- Apply for a business credit card
- Consider one that pays awards
- Consider having your key vendor automatically charge your payments
Obtain a business credit card
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Well this is not the most creative suggestion in this guide, it is one of the small practical things you can do to prepare yourself for your business. Even as a S-Corporation, I have to personally guarantee the credit card and my personal information was needed on the application when I applied. The card will have your company name and your name on it.
While you ideally will not extend yourself using credit card debt, it is a very convenient way to pay for items for your business and keep clean records. While we intend to pay each month's balance in full to avoid any interest charges, it is a nice back up option for any month where expenses exceed revenue and money in the business account (especially if the expenses are directly related to a client job and we are basically just floating the cost until we receive client payment).
We have used the American Express corporate card for awhile now and this has one big advantage. We enrolled in their awards program and we earn one point for each dollar we charge. We can then transfer these points for airline miles and other items. We arranged with our primary vendor to have all of our invoices automatically charged after 10 days (we then get 1% off the invoice amount for prompt payment) and I don't have to worry about writing checks and making a late payment to this important vendor. They get paid on time - every time - and we get tons of awards we can then use for air travel.
I also keep a copy of the credit card in the safe in the office and this allows our employees to make purchases in our absence. Of course these are known purchases and I always get a receipt to enter the purchase into the accounting software. You also have the advantage of being able to dispute a purchase down the road and given all the web and direct mail purchases we do, a credit card makes our life a lot easier. We also got a VISA since we can't use our American Express everywhere we shop.
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