Does Your Business Need a Credit Card?

It's almost a no-brainer to have a credit card reserved just for business use, especially if you own a small business. First, let us examine how a business credit card differs from a personal card.

A business credit card is not owned by an individual, but by a business. In this way, it resembles a business bank account. Otherwise, business and personal credit cards work very similarly. However, there are a few differences -- in credit limits, annual percentage rates, and a few other benefits not available to personal credit card users.

Already, the benefits of credit cards for your business are becoming apparent. But this is just gravy. The best reason to have a credit card for your business is because it simplifies your accounting. If you do your own business accounting, you may spend as much as half your working time on it. Remember, this is a non-billable time! Anything that reduces the time spent bookkeeping is a good thing!

Generating a record of your business purchases is easy. There are two simple rules:

- Make all business purchases with your business credit card.

- Do not make any personal purchases with your business credit card.

This way you have every business purchase on one record even before you open your bookkeeping software or ledger. The only potential problem with this is that you need to be sure that you actually can use your business credit card for all, or most, of your business purchases.

Many credit card companies who do will small businesses are fully aware that many of their customers use their credit card statements as the basis of their bookkeeping, and actually arrange them accordingly. Some of them even make their bills downloadable and exportable to bookkeeping software. Not only that, but the expenses are grouped into categories that will fit nicely into your bookkeeping system. This saves even more time -- you don't have to copy anything. Just think -- a few hours spent setting up a simple accounting software will save you hundreds of hours of copying and data entry over the years! (If accompanies downloadable bill format is not compatible with your software, you might higher a programmer to write a program that will convert your credit card bills into a compatible format. It can be surprisingly inexpensive, because the program is likely to be fairly small. And anything that saves you time is just another way to save money -- by making room for more billable time!)