One Difference Between Personal And Business Credit Cards Is The Operation Of Purchase Tracking

Category: Finance, Credit.

If you own a small business, you might just have significant monthly expenses that are required in its operation.

For those reasons, a business credit card or a small business credit card can come in handy, given the benefits offered for business owners in particular. But in many cases you may not yet have sufficient cash on hand to pay for those expenses. It is a temptation indeed to spend more than one should with a credit card. If you have the financial insight to manage your money as a business owner, business credit cards could give you the flexibility you need to manage day to day expenses. This lack of control, is the primary, however source of the profits in the credit card industry. Business credit cards used with care could be just the thing you need to help you manage your growing business. Your purchases are tracked under your company name, and so the, not your name marketing offers that you receive for your business would be based on what you have purchased with your business credit cards, not your personal cards.

One difference between personal and business credit cards is the operation of purchase tracking. A benefit of this tracking would be that your company would have a business history which may prove to be a great asset. Your business credit card statement should come with a detailed list of transactions, broken down by type of expense. Another difference is the way expenses are tracked. When you are arranging your monthly budgeting, or your yearly or quarterly financial projections for tax payments, these statements would come in handy when figuring out which expenses should be charged to which accounts, and which expenses are tax- deductible. Almost 75% of business experts surveyed have asserted that business credit cards and small business credit cards prove to be an easier way to manage expenses than a checking account. This will be of significant use when you are managing your money, because you can trace individual transactions, and assign them to various parts of your budget.

Checking accounts require the manual recording of transactions, and when people make mistakes or even forget to record those transactions, unpleasant surprises can turn up in the form of overdrafts. Business credit card accounts also have some fringe benefits that personal credit cards do not always have. Your monthly statement will include every expense in detail. Your account should include extra cards, for additional, if necessary( trusted) employees, and it may even include travel insurance, both for travel cancellations, and even for accidents that happen to your employees( or to you! ) while on business travel. If you are the primary decision maker, you often have several crucial decisions to make at once, and you are often involved in many elements of your business at one time. These extra cards will really come in handy once your business starts to grow.

If you have purchases that are routine, having other employees who are authorized to make those purchases will free up a lot of your spare time. As we progress into the information age, these detailed statements are now available online for your use in the comfort of your own office or home. Since your business credit card would come with detailed expense tracking, you would feel the comfort of delegating these sorts of purchase decisions to others, leaving you more time to focus on growing your business. Using the right accounting software, you could merge your online statements with your existing account files to automatically match expenses with budgeted accounts. All you need to do is monitor the online merge process periodically. Why pay an accountant to sit and match those expenses up when you can use a software package would do the same job at half the time and cost probably a lot less than the salary of an accountant?

And so we see how simple it can be for any small business to streamline its financial operations overnight. Why not let the credit card company cover the overhead associated with tracking and sorting financial expenses? A small business credit card could end up being not just a source of financial flexibility, but also a surrogate accountant. When you figure in the other benefits of a business credit card, such as bonus frequent flyer miles for airlines, or from rewards that come with cash rebates for purchases, the advantages of business credit cards begin to standout substantially. The key is to remember to pay your balance and your fees in a timely manner, so that your credit rating as a business remains strong. These benefits are available to any small business owner.

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