Business Credit Cards


 

 

Use Business Credit Cards to Manage Cash Flow

One of the most deadly situations for any small business is running out of cash during a period of rapid growth. Whether just starting a brand new business or growing an existing one, cash is king and credit can help you continue to stay in business.

The use of credit to keep the wheels of commerce rolling has been recognized as simply the way business operates today. There's absolutely no reason why you, as a small business owner shouldn't have Business Credit Cards to not only manage cash flow but also to better track expenses.

Consider these cards a business credit line for use to grow the business. A monthly "loan" to your business as an example.



 

By using a credit card solely for business related expenses, you eliminate the yearly review of all bank statements trying to find out which purchases are actually business related. Remember that any legitimate business expense can be taken off the gross revenue figure thereby lowering the total overall tax bite. Business expense tracking is serious business and should be considered critical to the business health and longevity.

By using company credit cards for all business expenses, you are able to capture not only the list of deductions but also any interest that may have accrued if the bill wasn't paid completely each month. Any annual fees the bank charges are also considered deductible on a company card.

Another big benefit of using your business credit line for business items is that it provides a paper trail in the event of a tax audit. Although I'm not a tax accountant, I do know that although the IRS wants a full paper trail that includes original receipts, some documentation is better than none at all. Another good thing about credit card use in this instance is that the bank or financial institution can provide some of the documentation for you if ever needed.



Some A Few Business Definitions & Terms:

  • Industry -- An industry is the most detailed category available in NAICS to describe business activities. NAICS provides hundreds of separate industry categories, unique categories that reflect different methods used to produce goods and services. Statistical agencies use industry categories to classify, collect, process, publish, and analyze business statistics. The census uses industry categories to customize census forms, combine information from establishments in the same industry, and publish census statistics.

  • Manufacturing Energy Consumption Survey -- The Energy Information Administration's (EIA's) survey of energy use and related activities by U.S. manufacturers. The survey is administered and compiled by the Census Bureau.

  • Gross Domestic Product (GDP) -- GDP is the most important current measure of our Nation's economic performance. Estimated quarterly by the BEA, GDP is a measure of the total market value of all final goods and services produced in our country during any quarter or year. GDP equals total consumer spending, business investment, and government spending and investment, plus the value of exports, minus the value of imports. GDP estimates are based on current statistics from the Census Bureau and other sources. Every 5 years, GDP estimates are benchmarked to the Economic Census.



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