Letter: Advanta Closing All Business Credit Cards


Image by BrettMorrison
This is the letter received today from Advanta announcing the closing of all business credit cards at the end of the Month. According to the Consumer Affairs blog, Advanta was having horrible losses.

You can actually read the letter text in the LARGE size photo.

The main problem of course is all the bills that are set to auto pay. I don’t have another business credit card to pay them. Therefore, I am forced to intermingle business and personal expenses which is a VERY BAD thing from a liability perspective since is it a method used to pierce the corporate veil. I’ll have to see if bills can be paid via check until we can sort this out.

And what is up with the auto white balance? That letter is supposed to be white! Proof once again why you should always shoot in raw.

Some Credit Score Basics

Do you know how your credit score is calculated?

I am amazed at the number of people I talk to that do not understand that the calculation of your credit score is more than just paying your bills on time.

While that is certainly a major part of your score, there are 4 other factors that you need to keep in mind in order to maintain the best credit score possible.

There are several scoring calculators out there but the one that is the most utilized is the FICO score. The Fair Isaac Company, FICO for short, has only in the past few years released the parameters that they use when calculating the ‘FICO’ score. This number is used to decide your credit worthiness when you are applying for loans of any kind, so use this acronym to remember the five parts of your credit score:

L -  Late payments – ALWAYS PAY ON TIME

O – Owed vs. Credit Limits – KEEP THIS AT 35% OR LESS

A – Average age of all your credit cards – DON’T CLOSE

      OLD CARDS

N – New applications for credit – NO MORE THAN ONE

      EVERY 4-6 MONTHS

S – Spread – KEEP A GOOD SPREAD OF TYPES OF CREDIT

 

Okay, so I was reaching for that last one, but the idea there is to have both revolving (credit cards) and installment (mortgage or car loans). I don’t mean that you should go out and buy a house or car just to get an installment loan, only that the FICO algorithm does take that into account. The stability implied by these types of loans makes you look more reliable.

The first two categories above (L & O) account for 65% of your score.

Building credit takes a long time but you can ruin it quite quickly so keep the above factors in mind the next time you are tempted to pay late or run up that credit card to its limit.

This is hkbecky’s video, Imagine what it would be if you could hear cats talking…. ps this is not my video…just my voice over. I give all video and cat credit to hkbecky at www.youtube.com

Day 573 / 365 – How to fix the credit crunch


Image by xJasonRogersx
Day 287 / 366
Monday
I’m working on a plan to fix the credit crunch and prevent a world wide recession. Basically it involves me buying a couple of new lenses, a flash and a new bike and lots of other goodies. Yeah, something like that anyway.

8 Reasons to Use a Business Credit Card

Credit cards are fast becoming a business necessity. They’re flexible, easy to use, convenient and offer users the ability to make purchases instantly, anywhere in the world.

We’ve spent some time analysing credit cards aimed at businesses and have put together a list of our top 8 reasons to use a company credit card.

Easy tracking of expenses and purchases – Using a credit card for business purchases makes it easier to track expenses. The majority of credit card providers offer comprehensive expense reporting (both online and off) which can save you countless administration costs and a lot of hassle.
No more petty cash – Petty cash used to be the most popular way to pay for small, incidental purchases but the days of the petty cash tin are well and truly over. These days it’s more common for companies to make purchases online or over the phone. Providing key staff members with a credit card that’s attached to a business account means you can make instant purchases and reconcile expenses quickly and easily. 3. Rewards and incentives. The majority of business credit card programs offer rewards and incentives for users. Organisations can save money on a variety of goods and services from petrol to air travel, insurance and other professional services.
Build business credit – One of the most important reasons for applying for a business credit card is to build your business credit. This will come in handy if you need to take out a business loan in the future. Responsible use and a consistent payment history will be great assets to your credit rating.
Separate business and personal finance – If you’re a small business owner you’ll know how important it is to separate business and personal finance. Having a business credit card will help with this division and will come in especially handy around tax time. Remember to keep your accounts separate and don’t be tempted to make personal purchases on your business credit card (or vice versa).
Large purchases or unexpected expenses – There may come a time when you need to buy supplies, make a one-off payment or pay a large bill. Business credit cards help you to make these one off payments quickly and are more convenient than applying for a business loan.
Embrace the quiet times – Cash flow is a major concern for all businesses and even more so if you have employees or creditors that rely on your payments. A business credit card can help you cover the quiet times and the seasonal lulls.
Say goodbye to cash – Having cash on-site or carrying it around with you is not a good idea. Business credit cards reduce the need for ready cash making your business less of a target for theft or loss.

