The Journal Blog has a great guest post this week, “How to select and use small business credit cards” by Robert C. Seiwert, Sr. VP of the American Bankers Association. I encourage you to read the full post, but here are my favorite points:
Don’t mix personal expenses with business expenses. Speaking as a bookkeeper, I don’t want to know how much you spent at Victoria’s Secret or QVC this month. If I’m keeping your business books, then the only thing I should see on that credit card statement is business expenses. Why? It keeps things clean and simple. Business expenses go on the business card and personal expenses go on the personal card … period. More importantly, if you don’t like your bookkeeper or tax preparer weeding through all those charges trying to pick out the business expenses from the personal ones, imagine how you’ll feel when the IRS auditor is weeding through them!
Pay your credit card bill on time. This sounds so simple, and it really is if you just develop a system and stick to it. Paying your card on time will improve your credit rating, eliminate late fees and penalties, and just make your life easier. Most credit card companies are happy to send you an email when your payment is due if you just sign up for it. Most credit card companies will also let you schedule payments in advance. My advice? When you get that statement, immediately schedule a payment for the minimum amount on due date. If you can make a larger payment later, great! If not, you’ll at least get that minimum payment in and avoid all the nasty late fees.
Develop some good habits with your business credit card and the credit card companies will reward you with a better credit rating. You’ll enjoy lower fees and less stress. It’s a win-win!
Deb Howard Greenleaf, EA, CEO and Principal, of Greenleaf Accounting Services provides virtual accounting and bookkeeping services and specializes in financial management to consultants, coaches, solo professionals, and other small business owners across the US. Deb is an Enrolled Agent (EA)—an IRS-licensed tax professional—and specializes in small businesses and entrepreneurs filing Schedule C or as an LLC. As an Advanced Certified QuickBooks ProAdvisor, Deb spends her day in QuickBooks Online and specializes in providing QBO support.
