Management of business credit lines:
Once you get a credit card for your business, the best thing to do is avoid using it except for emergencies. Credit cards for business should be used with great responsibility. When you do use the company card, pay the balance in full and right away. The other consideration should be that usage will increase revenues. Cash flow should be managed, and proper records should be created. Using cash advances or company credit cards should be the last resort.
Don’t mix personal and business expenses:
The toughest thing to manage by a business credit card holder is to mix personal and business expenses. Mistakes can happen if you mix both expenses, the business payments may be missed; business purchases may exceed the limit of credit cards. This mismanagement may ruin your personal credit scores as well as decrease your business card rating. When you use business credit cards with responsibility, your rating is improved, and you can get more credit. IRS and creditors expect that you use the credit card of the business to pay for business expenses if you are serious about your business.
Keep yourself updated by checking email regularly
The CARD Act in 2009 is basically for consumers and has less impact on the business credit cardholders. The creditors are often changing the policies and updating the credit card holders via emails. So keep checking your emails to update yourself on these changes.
Creditor’s new policies may compel you to switch to your business credit cards because it is going to affect your business adversely. There may be fees that you don’t want to pay. “There are many nuances to small business credit cards,” says Molly Brogan, a spokeswoman for the National Small Business Association, the oldest and largest non-partisan citizen advocacy group representing over 150,000 small businesses. “You need first to understand what protections your card does offer as a small business, and then you’ll understand more clearly what it doesn’t.”
Regular monthly reports:
Monthly financial statements are critical to know the exact financial status of your business. Monthly financial statements tell the amount of capital and credit you are left with. You remain updated by reviewing financial statements often and knowing whether you can pay debts or not.
Avail rewards offered by creditors:
You can get maximum benefits from your business credit card by availing the rewards offered by the creditors. Creditors often suggest rewards according to the specifications of your business and interests. Keep yourself updated by researching different cards and making comparisons to see what is best for you and your company. Select the card, which gives you maximum rewards and benefits.
Similarly, there is a credit card protection card to protect you against credit card fraud.
Cash flow management:
The best way to increase profit margin is to manage cash flow. Make a business plan and formulate the budget. Analyze the cash flow of the month and ask your creditors to recharge your credit cards in the dates when there is a huge cash flow expected.
This responsible use of a credit card prevents you from many adverse situations. You can make payrolls timely. You don’t need to offer discounts to vendors for quick payments. Good cash flow management increases your credit card ratings.
Avoid taking debts:
Debt is the tiger that can kill your business. Debt decreases your rating, and you may not be able to obtain credit when you need it. Avoid debt and avail it as the last option left. Taking debt just for making new purchases for a well-established business is not a good idea.
Debt can be taken only to increase revenues. For example, if your company is hiring new staff, shifting to another profitable location, or purchasing upgraded equipment, these are situations when you may need to use a business credit card.
Responsible use of business credit cards is a part of business management and makes you credible in front of creditors, customers, and suppliers.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.