Paying Bills with a Credit Card Offers Advantages for Your Business


What might not be as well known to business owners is that a business credit card can be a valuable financial management tool that can help you not only make purchases more easily, but also manage cash flow and expenses.It’s no secret that a business credit card is a convenient way to make business purchases, both in person and on the Internet. What might not be as well known to business owners is that a business credit card can be a valuable financial management tool that can help you not only make purchases more easily, but also manage cash flow and expenses.

The advantages of paying bills with your credit card

Today, an increasing number of business owners are using their business credit cards to make all their bill payments. Here are some of the reasons why.

  • Easy expense tracking.As a business owner, you know how important it is to stay on top of your expenses. That’s especially important at tax time, when you must organize expenses by category. When you use your business credit card to pay all your bills, you’ll be able to get detailed information on your expenses, making expense tracking easy. Many business credit cards offer statements that group purchases by category, saving you valuable time and allowing you to identify spending trends.
  • Ability to delegate purchasing/bill paying.Most business credit cards give you the option to request additional accounts for your employees and set controls, such as spending limits.
  • Improved cash flow.Because credit cards are revolving lines of credit, they can provide working capital, helping you sustain operations during periods of low revenues and stagnant cash flow. This benefit has proven ideal for businesses with seasonal cash flows. If you don’t have operating cash to purchase goods or services at a particular time, you can use your business credit card to get the money you need.
  • Way to establish a credit rating. Another advantage of paying all your bills with a business credit card is that it can help establish and/or maintain a good business credit rating. This will make it easier to secure business financing later, as the business grows.
  • Convenience/ease. If you have recurring business bills, such as your rent, mortgage, or utility payments, you can have the payments made automatically, saving you the time and expense of check writing and postage.
  • Purchase protection. Many credit cards offer purchase protection, which protects you from loss or damage on items you buy.
  • Many credit cards offer rewards programs that allow you to earn cash back or valuable benefits and savings on travel, business equipment, and other services. The more you use the card, the greater the number of points you’ll earn. Competition in the credit card industry has resulted in cards that offer significant rewards and savings to businesses.

Know the dangers, too.

Of course, there are potential drawbacks to using credit cards to pay your bills, including interest and fee costs. Be sure to try and pay your balances off, and shop around for the best rates and fees. Additionally, because credit cards make purchasing so easy and convenient, it can be easy to spend more than you can comfortably handle. Prevent this by actively managing the lender-imposed credit limit on your card or cards, establishing a spending limit for yourself, and enforcing individual transaction and overall spending limits on employee card purchases.

 

Shop around for the best deals.

Again, there is no shortage of cards offering great programs designed exclusively for small businesses. Be sure to shop around to find the credit card program that offers low fees and rates, and the rewards that best fit the needs of your business.

 

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