I know your wallet is already busting at the seams with personal debit cards, personal credit cards, insurance cards for you and everyone in your family, as well as doctor appointment reminders and sandwich punch cards. Having a another card for your business credit card does add to the pile, however, it is a smart thing to have!
You can be a company that generates over one million in revenue or you can sell homemade kambucha at the farmer’s market, both need a separate business credit card. Why? The short answers is…it’s just cleaner but… there are many other reasons and it’s simple to do!
For tax preparation purposes, having a separate account is easier for your preparer which makes it cheaper for you! Once they know you use your business card for personal purposes and vice versa, they have to be more careful about how to record transactions which means more questions coming your way! Having a completely separate business card with only business expenses ensures a more accurate picture of ‘business expenses’.
Legally, you probably set up your business to be a separate entity. If you mingle your finances, a court could potentially go after the owner who has co-mingled funds. The business entity and the person look more like one.
Flight miles and other goodies can be accrued with business purchases. Need a new piece of furniture, equipment, or costly software/IT? Put it on the business credit card and accumulate some points that can be put back into the business.
Seamless connection to your accounting software. This one is my favorite! Connect your credit card transactions to your Quickbooks file. The software (online and desktop) can download or connect transactions to eliminate manually entering them, then you can streamline recording each transaction. Just make sure when you select a card that it has this capability.
With all the business credit cards out there you are sure to find one to suit your needs. It may take a little more observation to pull the correct card out of your wallet but it’s worth it!
As always, contact me if you have questions.
Jordan Ilderton, CPA