More reward than risk with corporate credit card

Using a credit card for business purposes has many advantages. You can manage the payment of bills and at the same time improve your company’s purchasing power. Furthermore, a business credit card helps keep your business and personal expenses separate, which is important when calculating deductions for business-related expenses. It also minimizes your risk of being flagged for an audit by the IRS if it appears that personal expenses are being paid with corporate funds.

On the other hand, using a credit card for business expenses can be a bit more costly and carries some risk.

Here are some of the advantages of using a credit card for your business:

  1. Flexibility. You can pay monthly bills and have the ability to purchase equipment or other capital needs without worrying about cash flow. If revenue is lean one month, making the payments on a credit card allows those bills to be paid timely. This is especially true if a large purchase needs to be made during same time that other expenses are rolling in.
  2. Improve credit. Relatedly, the more you use the credit card and make regular payments on that card, you establish a credit history for your business and your overall credit improves. Having separate credit cards for your personal use and business use further expands your potential credit for your business and your family.
  3. Options for more lines of credit. Many business credit cards offer expanded credit beyond the limits of the card and others offer rewards programs that provide cash back, travel perks and other incentives.
  4. Keeps personal and business separate. This is important. By maintaining a business credit card, this reduces the risk of comingling personal and business expenditures. This is particularly important because only business-related expenses are deductible on a business tax return or Schedule C. By keeping those purchases separate, it is easier to identify business-related expenses and therefore claim all the deductions you are entitled to. As stated above, this also protects you and your business from being flagged for an audit if the IRS suspects that personal expenses are being paid out of business accounts.
  5. Security. If you need to delegate some financial duties to certain employees, a business credit card is a way to give them limited purchasing power. Check for those cards that allow you to set and adjust individual spending limits and alert you for every purchase.

As with most things, there is some risk with the reward.

  1. High fees. Business credit cards usually carry higher interest rates than other lines of credit. If not repaid on time, this can add up to a large amount, so it’s imperative that the balances are satisfied each month. Interest rates on the cards can also fluctuate. Finally, some cards require an annual fee.
  2. Personal liability. Many business cards will require the cardholder to personally guarantee that the debt will be repaid. Again, it is important that when using a business credit card to treat it as a monthly bill no different than a utility bill.
  3. Security. While business credit cards can make it easier to give certain employees the ability to make purchases on behalf of the company, it is imperative that you establish measures to ensure that the card and/or the card information is not stolen by employees, vendors or anyone else who comes through the office.

Remember, our Back Office Solutions Team can handle payment of all your monthly bills, which takes that burden away from you and frees you up to handle the business of running your business. Please let us know if you have any questions, and we can have a member of our BOS team or your tax adviser walk you through the best practices for using a business credit card.

Sources: Investopedia.com, smallbiztrends.com

Recent Articles:

Follow Antares CPAs:

Succession & Transition Strategies

Creating a successful succession plan is about protecting the future of a business and/or brand and ensuring there is a strategy in place to ensure your business continues to thrive.

After years of investing time, money and other resources, it’s imperative to prepare for this next stage in business and life. Poor planning can increase risks for stakeholders and tarnish legacies. Let’s make sure the next generation is well-equipped and ready to take your life’s work and family legacy to an even greater level of success.

Each situation is unique because the needs of each one involved are unique. We carefully review each opportunity to determine how best to structure a transition while meeting your goals, complying with any brand licensing polices and minimizing the tax implications of the transfer.

  • Next generation succession planning
  • Retirement planning
  • Wealth management

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Technology Services

Antares Group’s technology team provides convenient hardware and software support, along with comprehensive cloud accounting services with 24/7 access to up-to-date financial information exactly the way you want it, on any connected device, with a customizable dashboard interface. We use best-in class cloud accounting platforms and software including Sage Intacct, Bill.com and robot process automation (RPA) with integration capabilities with some of the leading point-of-sale, payroll, and business operations management software programs.

Cloud accounting is just the beginning; Antares Group’s experienced technology team also performs system evaluations and makes recommendations for products and services that will help your business run more efficiently, as well as protecting your information and infrastructure with robust security options. Using the right technology for automation will simplify your life and keep your valuable data safe..

  • Technology and security optimization
  • Complete cloud accounting services
  • Computer troubleshooting assistance with remote and onsite repair

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Business Planning & Valuation

An accurate understanding of your company’s current value and financial viability is vital for achieving business success and the launch pad to boundless possibilities in the years to come. Realistic valuations are essential for long-term strategic plans, business successions and expansions, gift and estate planning, and a lucrative retirement package. Planning for where you want to go in the future is what our business and tax advisors do best. Whatever your goals, we are here to provide you with the right plan and insightful guidance to achieve it.

  • Trend reporting and analysis and business valuation
  • General business and start-up consulting
  • Major reinvestment planning
  • Cash flow projections

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Back Office Solutions

In such a fast-moving business environment, business owners need every advantage to succeed. Improving efficiency should be an ongoing part of your strategy for financial success, empowering you to make continuous improvements.

Whether your business is a single location seeking to grow effectively and sustainably, an established franchise brand adding new locations, or something in between, Antares Group provides a suite of back office services and the financial expertise to help business owners and managers achieve their operational and financial goals. In the process of supporting your essential back office operations with practical solutions, we analyze the function and effectiveness, looking for inefficiencies and potential liabilities, offering valuable insights for owners and managers.

  • Daily deposit verification and online banking monitoring
  • Process invoices and code general ledger accounts
  • Process vendor payments and file 1099s
  • Prepare and file sales and use tax returns
  • Reconcile bank, credit card and cashless sales accounts

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Tax Advisory

Minimizing your tax burden is a year-round strategy; planning for and preparing complex business and individual tax returns is where Antares Group excels. Beyond simply helping you fulfill basic tax obligations, you can rely on our tax advisory team to keep you informed of ever-changing regulations and keep you in compliance. We conduct regular reviews to make sure all methods of reducing your tax liabilities are being used. We routinely assess your personal income tax situation and cash flow to guard against the unexpected. This ongoing strategic analysis empowers you to maximize tax savings and capitalize on new opportunities.

In addition, we provide advisory services for new business startups, acquisitions, and dispositions. Through careful analysis, we help clients determine the best structure and make the process as seamless as possible.

  • Business and individual year-end tax returns
  • Personal property, gift, and trust income tax returns
  • Fixed asset setup and maintenance
  • Annual tax planning and preparation

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Cloud Accounting

Whether you run a small closely held business or a large franchise operation, maintaining a firm grasp of accounting and bookkeeping can be challenging. Between managing staff and overseeing daily operations, there is not enough time to dig into the books and make sense of the financials. You need to know the facts and the implications. – having precise, up-to-date information at hand means you always know your financial position so you can make informed decisions that keep your business moving forward.

The financial experts at Antares can create a custom menu of accounting and tax services perfectly catered to your business needs, including accurate and timely financial statements and reports, so you are always prepared to respond quickly to changing and challenging circumstances. Along the way, we provide clear feedback and financial guidance to help you predict trends and recognize issues, then make the necessary adjustments to sustain cash flow throughout the year.

  • Timely preparation of financial statements based on your particular needs
  • Complete preparation of sales, payroll, inventory, accrual, and prepaid journal entries
  • Meticulous monthly bank and credit card reconciliations

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com