If they’re used responsibly, business credit cards can help you run your business better and even save you some money.

Basics Of Small Business Accounting

Accounting is a key function of any business-big or small. Good accounting practices are necessary to maintain an accurate set of books which in turn are necessary for taking business decisions, raising capital or bank loans and of-course for knowing how much money your business is making!.

 

Getting the accounting right for small businesses is all about doing simple accounting things well every time. These practices can be easily implemented by most business owners. Some of the key things are:

 

a. Keep all business and personal transactions separate. Use a business card if possible, to segregate business transactions.

 

b. All sales are deposited and that all expenses are recorded in the business checking account or on a business credit card.

 

c. Book even cash-receipts from customers. Ideally store all the cash in a drawer and reconcile the account at-least once a month (if not weekly)

 

d. Track personal funds used to pay company expenses or vice-versa through one account. Track reimbursements to owners also through this account. This helps in clearly identifying what money has been spent by you on business transactions

 

e. Reconcile all bank and credit card accounts-monthly. This is a highly recommended practice as its benefits go beyond just good accounting. When your bookkeeper/you reconcile books, you get a clear picture of how funds move in-and-out of your bank account.

 

f. As far as possible, track all bills under a proper expense account. Always right the nature of the expense in memo.

 

g. Clear tracking of expenses can save a lot of money in taxes as many expenses may be deductible. Your tax-preparer or CPA will not be able get you those benefits if can’t see them booked in right accounts or atleast with enough detail in memo.

 

h. Simplicity of small business software like QuickBooks has made many small business owners to do their accounting themselves. This is not a good idea as without the basic accounting knowledge, it’s easy to make errors like treating a liability as an expense. For e.g. I see many small business owners books loan repayments as a expense without separating the principal and interest components

 

Accounting for small business is not rocket science; it’s about being systematic and detailed. The starting point is to set in good accounting practices. These are best done by using a professional accountant or bookkeeper. Today, small businesses can access qualified and efficient accounting talent not available locally. Your accountant no longer needs to be present in your office or physically meet you. He/She can be in another part of the country or even outside the country!!

 

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Image by Dan Patterson

Accounting for Freelancers

When you start out as a freelancer, the accounting requirements are usually pretty simple. You know your expenses and how much you are earning. However, as your business starts to grow so do your expenses and earnings, so it would be a good idea to take a look at software for accounting to take care of all your bookkeeping requirements.   Good accounting system software will help you keep track of your expenses and who owes you money.

Accounting Plan

The accounting plan for your business will take into consideration the following factors:

•    Will you hire an accountant to handle your money matters or would you purchase accounting software?
•    What type of bookkeeping system will you use?
•    What kind of business bank account would you open?
•    Will you use a business credit card? How will it be used?
•    How often do you plan to send out the invoices and what are the terms of payment?
•    What type of system will you use for filing receipts and recording deposits?

If your business has just started, you might not want to spend money hiring an accountant. What you can do is seek out advice on proper ways to set up your books. If the money is really tight, you can do the basic accounting yourself. Just collect all the receipts and paid invoices and remember to update your ledger on a weekly basis. Then at the end of the year you could hand over your ledger, receipts, and paid invoices to an accountant.

The major problem with doing the accounting yourself is that you would not know until the end of the year how your business is performing. You might be under the impression that you have been making a profit, while in reality you are taking a loss.

