Business Credit Cards for Your Business

Many experts say business credit cards are a big help to the owner of a small business or the executive of a big company. You can use business credit cards to organise your expenses and help regulate your cash flow needs. If you check around, you’ll find that there are all sorts of business credit cards that are designed to fill various needs. There are variations in business credit card features, but the fundamental ones would include the following.

Efficiency to Operations

You can arrange with the credit card issuer to assign your staff with their individual credit cards, all linked to your company’s business credit card. Your staff will be allowed to use this credit card only for transactions related to your business.

By prior arrangement with the credit card issuer, you can set predetermined limits for each employee. These control points could be amounts of purchase on per month or per transaction basis or both; you can set limits on the number of transactions per day or per month or per supplier. The system thus makes your control process very simple, and you make your decision only once — at the time you set up your stipulations with the credit card issuer.

For the employee, you empower them to make smaller decisions on purchases needed for your business. Apart from the practical utility of being able to move on their own without having to go to you for a decision every time, there is also the goodwill that is created when they feel reassured that you trust them with your business credit card.

It will also be easy for you to summarise expenditures at the end of the month. The credit card company will furnish you statements of account with the expenses classified according to various categories, on a per employee basis. You can download the electronic files on these expenses which makes it easy for your accountant to prepare your business financial statements for the period. At any time during the month, you can track the usage of each credit card through the online services offered by the credit card issuer.

Savings to the Business

Business credit cards also offer various rewards programmes or cash-back arrangements which can mean substantial savings to your business. You can pick the scheme that will work best for you.

If you and your staff do a lot of travel, you would be more interested in the business credit card that provides good incentives for travel expenses charged to the credit card. These can be rewards points for airline tickets, hotel stays, car rentals and other travel-related expenditures. Note that charges made by your staff on their credit card will earn reward points only for your business credit card.

If you prefer to enjoy the cash-backs, you would look for business credit cards that offer substantial discounts for certain business-related purchases, as office supplies, petrol, courier services, and others. All other purchases made with the business credit card will be given smaller discounts. These may be small amounts individually, but they will all add up to significant totals at the end of the year — savings that any businessman will appreciate.

Back To Financial News September 2007