Business Credit Cards Simplify Record Keeping

It's true that careless use of credit cards can put you out of business faster than you can swipe your card through the reader.

When used effectively, however, a business credit card can simplify your financial record keeping--and maybe even earn you a little something "extra" for your diligence, too.

Here are five ways a business credit card can help:

1. Separation of personal and business finances

All business owners know how important it is to keep personal finances separate from business finances. A simple way to do this is to obtain a business credit card that's used only for business-related expenses and purchases.When the statement comes, you'll know without a doubt that every transaction listed is associated with your business and can avoid having to review the statement carefully to highlight or circle any expenses that don't belong with your business records.

2. Track employee spending

Most businesses have an employee who's responsible for paying small bills or making purchases on behalf of the business.It can be time-consuming to require that every transaction get your approval before making the payment, especially if vendors come looking for payments when you're in meetings or out of the office. An easier way to keep track of employee spending is to issue designated employees credit cards in their names, linked to your business account.

Most credit cards let you set monthly spending limits per card, so you'll have some peace of mind knowing your employees aren't charging excessively.

When your billing statement arrives, the transactions will be itemized and divided based on which employee made the purchase. If an employee abuses his or her credit card, you'll know before it gets out of hand.

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3. Reduce time balancing your checkbook

When you get into the habit of using a business credit card to pay for all of your monthly expenses and purchases, you'll benefit from the reduced time required to balance your checkbook.Instead of having numerous transactions in your checkbook register each month, you'll be able to write a single check to the credit card company. This makes it faster to balance your checkbook and reduces the margin of error since there will be minimal transactions to keep track of.