Being a business owner means a lot of financial transactions. You have to make purchases and reinvest to maintain your financial growth. Now comes the questions, how should you pay for these expenditures? While credit cards are frowned upon in the personal finance space, credit cards can be a business owner's best friend. There are many advantages to using business credit cards within your business. Not convinced? Well here are a few reasons why business credits can be great for your business!
1. Access to Cash Flow and Financial Flexibility
Credit cards can give you more access to cash flow and help keep more cash on hand. While it's important to ensure that your business has enough cash to pay monthly expenses, using your credit card allows you to keep cash in the bank for emergencies.
2. Separation of Personal and Business Expenses
Separating your personal and business expenses is paramount for your business success. If you don't separate these expenses you could miss out on huge tax deductions come tax time. Business credit cards allow you to keep your personal and business expenses separate with ease.
3. Points, Cash-back, or other rewards
Another advantage of having credit cards is that you can gain points in every transaction you made. When these points are high enough, you can use them for purchasing or redeeming some rewards instead of the money itself. Some business owners fund their personal vacations with these business points. Can you imagine traveling the world for free just for running your business?!
4. Establish Business Credit
Did you know your business has a credit score? Yep, that right. Your business has a credit score that is completely separate from yours. It's called a Duns and Bradley score. This score helps creditors decide whether they should extend credit to your business or not. Having a business credit card and paying it off properly helps increase your Duns and Bradley score and with a high enough score your business can receive ton's of funding when it's time to expand.
5. Reduce Employee Reimbursement Costs and Delegate Tasks
As your business grows, you will most likely have to start taking on employees. And depending on your industry, you may have to reimburse your employees for expenses they pay on the businesses behalf. An easier way would be to extend your employees business credit cards, allowing them to make purchases on the business behalf. This not only makes your job easier; it makes your employees feel more empowered.
All in all, having a business credit card can help your business in numerous ways. So the next time you're at your local bank, ask about their business credit card options. Your next vacation may depend on it!