Credit cards – the bookkeeping saviour of small businesses
Credit cards are often viewed as a necessary evil – a tool that is necessary if you want to make airline reservations, buy things off the internet, and maintain a consistent lifestyle from day to day if you are paid fortnightly or monthly. However, credit cards also have some innate advantages that can help out when it comes to budgeting, tracking spending, separation of finances and all those other integral bookkeeping functions. Today we check out five ways that credit cards make the bookkeeping process easier.
- Track Employee Spending
Purchase orders make for messy paperwork, and requiring pre-approvals for spending can delay business processes and create missed opportunities. However, issuing credit cards to employees that are authorised to do company spending is a simple, centralised way to keep track of purchases for your Melbourne bookkeeping service, and make sure spending is itemised.
While some employers are concerned about the potential for abuse, all that needs to be done is to request a separate statement for each credit card holder. It is that particular employee’s responsibility to ensure that the card details remain safe and secure; and with monthly statements, little time can go past before any inappropriate spending would be identified.
- Separating Business and Personal Spending
Small business owners often have their personal lives intimately tied to business lives – you probably take phone calls at home, answer email on the weekends and work late hours, as well as bringing small things from home for the office. However, mixing up your personal and business spending is a recipe for headaches, both in your week to week bookkeeping, quarterly BAS statements and end of year tax return.
Use two different credit cards for your personal and business spending, and you’ll be able to easily square away the accounts. Many companies even offer personalizable card faces – you could put your family’s face on one card, and business logo on the other!
- Speed Up Chequebook Balancing
Balancing your chequebook is one of the most time consuming parts of bookkeeping. You can either make things easier for yourself and staff, or save money on your Melbourne bookkeeping service, by using a credit card for spending and writing a single cheque to cover the payment at the end of the month.
- Credit Card Rewards
Rewards systems on credit cards are usually designed for household levels of spending, making it difficult to actually redeem any rewards. However, business outgoings are usually far more substantial than household outgoings … and with the help of a dedicated Melbourne bookkeeping service, you can ensure that your credit card debts are paid off promptly each month. This allows you to gain rewards without being hit with any interest payments.
- Customisable reports
Occasionally, you’ll run across a credit card vendor whose internet banking allows you to create a range of custom reports for your credit cards. If you need to enter a specific type of data into MYOB or QuickBooks for bookkeeping purposes, it is much faster to have all the transactions sorted through and printed for data entry.
Credit cards are something that both households and businesses should be careful with – but they have some innate advantages, and are certainly not just a necessary evil to be endured!
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