A Business Credit Card can be very helpful, especially for small businesses, for a number of reasons but before we delve deeper into how they can be helpful let’s take a look at what a Business Credit Card entails.
In simple terms a Business Credit Card is a credit card that is owned by a business and not an individual. To understand this further we can simply draw an analogy between the Business Credit Cards and Business Bank Accounts which are in the name of the business as well. Other than the name on the card a Business Credit Card works in pretty much the same way as a personal credit card, with a few exceptions. These exceptions take the form of flexible credit limits, low annual percentage rates and a few other benefits that are only available to Business Credit Cards.
From just looking at those benefits a Business Credit Card can seem like a good proposition, however a Business Credit Card would be an attractive proposition without those features because the main benefit lies elsewhere. The outstanding benefit of a Business Credit Card is realised in terms of business expense accounting. For most small businesses, expense accounting is a big overhead. With a Business Credit Card this is handled very easily, you just have to ensure that all business expenses are paid with the Business Credit Card and any personal expenses are paid with another ‘personal’ card or straight from a personal bank account. This way the bill from the Business Credit Card supplier will have all the business expenses for the month and there is no need to collate all the various bills or sort out the personal expenses from business expenses on the one statement.
A lot of Business Credit Card suppliers realise the needs of businesses and even organize the Business Credit Card bills in a way that meets the accounting requirements of these businesses. Generally they will appropriately group the expenses on the Business Credit Card bill so as to facilitate all business expense accounting. In fact some of the Business Credit Card suppliers go to the extent of providing the bills in a format that can be downloaded and exported to an accounting system to negate the need to enter the information manually. If the format supplied by the credit card provider is not suitable for your accounting system you can easily hire a software professional to write a quick program to convert the information into a suitable format.
As you can see ‘Facilitation of Business Expense Accounting’ is enough of a reason to support the case of Business Credit Cards.