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Can you use a business credit card to manage cash flow?

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    Managing cash flow can be considered a critical part of running any small or midsize business. It may not be the most difficult thing you manage as a small-business owner. However, it's certainly more complex than the wisdom of that old expression: "you have to spend money to make money."

    Business credit cards may be popular for any number of reasons, such as perks that come with airline affiliations and rewards programs. Can a business credit card be used to help manage cash flow, though? Let's take a look.

    What is cash flow?

    Cash flow refers broadly to how money flows into and out of a company, usually over a set time period. Positive cash flow is when the money coming in to a business exceeds the money going out. Negative cash flow is when the opposite happens: money out exceeds money in.

    Positive cash flow for a business is often what you'd expect: positive, useful, advantageous. It may allow a business to pay expenses or debts, consider raising salaries or invest in growth or new opportunities.

    Negative cash flow, on the other hand, may challenge a business in various ways. In some cases, negative cash flow could eventually lead a business to fail.

    How can I use a business credit card to manage cash flow?

    There are several ways a business' cash flow could be managed effectively by using a business credit card.


    Credit cards are known for being tools to finance purchases. For a business, expenditures could be charged to a credit card rather than using available cash. Depending on when the minimum payments are due, financing expenses with a business card could help maintain cash reserves.

    In addition, business owners may be able to plan their required card payments strategically based on cash flow. As with any credit card, however, it's important to make at least the minimum payment due by its due date each billing cycle.

    Using business credit card rewards

    You may earn rewards when you use a business credit card for expenses. You might already have a good understanding of revenue streams, recurring monthly expenses and the collective impact on your bottom line. Knowing these aspects of your business may help you design a strategy to earn and redeem your credit card rewards in ways that are most advantageous to the categories you most frequently spend in.

    Business card rewards programs can be very diverse and have several advantages in the context of managing your cash flow:

    • The variety of redemption options may be useful to a business in unique or specific ways, such as redeeming rewards for cash back.
    • If your business requires traveling, you'll find that some business credit cards allow you to redeem rewards points as dollars, which you can then use to purchase your travel needs. In this way, you may not need to tap into cash to book your business travel.

    The bottom line: Will the benefits of business credit cards help my cash flow?

    Certain benefits of a business credit card may help business owners manage cash flow effectively.

    Business cards can be used to finance expenses and earn rewards. With a good understanding of revenue and expenditures, financing may help manage cash flow.

    In addition, credit cards can help make budgeting and accounting easier through a spending category breakdown within their associated mobile app. These often categorize transactions and may help to organize your spending into categories that are clear and actionable.

    All things considered, managing cash flow with a business credit card can be a delicate balance. When considering a business credit card for your needs and goals, there are several things you may want to look for.

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