5 Ways Credit Cards Can Help You Grow Your Business

Wednesday, March 11 at 07:05 AM
Category: Business Banking

Article authored by Stephanie Chandler courtesy of Visa Business.*

You may not realize that credit cards can have a significant impact on the growth of your business. Following are the top five ways credit cards can help you build a thriving business.

  1. Expense Tracking – Using credit cards keeps my expenses in one easy-to-access location (statements). This came in handy big time when I was audited by the IRS several years ago. During the meeting, the auditor inquired about various expenses on specific dates, going back several years. It helped that my bookkeeper kept all of my credit card statements in a binder so she could just flip back and forth and quickly locate each transaction. This organization impressed the auditor and allowed me to walk away from that audit without any adjustments.
  2. Business Accounting – Credit cards help to keep business and personal expenses separate, which is also very important to the IRS. For example, when I go to Costco, I use my business debit card for business-related expenses, and I have the clerk ring up a separate transaction using my personal debit card for household items. If the IRS ever questions whether I mingle business and personal expenses, I can always show statements for two transactions on the same day.
  3. Cash Flow – For many small businesses, cash flow can be challenging. Using credit cards makes it easier to keep your cash in the bank until it’s time to make a payment. Ideally, you want to pay off the balance in full each month, though this isn’t always feasible, especially in the early years in business. Which leads to my next point…
  4. Business Capital – The reality is that it can be difficult to obtain a small business loan, and many, many businesses have been built by leveraging credit cards. While interest rates tend to be higher than small business loans, credit cards can be the difference between starting and growing a business, or going out of business altogether.
  5. Payment Processing – Recently I attended a local arts and crafts fair and made several purchases – all with my credit card. But when I handed over my card to one of the vendors for a transaction worth about $75, the owner announced, “I’m sorry; we only take cash.” Come again? When I asked why, he said he didn’t want to pay the fees to the credit card processors and that it was just easier to take cash. “Most people don’t mind,” he told me. I asked if he ever added up how much business he loses because shoppers aren’t carrying cash. “That can be a problem,” he nodded, as I walked away without buying anything.

Accepting credit cards from customers is essential, not only for convenience, but for capturing more sales. Sure you will pay a few percentage points on each transaction; consider that part of your cost of doing business. My business processed transactions in the six figures last year, from sales of both products and services. I am certain that revenues would have been substantially lower if we didn’t accept credit cards.

This blog entry was sponsored by Visa Business and the blogger received compensation for his/her time from Visa for sharing their views in this post. The views expressed here are solely the blogger’s, not Visa’s.

Links marked with * go to a third-party site not operated or endorsed by Arvest Bank, an FDIC-insured institution.

Tags: Arvest Biz, Business Banking, Credit Cards
Kathi Beckett on 3/13/2015 at 4:19 PM
What could be better for a business customer than to have an easy payment solution for their expenses with great customer service and free tracking! Every business has expenses. Why not track them and get great reporting too!

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