June 25, 2024

My favorite way to pay for business expenses.

Are you an entrepreneur, a start-up small business or a sole professional business person? You might want to reconsider how you pay for everything for your business.

Do you use your hard earned money to pay for business expense?

Most people who have a business, but are not hundred percent committed, will get involved in a business by using their personal check or credit card for the initial sign-up fee. Many entrepreneurs also use personal savings or financial help from family and friends to pay for any purchases for the business. And before you know, some month down the road, you are still using your own personal monetary instruments.

Do you want to be more efficient?

In fact, for tax purpose and financial reporting it is easier if the business has a separate bank account. To mix personal and business expenses is not efficient bookkeeping. The Internal Revenue Service requires the business to substantiate all entries on your tax return. If business purchases and personal payments are combined on one account it creates a complication to reconcile the statement details.

However, you still need to keep any receipts for purchases, invoices for monthly expenses like electricity, rent, internet, etc.

You can find more information on this subject on the website of the IRS. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Recordkeeping

Using Other People’s Money to pay for Business Expenses makes Sense!

Reasons why Other People’s Money is beneficial.

When you have a credit card (OPM) specifically for the business, the statements provide a great backup for keeping track of costs and help classify them into categories. Not only will a good record system help you at tax time, but it also can give you details for monitoring the progress of your business and help secure future financing.

Credit cards tailored to small business often have a reporting feature that gives analytics on how the total sum is spent. Actually better is when the provider offers the option to upload the details in to a software program such as Quickbooks or Quicken.

A credit card can help with cash flow issues that a small business owner might face if he needs larger quantities of parts for manufacturing his product or more stock of merchandise. However, if the card is used for large sums, the business owner needs to be sure that he can pay off the monthly charges every time.

Many credit cards for small business also provide a rewards program that could help in lowering cost of travel expenses, office supplies or cash back. An important factor to consider is how the points are accumulated. Does the card issuer offer 1 point for every dollar or are there categories that earn more points?

Here is more HELP:

Most franchise companies, network marketing or internet businesses provide lots of details on the company and the product or services to new business partners. However, there is little or no help on any legal or financial implications. But it is not too late to get on the right track to have a sound and successful business.

Check out my free report on How to Launch your Small Business Without any Hurdles. Click Here.

If you got value from this post or have any comments, please let me know. I always enjoy connecting with my readers.

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