Small business owners use business credit cards to free up their cash flow and for the accounting benefits that these cards provide. There are a number of ways that they can maximize the rewards that they get out of business credit cards, I have included a few of them below.
Use your credit card to make all your business purchases: To really get the benefit of the accounting feature of business credit cards you should make all your purchases using that one business credit card. At the end of each month you will be able to review all your spending in one place and easily access all your business expenses when tax time rolls around.
Increase your cash flow with interest free days: An important advantage of paying your balance on time is the interest free periods. It’s an unfortunate fact that businesses small and large could run into cash flow problems while they wait for customers to pay their invoices. In the mean time they still need to pay their utilities, employees and purchase equipment and purchase other things that the business needs. With as much as 55 interest free days offered on most business credit cards you can use your balance to keep your business afloat.
Pay off your balance before the end of the grace period: Avoid high interest charges by paying off your balance before the interest free period runs out. If you have a large balance the interest charges could really make a dent in any profits that you earn in the business.
Don’t mix business with pleasure: Your business credit card should never be used to pay for personal purchases. For one it is not professional and it makes accounting more difficult because it then becomes harder to keep track.
Allocate a card to trusted employees: Make accounting a lot easier by issuing a card to trusted employees. This way you won’t have to manage reimbursements for purchases or try to reconcile petty cash. The great thing about business credit cards is that additional users can be added at no extra cost and you can also establish a preset limit on every card that you issue to your employees. All the purchases will be documented on one statement so it will be easy to keep track.
Boost your business credit rating: If your business has no credit at all a business credit card will help you to build a solid history for the business. Use the card responsibly and make all your payments on time and watch your credit grow. Take note that you should ensure that any business credit card provider that you use reports your account activities regularly to the business bureaus. Once you have your business credit established it will be easy to be qualified for future business loans.
Enjoy the reward points: The reward points offered by reward type business credit cards are very worthwhile to small business owners. From airline travel, to concierge services, discounts on business supplies, dining and reservations reward points save business owners a lot of money. Choose a program that offers the best rewards for your needs and check your point allocations regularly to determine when you will be able to redeem them.