A lot of naturopathic doctors use one credit card to pay for all their business and personal expenses. While this may seem simple in the moment, it makes for major complications come tax season. A business credit card makes managing cash flow much simpler and gives you greater protection.
Here are three reasons why you need to start using a business credit straight away:
Manage Cash Flow with Ease
Managing your finances is hard enough when everything is already organized.
When your business and personal purchases are all mingled together … it’s almost impossible.
Having a business credit card allows you to automatically track the revenue and overhead from your naturopathic practice in a single statement.
And contrary to what you might have heard, you don’t need to run a large business to get one.
Manage your business finances with ease using a single monthly bill and you’ll have a better idea of your overall business health.
Eliminate Tax-time Stress
Every business owner dreads tax season.
If you want to be sure you have all your records in order by April 15th, then start using a business credit card.
It makes doing your taxes a whole lot easier.
A business credit card separates your personal and business finances — eliminating the tax-time headache.
That way you won’t have to go through every expense line by line.
Plus, most banks give you quarterly and year-end summaries if you use their card. You can upload these reports directly to Quickbooks or whatever accounting program you use.
Business credit cards won’t replace Quickbooks any time soon but they still provide a consolidated expense list that ensures you have everything accounted for.
Get Extra Financial Protection
Using your personal credit card for your naturopathic practice leaves you vulnerable.
Not only can business purchases negatively affect your personal credit score — you won’t have liability protection.
If you use a business credit card under your LLC then your personal funds and assets are protected.
You’ll also get peace of mind knowing you have additional protection benefits such as:
- Fraud Protection
- Warranty Protection
- Theft and Purchase Protection
- Cell Phone Protection
- Travel Protection
While business credit cards offer a variety of perks and protections they also come with a few risks:
- Accruing interest if you carry a monthly balance
- Becoming personally responsible for business debt
- Retroactive rate increases on late payments
The good news is it’s easy to avoid if you pay off your business credit card consistently.
The Profit First system is a great way to help you do that.
It gives you the framework you need to run your business effectively and efficiently.
Keeping a closer eye on your expenses and having a leaner money management system in place, will help you avoid late credit card payments.
Successful business owners know they need to keep their personal finances separate.
Business credit cards allow you to do that with ease, streamlining your cash flow management, tax preparation and offering you extra protection.
They also build your business credit score. This helps you get a better loan or apply for an insurance policy without much hassle.
Here are NerdWallet’s top five business cards:
- Ink Business Cash Credit Card
- The Blue Business Plus Credit Card from American Express
- American Express Blue Business Cash Card
- The Business Platinum Card from American Express
- Delta SkyMiles Reserve Business American Express Card
But it’s important you use this card as part of your financial system — not as a way to pay for things you can’t afford.
If you’re new to Profit First, give Every Single Bean a call. We’ll be happy to show you how it can help you maximize profits from your naturopathic practice.