What are business credit cards and how do they differ from individual credit cards? As the name suggests, business credit cards are in the names of the business houses. They are used only for paying expenses incurred in connection with conducting the company’s business. They differ from individual credit cards in greater flexibility of credit limits, low APRs and a few other benefits applicable to businesses. That itself speaks for the benefits of business credit cards. Just as you have a corporate bank account which is different from your own personal bank account which belongs only to you, so also the business credit cards belong to the corporate world different from your own personal world.
The principle underlying both types of credit cards is the same. But the crux of the benefit lies in the ease with which the business credit cards separate the expenses incurred by the personnel in conducting the company’s business from personal expenses they incur. One is spared the necessity of sitting and browsing through a pile of vouchers at the end of the month, segregating the expenses incurred on behalf of the company and those on your own behalf. Also the formats of the credit card bills can be made to integrate with the corporate business accounting practices, very easily.
If necessary, credit card billing formats can be modified to your company’s corporate accounting procedures. You can take the help of a software programmer who, with the help of specially formulated software, can create billing formats that are compatible with the business accounts procedures. This results in a major corporate cost reduction and simplified business expense accounting. Thus a major overhead for the small business is reduced resulting in saving manual labour and an increase in corporate profits. And for this, all you have to do is to segregate the use of credit cards at the grass root level, that is, at the time of incurring the expenses itself.
Every corporate accounting system has its own accounting requirements where expenses are grouped under different accounting heads. To facilitate the use of business credit cards and save valuable overheads for the small business, the suppliers sometimes offer facilities that save you the effort of segregating the business expenses and entering the details manually in your corporate account ledgers.
You can group the credit card billing formats as per your company’s different accounting heads. Then you can just export the data of the expenses incurred for corporate business by downloading the formatted bills and exporting them to your corporate accounting software. This is the main reason why business credit cards are so popular with the end users, i.e. the corporate personnel as also with the corporate managements.