Small business owners, even those who have set up a separate bank account for their business, often prevent a corporate credit card, choosing to use their personal card for commercial transactions. The arguments to do not want to abandon the expense rewards offered by personal cards not to see the advantage in a business card because they must be personally guaranteed by the owner of the company.
It is true that small businesses are generally not qualified for credit cards that are not personally guaranteed by the business owner. It is unlikely that the issuing bank is entitled to financial protection in a case where a small business fails. As a result, an owner of a small business is just as responsible for their commercial debt than for their personal expenses.
It is also true, now that corporate credit cards are not bound by the same consumer protection laws that govern personal cards (although the expansion of these protections to include small business cards. has been proposed). These 2 facts can make business owners even more suspicious to opt to use a specific card on behalf of the company.
But there are several excellent reasons to use a professional credit card for your small business.
Tracking your business expenses on a personal card may seem simple on the surface; You only need to carry and use a single card and expenses are all there on the affirmation so you can sort, which is intended for businesses and at the end of each billing cycle. But there are disadvantages defined in this practice.
Having a company fees mixed with personal activities, it is very easy to lack commercial purchases on your monthly statement. You should possibly omit certain transactions that should be classified as commercial expenses, which finally affect your tax liability and financial result. In addition, since you follow your personal expenses and your professional expenses, these “transversal” expenses are essentially a double payment point each month – once to ensure that you follow business expenses, then to make sure you Accurately follow your personal cash flow. This practice costs you a valuable duration every month that could be devoted to the growth of your business. With a corporate credit card, your expenses are properly and easily separated and followed for accounting and tax purposes, allowing you to save time.
The purchases of follow-up companies on your personal plastic do nothing to establish a credit on behalf of your business. If you plan to develop your business and look for a loan or line of credit to help you achieve your goals, a corporate credit card is a great way to establish a Registration in progress financial responsibility.
There are a multitude of business credit card options available on financial institutions, including some offering the same types of expense rewards available from a personal account. When choosing a card, choose one with options for your expense habits. And consider your local bank, the same as you keep your bank accounts from your business, as a source. This bank will be an excellent resource when you are ready to develop your business and create business credibility, but a well-managed business credit card will now begin to establish a continuous relationship that will interest you in the future.