Tue 18 Oct 2011

The Requirements for Opening a Business Credit Card

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A credit card can be issued to small business owners in their business name. This card has various advantages, which have a positive influence on the credit history. More importantly, in case of closure your personal credit history remains unaffected. A careful approach is necessary to avoid the complications involved during the application process.

Getting Started

Make sure that you have a well-managed checking account for at least one year; this is one of the qualifications required when applying for a business credit card.

Choosing a Credit Company

Comparing quotes from different companies is one of the best approaches. Companies become poles apart when it comes to pricing; always make sure to look for superlative interest rates coupled with services that suit your business needs before making your decision.

Paperwork Requirements

Social security numbers, Business Tax Id Number, Number of persons authorized to use the card, business legal name, street address and business income statement for the previous year make some of the basic requirements during the application process. Always confirm with the lender of your choice on the documentation to avoid complications during the application process.

Some lenders can pre qualify clients, which can help avoid unnecessary delays. With a good financial foundation, there should be no worries. In case application is declined, applicants can make an appeal, however, it is recommended to do so after twelve months.

Potential Business Credit Card Drawbacks

Business credit cards attract higher interest rates when compared to personal credit cards. The card should never be used to boost cash flow operations unless it is necessary to do so. In case of any defaulted payments, businesses suffer negative credibility, in the end negatively influences their credibility both clients and lending institutions.

Businesses should always have proper expenditure records. This serves as risk mitigating factor given that most businesses face the risk of unauthorized expenditure. Keeping track of your expenditure records is necessary to avoid penalties and defaulted payments. It is also important to have hands on approach towards the terms of service; business credit cards frequently attract more changes devoid of notification to clients when compared to personal credit cards. (more…)

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Tue 18 Oct 2011

Tracking Your Business Credit Card Expenses

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Every business card holder ought to be aware that transactions with the card will be taxed. It therefore requires very keen tracking of all expenses for easy referral when they are needed. Recording the transactions is the most effective way to do this. Here are some very useful tips on tracking your business card expenses.

First of all you need to save every receipt for any payment done using the business card. There should be no exception to this no wonder how minor you think the payment is. If anyone else has access to your account, get them a business card which they will be using and ensure that they too keep all the receipts for payments they make using the card.

The next thing you need to do is ensure that all payments using the credit card are entered into another book. This includes the ledger book which has all the transactions about your expenses. Currently this has been eased through the use of program software such as QuickBooks. Record the transactions regularly such as after a week and if possible on a daily basis.

Another very important thing is to always create a back up of all your records. This can be done through making of copies of all receipts and the record books. These copies should be kept in a well protected place where they cannot be altered neither can they be lost. For soft copies you can load them on an online storage service which is non erasable and can never be affected in anyway.

Finally when getting ready to clear your taxes seek help from an accountant who will group the expenses in their various taxable classes. This eliminates any risk of some expenses being taxed higher by virtue of being in the wrong class. Refer to your records to decide which class to put each of the expenses. (more…)

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Tue 18 Oct 2011

Business Credit Card

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How Your Business Can Benefit From Business Credit Cards?

Regardless of what type of business you own or how large or small it is, your business can greatly benefit from business credit cards. First and foremost, they will actually portray your business as more professional and earn your business a whole new level of respect with your distributors and suppliers. The following are just a few of the many benefits your business will receive:

Business credit cards can help you to build your company’s credit. This is very helpful, especially if you plan on expanding.

They will also help you in the event of an emergency. Businesses that do not keep a line of credit are often put out of business when disaster strikes. A fire could easily wipe out your business if you do not have a line of credit to use to replace your equipment and merchandise.

If your business requires traveling, having a credit card will eliminate the need for cash. This makes tracking expenses much easier for your accounting department.

Another advantage is that your business may be able to earn special rewards given by the various accounts. You could be earning discounts on a variety of different services for your business.

These are just a few of the ways your business can benefit from having business credit cards. You will, however, want to be certain that your business does not overextend itself with its credit. The last thing you want is to find that your expenses far exceed your profits. (more…)

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Tue 18 Oct 2011

Tips for Small Business Credit Management

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Managing credit cards is an area of concern that most business owners should put more emphasis to each the much-needed success. The following tips in small business credit management can help managed your business credit effectively.

Start a Business Credit File

A credit file is important since it helps create and maintain a credit profile for your business. Setting up a credit file is an easy process; all you need to do is apply for a D-U-N-S number with Dun & Bradstreet the credit bureau that deals directly with businesses.

Use Business Credit

All business related transactions should be carried out under your business name. This helps in establishing a credit history. Things like business accounts, credit cards, utilities and more help in building your business credit. Proper management and regular use of business credit card and transactional accounts ideally have great impact on your credit history.

Pay Your Bills

Every business has obligations most of which require detailed attention. This helps keep tract when your bills fall due to avoid late payments, which attract penalties and in the end a negative effect on your payment history. Dun & Bradstreet received reports from creditors on how you meet your business obligatory payments. Paying your bills on time ensures a good business credit score, which increases your credibility to both customers and lending institutions.

Keep Balances Low

Business owners should always strive to keep their business credit balances to the lowest minimum. The level at which you maintain your credit line matters since credit bureaus use your usage limit to determine the business credit score. The recommended exposure limit should always be maintained at a level that is 30 percent of the allowed credit facility. However, most businesses use their facilities to the maximum without considering the fact that it has a negative influence on the credit score.

Monitor Your Credit

It is important to keep track of any changes that may affect your credit report. These changes are usually updated immediately on your credit report. Monitoring your credit report is imperative owing to the fact that there are some errors that can drastically pull down your credit score. (more…)

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