Help & How-To

Finance & Accounting
Should we be using our business credit card for purchases yet?
My business partner and I have different philosophies on when to use a credit card. She'd like us to use our business card every time we're talking about our business or working on our business at a restaurant or coffee shop. Since we don't yet have any revenue, and I'm much more cautious about credit card spending, I'd like us to use our personal accounts, hold onto our receipts and have our business owe us back that money. It's a pretty divisive issue for us--any advice?

Asked by melissamcf
Posted: Wednesday, April 30, 2008  |  Found in Finance & Accounting


More answers by Pam Newman
Answer by Pam Newman
Accruing credit card debt will increase your costs due to finance charges. What I would recommend for you and your partner is making equity contributions or loan the business money to pay the credit card. Utilizing the business credit card keeps a clean division of personal and business expenses for accounting purposes. Then you can just write a business check to pay the credit card bill and avoid finance charges. Once the business has revenue, then it can repay the loan or you can take draws against the investment made in the business if you desire.
Pam Newman is a Certified Management Accountant, author and Certified QuickBooks ProAdvisor for Financial and Point-of-Sale software. She is also president of RPPC, Inc., which provides customized business development services.


Recent Articles & Resources
OPEN Forum: Recent Topics in Articles & Resources
The Secret Formula for Generating Crazy Amounts of PR
By Tom Szaky So what's the trick? Well here are five simple tips: 1. DO NOT HIRE A PR FIRM : This is the golden rule in my opinion for one simple

Time Bomb: Don't Fall Victim to Late Payments
Late-paying customers can put your business in jeopardy. Get organized -- and get paid on time. By C.J.Prince Cash was flowing comfortably at

Price Fix
To keep up with increasing costs -- and big competitors' prices -- more small businesses are pulling the trigger on the pricing gun. By C.J. Prince

Raising Money Using Convertible Debt
There's debt financing, there's equity financing, and then there's convertible debt. Find out why this third option can work well for startups. By

The 5 Challenges of the Intermediate Entrepreneur
By Wendy Piersall I’d consider myself an intermediate entrepreneur. I have nearly eight years of self-employment under my belt. I know the pitfalls
Have a burning question? Ask now!

Meet the Experts