For most practice spending, I'd use a business credit card and pay it in full every month. It keeps your checking balance steady, gives you better protection on disputed charges and makes your records easier. A debit card works too, as long as it's tied to a practice account and only used for the practice.
Why a credit card often works better
- Your cash stays in checking until the statement is due, which smooths out the month.
- Disputing a wrong or fraudulent charge is usually easier, and the money isn't gone from your account while it's sorted out.
- One monthly statement makes it easy to match charges to receipts.
- A business card in the practice's name helps build the practice's own credit.
When debit makes sense
If you're likely to carry a balance, debit is safer. Card interest adds up fast and erases any rewards. Debit also works for owners who want every dollar to leave the account the moment it's spent.
A made-up example
Say you put $4,000 of supplies and software on the card in a month and pay it in full. You pay no interest, and your checking account keeps that $4,000 for about a month longer. Now say you carry that $4,000 at 24% a year for six months. That's roughly $480 in interest, for the same supplies.
Rules I'd keep
- Practice cards for practice costs only. No personal charges. Here's why that matters.
- Pay the full statement balance from the practice account every month.
- Set up autopay for at least the full statement balance, so a busy week doesn't create a late fee.
- Give staff their own cards with limits, instead of sharing yours.
- Save receipts as you go.
How it shows up in your books
Each charge is recorded as the expense it was for, on the day you made it. The monthly payment isn't a new expense. It moves money from checking to pay down the card. Your bookkeeper reconciles the card to its statement every month, the same as checking. Here's what that means.
Watch the fees
Some business cards carry an annual fee, foreign transaction fees or fees for cash advances. Read the terms and pick a card that fits how the practice spends. If you rarely travel and spend modestly, a no-fee card is often enough. If you choose a card with rewards, make sure you'd still pick it if the rewards went away, because paying the full balance every month matters more than the points.
What I'd do this week
- List every card used for practice spending, including any personal ones.
- Move practice charges onto a practice card.
- Turn on autopay for the full statement balance.
- Send your bookkeeper access to the card statements.
Common questions
Do card rewards count as income?
Ask your CPA how your rewards should be treated. Your bookkeeper records them the way your CPA wants.
Should I use my personal card and reimburse myself?
Only now and then, with receipts. Regular practice spending belongs on a practice card.
Does a business card affect my personal credit?
Many business cards require a personal guarantee, and some report to personal credit. Read the terms before you apply.
Want every card reconciled every month?
We reconcile every account every month and send your P&L and Balance Sheet by the 15th, so decisions like this start from real numbers. If that's what you need, apply to work with us.