitable for your accounting system, you can hire a software professional to write a small quick program to convert it into a suitable format for your needs.

So the various reasons above, plus the main one: 'facilitation of business expense accounting', is enough to suggest you should be getting yourself a small business credit card as soon as possible. Make the next tax year a lot easier!

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