Tips for Using Your Company Credit Card
Posted on May 28, 2014 in Business Tips
Your company credit card and your personal credit card have many things in common. They are both available for short-term financing of purchases and they both add interest charges to everything that you buy. The interest added to credit card purchases can sometimes make buying groceries on your credit card a bad idea. That is why so many people work hard to limit their credit card usage and try to manage their finances without the extensive use of credit.
In the business world, there are plenty of good reasons to use your credit card. For one thing, the extensive use of a corporate credit card will help to strengthen your corporate credit rating, which can help you to get the long-term financing you need for future projects. As long as you use your corporate credit card responsibly, it can do a great deal of good for your company's financial position now and in the future.
Have A Plan
Anything that you do in business needs a plan to be successful. From your comprehensive business plan right down to the plan you have for your next trade show appearance, you need a plan to follow to be successful.
Before you take on a company credit card, sit down and consider all of the ways that you would use that card and create a plan that you can follow. That plan should outline how you will use the card in daily operations and the guidelines for using the card in emergency situations. Once you have a plan, then it becomes easier to get the most out of your card.
Know The Card Guidelines
Some business owners sign up for a credit card because the card offers incentives such as cash back on purchases and free miles to be used towards travel discount. But what most people do not realize is that these incentives usually have a long list of guidelines that must be followed to get the discounts or benefits. For example, the cash back incentive may only apply to certain types of purchases.
It is important to become very familiar with the guidelines utilized by the credit card company and allow those guidelines to dictate how you use the card. There may be instances where you have to use the card for purchases that fall outside of the regular guidelines of the card. But, for the most part, you should follow the incentive guidelines to make sure that you get the most from all of your corporate credit card purchases.
Limit Accessibility To Employees
Small businesses tend to give more responsibility to employees than larger corporations. But that expanded responsibility should not dictate how the company credit card is used. It is extremely important that business owners keep a close eye on the corporate credit card and prevent it from being used by too many employees.
Nearly every corporate credit card program allows the primary card holder to designate other people who are authorized to use the card. Small business owners tend to go by instinct and open up the card to every employee that they would normally trust. In order to protect the company and keep the company finances under control, it is extremely important to limit accessibility of the company card to employees. If an employee does not need to have access to the company credit card account, then do not allow access for that employee.
No Personal Purchases
It can be tempting for a business owner to pull out his company credit card for a personal purchase to try and limit how much he adds to his personal credit card balance. But it is extremely important to avoid using the corporate card for personal purchases of any kind.
A corporate credit card report can be used to help analyze company spending and determine what kinds of supplies and services were purchased to help the company operate. If the card is used for personal purchases, then those reports all become useless. The interest on personal purchases starts to get mingled with business purchases and you are no long able to keep an accurate record of your company spending habits.
Corporate credit cards can be excellent financing tools for your company, so long as they are used properly. As with anything else involved with running your business, the use of the company credit card needs to be carefully monitored and planned so that it can be used as an short-term financing tool and an ally to your business' finances. By utilizing a company credit card properly, you can save your company money on future purchases and enjoy a range of benefits that will make your life a lot easier.