A corporate credit card should be the only card you utilize when making company purchases on a credit card. Transactions such as purchasing equipment, office supplies, marketing, and advertising, or simply taking clients out for lunch, are all appropriate methods for a corporate credit card to be utilized.
A corporate credit card is not to be used for personal purposes. Did you know that co-mingling funds could endanger the protection of the corporate veil? Corporate veil piercing is the top litigated problem in corporate law today, so separating personal and corporate credit cards is crucial.
A credit card that is entirely used for business enables you to divide the monetary affairs of your company, thereby eliminating one of the dangers connected with the co-mingling of personal and business finances.
The five major benefits of a corporate credit card include:
Easy Access to Credit: Rather than deal with the long, drawn-out process of applying for a loan or line of credit, a corporate credit card enables you to access credit immediately.
Fast Access to Cash: If a business needs cash quickly, a corporate credit card can be a real life saver. While the cash advance limitation on a company credit card is less than the credit restriction, the ability to access cash immediately is extremely advantageous for a business.
Monitor Expenditures: Handling and tracking business expenses becomes a lot easier with a corporate credit card. All business purchases made via a corporate credit card are tracked and reported on your company’s monthly statements, making it a lot easier for bookkeeping and tax time. Additionally, many corporate credit cards will provide year-end declarations that sort yearly costs into particular classifications.
Control Spending: Issuing company credit cards to individual employees could provide several tax advantages. With corporate credit cards, a business owner has the ability to regulate and control spending on each issued card.
Corporate Benefits: Corporate credit cards supply a range of benefits for companies such as low introductory rates, travel rewards, cash back rewards, insurance protection, etc.
In addition to these five major benefits, a company credit card also enables the business itself to establish its own creditworthiness, and to begin building business credit.
A creditworthy reputation is an invaluable asset to a business, since it enables the business to acquire credit without having to rely on the credit ratings of the individual owner. As one can clearly see, the benefits of a corporate credit card are significant.
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