Credit cards are not just personal financial tools. Instead, they can also be used for businesses. In reality, business credit cards are perhaps one of the top tools you need to have for your business. There are tons of companies that offer business credit cards, but the ones we recommend most are Chase through their Chase Ink Business platform. If you’re interested in getting one for your business operations, do check out their website right now because they have a Chase Ink sign-up bonus on offer. In this article, we will talk about how business credit cards can help you manage your business better.
Discrete financial management
One of the fundamental concepts in business is that owners should be able to treat their businesses as separate and individual entities. In the context of financial resources, the business should be able to have its own set of resources and incur debits and credits to its name. This entails having to create a clear distinction between the affairs of the owners as well as the affairs of the business. Having a business credit card help achieve this goal. Through a business credit card, owners are able to make business purchases without having to touch their personal debit or credit. This makes it a lot easier for monitoring and calculating business expenses, as well as making the process of generating reports a lot simpler and much faster.
Convenience of transactions
As we all know, the expenses of businesses are going to be considerably higher as compared to our personal expenses. This may be due to the sheer amount of items being purchased, the complexity of the machinery being acquired, or the fees and charges that the business will have to pay. Nevertheless, it’s good to have a business credit card with you just so you won’t have to bring lots of cash whenever you’re buying or paying for things. Furthermore, as we move towards a cashless economy where digital transactions become much more frequent, credit cards are going to be much more relevant.
True to all types of business is the idea that cash is the most important resource. No matter if you’re a big corporation or a small store, it’s always important to have a cash reserve. Business credit cards help with preserving this cash reserve because they allow you to buy and pay for goods and services without having to dish out actual cash. In the end, this could lead to better cash-flow management where you will always have a healthy amount of cash on hand, all the while being able to purchase the necessary items and equipment to keep your business up and running.
Expenses are organized and categorized.
One of the most useful features of a business credit card is that all the transactions are duly recorded. On top of that, they are organized and categorized into appropriate categories. This is a game changer when it comes to generating reports and identifying key expense areas. Basically, you would no longer have to go through tons and tons of receipts and paperwork and manually input everything into your accounting system. Instead, you can just view your record or statement from the credit card company or bank and see all the relevant amounts automatically.
More accessible as compared to loans
Loans are one of the primary ways that businesses raise funds. However, loans are much more strict, and the interest rates for repayment are very steep. One alternative to loans when raising funds is business credit cards. It works in pretty much the same way in that you are granted the ability to pay for things without using your own cash and with the promise to pay the money owed at a later date. The only difference is that a business credit card is much easier to apply for, and the interest rates involved are generally much lower. This makes them a great tool if you need to pay for goods or services in a pinch.