By Mark Wright, OD, FCOVD,
and Carole Burns, OD, FCOVD
Oct. 13, 2021
A practice credit card can give you greater purchasing power and payment flexibility when acquiring new instrumentation and making other business purchases. Here is why a practice credit card could be beneficial to you, and how to decide which one would best suit your needs.
One rule that you should never violate is to mix personal and business income. A simple way to do this is to have a personal checking account and a personal credit card that are only used for personal expenses and never used for practice expenses.
Then, to make this system complete, what is needed is to have a practice checking account and a practice credit card. This should be in place before even one dollar is spent on the practice.
Now that the basics are in place, as your practice grows you will be able to realize benefits from having a good practice credit card. Here are the top five most important benefits.
It Expands Your Business Credit History
Lacking a credit history for your business can result in getting turned down for loans or getting disadvantageous loans. To maximize your practice growth, it is essential to have excellent business credit history. Having a practice credit card that you are managing well is part of your strategy to establish an excellent practice credit history.
You Get Access To Other Financial Services & Products
If you have a practice credit card with a provider that has a wide range of products that serve businesses, then you have a gateway to these additional products. Examples of these products would be:
Saves Times Through Technology
A practice credit card offering advanced technology does a lot of record-keeping work for you. Be sure to evaluate the technology that your credit card provider offers. When selecting the correct practice credit card, be sure to select the right technology to minimize the manual work needed to manage your finances, especially in the areas of budgeting, tax documentation and spending analysis.
Allows Delegation While Controlling Employee Spending
Delegation is a critical skill to use effectively as your practice grows. The reason for delegating to employees is so they do not need to come to you for direction on every minor decision. But this needs to be balanced with control over business finances. Make sure your credit card provider offers free employee credit cards linked to your business account, but also offers you the ability to:
o Set and adjust individual spending limits on the go.
o Get instant alerts for every purchase, so you know when and where money is spent.
o The employee cards contribute to cash back and rewards.
Earns Valuable Rewards
Another core business principle that you should seek to make sure is in place is to always make sure your money is working for you. Do not let money just sit in an account and not be working for you. A good example is a typical practice checking account that is just sitting there letting the bank use your money versus a money market checking account that is working for you while it sits there. Yes, currently money market accounts are not having a large return on investment, however, some is better than none.
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Following that principle, when selecting a practice credit card make sure you are selecting one that maximizes the rewards that are most important to you. Some rewards are cash back, some are travel, and some are gift cards. What is important to you? You need to determine this. Then, after making that determination, make sure the credit card has both flexibility and ease in redeeming those rewards.
*Photo credit, top of page: Getty Images