Accounting System Software

What you can do is invest in software for accounting to keep track of all your finances. Accounting system software will not only help you save time and money, but will also give you an insight into the true picture of your business.

Take A Class To Help You With Basic Accounting

There are many of us who do not know anything about accounting. Terms like cash flow, credits, debits, financial statement, etc. confuse us. It’s a good idea to join a class that would help you learn the basics about accounting. There are many simple accounting software programs that deal specifically with accounting for freelancers or small business accounting. Understanding the basics would help you maintain your bookkeeping the proper way.

Overall, without a proper accounting system in place, your business cannot expand. So setting up an accounting system should be your topmost priority.

Mariela Perez-Simons, provides  SEO (search engine optimization), Internet marketing, website design, and website translations in the Greensboro / High Point / Winston Salem area.
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We recommend Merchant’s Mirror accounting system software, the next evolution in accounting for many businesses. It breaks the mold of traditional accounting systems and challenges what we usually think of when we refer to bookkeeping software.

Credit Card Services and Business Loans for the Small Business

To achieve financial independence, experts encourage even currently employed individuals to consider entrepreneurship. Setting up your own business, no matter how small, is touted as one of the best ways toward building the foundation for wealth. Those who are concerned about having a safety net need not take the plunge recklessly. One can start setting up a small business even while employed.  

Of crucial use to small businesses are credit card services and small business loans. The entrepreneur needs to know how to avail of these tools and how to effectively wield them for maximum business growth.

Credit Card Services

A small business would do well to get reputable credit card services in order to prosper in the current business climate. Availing of credit card services will enable it to accept both credit card and debit card payments. This is true either for brick-and-mortar businesses or internet based online businesses. After all, most consumers nowadays routinely use credit cards or debit cards for payment purposes. It only makes good business sense to be well-equipped for the needs of credit card users and debit card users as well as for the needs of customers who pay in cash.

Merchant services provide credit card services covering a wide range of solutions for the processing of credit cards and debit cards as payment options. These credit card services include traditional terminal equipment at point of sale, where credit cards or debit cards are swiped. It also includes software and high speed IP solutions for both traditional commerce and e-commerce. Credit card and debit card payments can, therefore, be accepted in person or through the internet, by phone or by fax.     

Small Business Loans

Any business – whether a small start-up business, a medium-scaled one or a big business company – will be needing an infusion of additional capital sooner or later. Additional capital is always needed for expansion, additional inventory, additional manpower, new systems, new equipment or a new physical layout.

Capital is not always easy to come by, though. The original investors’ personal coffers may have been emptied by the earlier outlays. Prospective investors may not be keen on shelling out funds in times of crisis. Businesses, therefore, have no choice but to seek business loans.

Getting business loans is a difficult process. Even small business loans are not readily approved. Be prepared to present a lot of documentation and paperwork. For small business loans, the proprietor’s personal credit history is taken into account and related references need to be submitted. Of course, the company’s financial statements are just as important in proving the feasibility of the business and its capacity to repay its business loans. Having a detailed business plan will show your business strategies and projections, demonstrating your business acumen.

Unfortunately, even with all the requirements completed, applications for business loans – including small business loans – are, more often than not, disapproved.

Solutions

Some merchant services provide a comprehensive solution for the needs of small businesses in relation to credit card services and small business loans. The set up is elegantly simple. A small business need only avail of the company’s credit card services to be eligible for merchant cash advances. These cash advances are actually small business loans, except that there is no need to go through the complicated application process for business loans. Repayment is made very easy and worry-free, too. A certain small percentage is built into the credit card processing rates to take care of the advances. This way, repayment is actually done automatically in a very affordable manner and according to income flow.

Small business owners would, indeed, be wise to look into these timely business solutions.

Music video by Yung Berg performing The Business (featuring Casha). (C) 2008 SONY BMG MUSIC ENTERTAINMENT