The Dos and Don’ts of Corporate Credit Card Usage for Startups
Corporate credit cards, when used judiciously, offer startups a world of benefits, from simplified expense tracking to accumulating rewards that can offset business costs. 63% of entrepreneurs who use a company card attribute their success, at least partly, to the freedom and flexibility corporate cards offer.
But, as with any power tool, there’s a right way and a wrong way to wield it. Let’s dive into the essential dos and don’ts of corporate credit card usage to ensure your startup sails smoothly through financial waters.
- Do Select the Right Card for Your Startup
Finding the perfect credit card is like dating: it’s all about compatibility. For startups, that means picking a card that meshes with your financial goals. Compare features of different cards like rewards, low-interest rates, or even zero annual fees to get the most bang for your buck. - Do Clearly Separate Business and Personal Expenses
Mixing business and pleasure is a no-no when it comes to company credit card usage. By reserving your business card strictly for work-related expenses, you’ll have an easier time come tax season. Not only will your accountant thank you, but you’ll be prepared and safeguarded in the event of legal challenges or audits. - Do Set Spending Limits
Setting clear spending limits for those with card access — and establishing firm company spending guidelines — can save potential headaches down the road. Employees will benefit from knowing how much they can spend, whether it’s per day or per trip or per month. And they’ll benefit from clear rules on allowable charges, too. For example, can they upgrade their flight or purchase a new home office chair? - Do Track and Monitor Expenses
In our digital age, there’s no reason to waste valuable time manually tallying receipts at the end of the month. Opt for a company card with built-in expense tracking tools, ensuring every transaction is automatically logged and categorized. This not only streamlines the accounting process but also offers real-time insights into spending patterns, facilitating better financial decision-making. - Do Leverage Rewards Programs
Who doesn’t like free stuff? By selecting a card that provides cashback offers or other incentives — like Expensify’s Company Card, which gives you 2% cashback on everything — you can effortlessly generate funds that can be reinvested in the growth of your business. - Don’t Carry High Balances
Remember, just because you have a high credit limit doesn’t mean you should max it out. Carrying hefty balances can see your hard-earned cash gobbled up by interest rates. Instead, make timely and complete credit card payments every month. This not only avoids interest charges but also builds a positive credit history for your business. - Don’t Overlook Credit Card Fees
Every penny counts in the startup game. Be aware of credit card fees, whether they come in the form of yearly charges or per-transaction costs. Know what you’re up against, and plan your budget accordingly. - Don’t Overspend
Think of your business credit card as a strategic tool, not a blank check. While there’s allure in making big purchases, it’s essential to align them with your company’s financial objectives. After all, it’s not just about spending; it’s about spending smart. - Don’t Neglect the Fine Print
Ah, the dreaded T&Cs. While it might seem like a bore, understanding your card’s terms can save you from unexpected surprises. From interest spikes to penalty fees, knowledge truly is power. - Spend Smarter, Not Harder
Credit cards are more than just a payment method; they’re a strategic tool for growth. As you journey from startup to industry leader, remember these tips to ensure your card remains an asset, not a liability. By exercising diligence and utilizing rewards effectively, you position your business for sustained financial health and success.
Have you read?
Revealed: Top Environmental Innovative US States, 2023.
Report: Best Countries for Cyber Security Professionals, 2023 (Average Salary).
Best CEOs in The Global Video Streaming Industry, 2023.
Ranked: World’s Best-Selling Champagne Brands, 2023.
Ranked: Top Companies in Sports Tech, 2023.
Add CEOWORLD magazine to your Google News feed.
Follow CEOWORLD magazine headlines on: Google News, LinkedIn, Twitter, and Facebook.
Copyright 2024 The CEOWORLD magazine. All rights reserved. This material (and any extract from it) must not be copied, redistributed or placed on any website, without CEOWORLD magazine' prior written consent. For media queries, please contact: info@ceoworld.biz