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Fitting a Business Credit Card Into Your World

At Moolah we talk a lot about the positive aspects of accepting credit cards and other forms of digital payment. Moolah offers the ideal solution for credit card processing for small business, but what about the benefits of utilizing a credit card to pay your business expenses? A business credit card carries with it some valuable perks and can help your business run more smoothly. Accounting with multiple accounts doesn’t need to cause you headaches when you use cloud-based accounting software, along with the centralized processing power of an integrated payment solution like the Poynt smart terminal.

Separate Business and Personal Expenses

For tax purposes, it’s wise to clearly delineate your business expenses and your personal expenses. Legitimate business expenses are tax-deductible. Allocating charges to a specified business credit card will make it easier to track and document deductible expenses. It is one of the easiest ways to ensure that you do not pay more than your fair share of taxes.

Additionally, if you incorporated your business or formed an LLC, the business becomes its own legal entity. Intermingling finances may jeopardize the distinct legal protection offered by that business structure.

Develop a Credit History for your Business

For the typical small business, loans can be challenging to acquire, but they may be absolutely necessary to survive periods of limited cash flow or to finance expansion. According to the Federal Reserve System, 43% of firms sought external financing in 2018. Utilizing a credit card generates a credit history for your business. Establishing and maintaining a positive credit record will make it easier for your business to obtain loans at reasonable rates in the future.

A Separate Business Card Provides Increased Access to Credit

Intermingling business and personal expenses on your personal card mean less overall credit available for either domain of your life. By segregating expenses between dedicated credit cards, you increase your effective credit limit for both personal and business purposes.

Earn Rewards

Chances are you may rack up some significant charges on your business account. Choosing a credit card with easily accessible rewards may earn you significant travel points or cashback. Maybe you have enjoyed a free flight or two from your personal credit card use; just imagine the rewards that thousands of dollars of regular business charges might generate.

Exercise Control Over Employee Spending

Unlike checking accounts, business credit cards allow you to set employee spending limits, ensuring that you maintain financial control of your business. Additionally, automated alerts can be set to notify you immediately of any charges. This makes it easy to delegate responsibilities to employees while staying in the know.

It’s good to beware: for companies where ownership is shared amongst multiple individuals, company credit card charges made by owners are a common source of discord. Be sure to clearly delineate what constitutes an acceptable business charge, and consult your tax professional to make sure everyone is in agreement. Is it permissible to take a client out to lunch? Can a partner charge gas to the company card? These potential scenarios need to be addressed upfront.

Nevertheless, for the average small business, a company credit card remains a valuable tool. For accounting, the ease and simplicity of cloud-based accounting, especially when it’s integrated with your Poynt Smart Terminal, makes it even easier to stay on top of expenses, while enjoying the best credit card processing for your small business.