Managing Your Small Business Credit Card
If you have your own small business, chances are you have opened a business credit card to help keep your business running, and get you on your feet
. There are however, some things you should know about your business finances to make sure you will be able to keep it under control and functioned how it is meant to.
Small business credit management is something that many business owners have trouble with. If you want your business to be successful, you need to manage yours as effectively as possible.
Here are a few tips for managing your small business finances. Letting it get out of control can ruin your business.
First, start a credit file for your business. In order to start building up yours, you should make sure that you have a specific file for your business.
There are professional bureaus out there that relates directly to businesses. Check with them to see if you already have an existing profile for your business.
If you do not have a profile yet, you need to apply for a credit number with one of these bureaus which you can find online. This will get you started with a profile for your business.
Next, you need to learn the proper way to use business credit. You need to try to establish a history whenever you have a chance.
Instead of putting things in your name, set accounts up in the business name instead. For example, if you can get a business credit card, make sure that you put it in the name of the business.
The same goes for signing up for utilities or any other services that your business is going to need. When you have the opportunity to make purchases, make sure that you do so with a business card account.
You do not want to make large purchases, but you should make small regular purchases with your business account. This will establish a history that can help you in the future when you need to make larger or more important purchases.
Next, you need to pay your bills. One of the most important things that you can do for your business card account is pay your bills on time.
You should strive to have a perfect record when it comes to making your bill payments on time. This goes for everything from your cards to the electric bill.
Many of your creditors are going to report to your professional bureau your payment history. One of the most important factors in determining your business credit score is whether you make your payments on time or not.
If you do make all your payments on time, this is going to boost your score significantly. On the contrary, if you do not make your payments on time it can dramatically damage your score, and it can be very hard to bounce back.
You must always keep your balances low. Whenever you use your business account, you want to make sure that you keep your balances low.
You do not want to max out your business accounts or lines of credit. Try to keep them at a level that is below thirty percent of what your available line is.
The bureaus are going to look at this when determining what your score should be. They do not like to see businesses that have all of their lines of credit maxed out.
This gives the appearance that your business is struggling, or that you are an irresponsible business owner. This will not inspire confidence in investors, bankers, or customers.
Last, always always monitor your credit. You need to continually monitor your reports as much as possible. Most of the time, when a change occurs in your report, it is going to happen relatively quickly.
This means that you need to stay up-to-date on your reports and watch out for any errors. The worst thing you can do is forget about it-credit scores are like animals-when they are left unwatched and uncontrolled, they can become monsters.
As you can see, there are certain things which you should do to make sure your business credit is managed properly. Take the care that you need to, and your business will flourish.
by: Terry Daniels
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