Business credit card expenses can easily overwhelm a small business' finances. It is imperative for any business owner to keep tabs on the expenses and payments put on the credit card. To keep an eye on your credit card and personal finances, the following tips may be helpful.
Keep It Separate
Using the business credit card only for business expenses will make taxes and other reports easier. However, funds on a business credit card should only be used for business expenses. Co-mingling personal funds with your business card makes accounting, taxes and keeping an eye on business credit card expenses much more difficult. Therefore, do your best to keep your business credit card separate from your personal funds.
Use Accounting Software
Accounting software can help you quickly review the use of your business credit card. By downloading transactions from the credit company's website, you can see how the credit card is being used, the payments you have made on the balance, and whether there has been any misuse of the card. Typically, such software will generate charts of where you are using the credit card funds with the click of a button. This will enable you to see where you are spending too much money, or where you need to invest more funds. Also, sometimes these programs can predict the amount of payments over time by using your current interest rate. Accounting software can make your life vastly easier and enable you to keep tabs on the credit card's use easily and quickly.
Avoid Easy Access
One of the biggest mistakes made with business credit cards is keeping them within easy access. If you do not anticipate needing your credit card during your outing, do not carry it with you on a daily basis. Carrying the card on your person with your other personal credit cards may be too tempting and you may overspend. Also, making your card not easily accessible will require you to seriously analyze your intended expenses to make sure they are essential and worthwhile to put on a card.
Don't Create Authorized Users
While having multiple cards with authorized users might make it easy for employees to obtain supplies for the business, it also opens up the possibility for fraudulent use. Seriously consider whether it is in the businesses' best interest to have authorized users for the credit card linked to its finances. Additionally, if the credit card is linked to the company's bank account, do not create authorized users or allow employees to access those funds. Instead, require that all expenses be submitted prior to their actual incurrence and provide cash for the estimated amount.
Keep an Eye on Taxes
A small business owner may have a surprising amount of business taxes at the end of the year. Always keep an eye to whether something is deductible on your taxes and keep receipts for those items you anticipate deducting. Again, accounting software may be able to help you organize and retain records of deductible amounts for which your credit card was used.