My aunt availed of the early retirement from her long-term career. However, because she did not exactly want to be idle just yet, she is now in the process of setting up her small business. My uncle is very much supportive of her decision and even helping her with the set-up especially that he has his own business himself.
Having a high credit rating, my aunt did not have a hard time applying for a business credit card. Getting one was actually on top of her list. This is the best piece of advice she received. It means that her business transactions will not get mixed up with personal purchases which will make recording easier. Having a business credit card will also help her build a credit history for the separate business entity. My aunt did her research and was fully convinced she needs at least one card for the business. She found out that a lot of business owners have not realized the advantages of having one so she did not want to fall into the same mistake.
She listed the ways on how she will benefit from her business credit card.
1. She is able to track all expenses via her monthly billing statement which is itemized. Therefore, there will be no need to find loose receipts when recording purchases.
2. In case she needs to apply for a loan when she expands her business or her office, she would have a considerably good history to fall back on.
3. Extension to trusted employees is advisable for use in their official business transactions. This eliminates over-spending and/or embezzlement of company funds. Employees need not support purchases with receipts because the billing statement will reflect transactions.
4. Frequent travels on official trips will incur rebates or cash backs. Who would not want discounts, right? Rewards may be applied to office supplies, representation expenses, discounts on overhead like internet subscription and other related matters.
5. The credit card company is able to give her a good rate for her business credit card because of good handling of her personal account.
6. She is able to take advantage of the 21-day grace period that most companies offer to small businesses; therefore she is also able to establish initial cash flow.
7. She can pay the bills online at her own convenience and save time and effort. This also means she has no reason to miss due dates.
It seems like my uncle has trained auntie well in terms of managing the financial aspect of a business. I expect that she will not get too stressed out in her new endeavor and will actually enjoy the fruits of her labor.