How to simplify your tax-time finances with a business credit card

Posted: 1 July 2019 1:00 pm News

Man with credit card at desk Image: Getty Images

Remove some of your tax-time headaches using a business card.

For most businesses, lodging a tax return can be a time-consuming and frustrating experience. If your business has undergone significant changes or you've simply been unable to stay on top of your accounting, it can be a nightmare to calculate your revenue, expenses and deductions.

As with many business operations, the devil is in the detail when it comes to tax. The better your preparation and reporting throughout the financial year, the less painful the tax process will be. Luckily, there are ways to get your business ready for tax time and even streamline the reporting process ahead of your business activity statement (BAS) or tax return lodgement date.

Businesses looking to get the most bang for their buck come tax season should consider a business card, which can work as a one-stop shop for preparing, reporting and even paying your tax bill.

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Improve your tax reporting

By using a business card to cover all applicable business expenses, you can make the reporting process as straightforward as possible when it comes time to lodge your return.

Your card statements will also provide a detailed overview of all expenses. Some cards allow direct importing of statements into accounting software packages such as MYOB or Quicken; others will let you export data in a format those packages can read. This removes much of the painstaking manual reporting that can cost businesses crucial time.

Manage your expenses

A business card also offers a way to easily manage employee spending and business expenses under the same umbrella, and subsequently can be used as a simple but effective way to track and manage business cash flow over the financial year. You can add additional cardholders to your existing account, giving you the ability to track and manage employee expenses in one convenient location.

Benefit from expert advice

Some card providers offer dedicated account managers that can help answer your questions around finance and working capital, and may be able to provide valuable insight into how to manage your accounting and prepare your business for tax time.

Using your card to pay your tax bill

The ATO allows individuals and businesses to pay their tax on card and this brings with it other potential benefits. There are currently three ways to use your card to cover your tax bill. These are:

  • Using the secure Government EasyPay online service
  • Through your myGov account, if you're a sole trader
  • Making a BPAY payment with an applicable card

By using a business card to pay your tax bill, you can potentially free up additional cash flow by taking advantage of any interest-free periods offered on the card. Providers such as American Express offer up to 55 days to pay for purchases, so you can open up this capital to grow or consolidate your business in the meantime.

Some business cards even allow you to earn reward points on any ATO transactions related to your business tax, although it's worth considering the cost of any card payment fee before paying via card. You may also be able to claim your annual card fee as a tax deduction.

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