Corporate Cards: Not Just For Travel And Entertainment

Corporate Cards have been long valued by financial executives for providing utmost convenience, efficiency and control when it comes to managing expenditure. Yet, traditionally they have been restricted to employees who need to spend Company money on travel and entertainment expenses. However, this is gradually changing as increasingly companies are seeing the benefits Corporate Cards can bring when spending cash on a range of businesses expenses, including advertising, building maintenance, utility bills, legal fees and even paying vendors for their raw materials.

It makes sense for business executives who are used to using their personal cards for a wide array of expenses to put two and two together and make the most of their Corporate Cards in the same way, executives at American Express explained. It not only provides convenience to the Company and its employees, but also allows businesses owners to earn points and airmiles that enable them to access rewards that can save the operation money.

Replacing Cash Advances

Putting business expenses on a Corporate Card is a logical move for both employees and their respective employers. For staff, it means that they do not have to spend time requesting for cash advances, while it also foregoes the need to segregate expenses, which they would have to do with a personal Card.

The positive Corporate Cards bring employers are, however, even more significant. Card payments allow businesses to lower the levels of cash they have tied up in working capital, while also helping to boost cash flow and minimising or entirely removing cash advances. What's more, with Corporate Cards being entirely electronic, the paper wastage of traditional invoices is reduced and processing is much quicker, which drives down overall transaction costs.

Extending Payables

Corporate cards can be used to extend the point at which a Company has to pay off an invoice, helping to reduce the money tied up in working capital and allowing for better cash flow management.

For example, a Company may use its Corporate Cards to pay suppliers for their goods. The invoice will give a deadline for when the vendor must receive payment, which is typically around 30 days. When the due date comes around, the Company can use their Corporate Card to pay the bill, meeting all obligations with the supplier. However, they will have up to another 51 days before they have to pay off the card, doubling the amount of time before the order comes out of the Company account.

Controlling Expenses

Corporate Cards are very helpful when it comes to controlling Company expenses. They enable business owners to set spending limits on specific cards or only allow them to be used with specific vendors. Meanwhile, the finance department is able to easily keep track of how money is being spent through reports provided by the issuer of the Card, allowing them to analyse expenditure and group it together based upon department or project. This can all be done online to provide easy and simplified access.

Altogether, this ensures that finance executives have complete control over how their employees spend money, preventing misuse of Company accounts and allowing for in-depth analysis to discover areas in which purse strings can be drawn tighter.

What's more, when businesses use the same Corporate Card repeatedly for everyday purchases with vendors, they may find they are able to secure discounts. Not only will it boost loyalty, but suppliers prefer to be paid via Card because it means they do not need to worry if and when they will receive the money, giving them the confidence to offer deals on the products and services they sell.

Some issuers of Corporate Cards also help to facilitate trade with overseas firm by giving customers the option to bill and pay in the local currency of other countries, while also offering localised customer service and features.

This array of features and benefits ensures that Corporate Cards easily pay for themselves, pushing the payment above and beyond its traditional remit as a vehicle for travel and entertainment expenses.

That’s a sentiment shared by more Corporate finance executives who have learned that Corporate Cards aren’t just for travel and entertainment expenses anymore.