The Value of Business Plastic
Issuing business credit cards to your staff can pay off in financial and time savings. It can also help deliver a current view of your expenditures.
Businesses of any size can benefit by issuing business credit cards to their employees, regardless of the business' size. Without credit cards, the reimbursement process is rife with paperwork, from filing expense reports to issuing checks. When using business credit cards, those processing hassles start to disappear.
Benjamin H. Stewart, vice president for Bank Card Administration at Union Bank, outlined five ways that business credit cards can help make your employees more productive and your company more efficient.
1. Manage cash flow
Here's an area where credit cards surpass debit cards. Debit cards, while certainly convenient, take the money from your checking account immediately. The general due date for credit card bills is 25 days, so depending on where in the billing cycle an employee uses the card, you may have up to 35 to 40 days in which you benefit from the purchase and still have use of your cash.
2. Track expenses online
Both you and your employees can track expenditures online, just as you would with an online checking account. You can track expenses as they occur without waiting for the monthly bill. You can also easily download expense data into a spreadsheet and then upload it into your company's accounting system.
3. Shift credit limits easily
From shopping for office supplies to entertaining customers, a business-based credit card helps employees save time and eliminates the need to have petty cash on hand. Generally, a company will receive a credit limit equaling twice their monthly spending, to make sure they have enough credit to match that 40-day window, Stewart says. "If you see that one employee has been traveling a lot and is close to his or her credit limit, you can reconfigure the limits to make sure that employee is covered."
4. Manage account parameters
You may also want to set up automatic alerts so you know when employees near their credit limits. This also lets you keep an eye on potential fraud or errors if an employee spends more than certain pre-set amounts or at unauthorized locations. Online access allows you to add new cardholders or to remove authorization for terminated employees, usually within one business day. You can also make these changes by telephone.
5. Dispute charges and receive rewards
As with personal credit cards, business credit cards allow you to dispute charges if you have a problem with a purchase or supplier. You can also reap rewards, typically one point for each dollar spent. "You can cash them in for business travel, office supplies, merchandise or for gift certificates," Stewart says. Points can sometimes be traded for travel vouchers, many good for air travel without blackout dates.
Signing up for business credit cards can bring advantages to your business that you might not have considered. They help provide a simple, convenient way to save time and money.
For more information about business credit cards, visit www.unionbank.com/business and click on Business Financing or contact your local Union Bank office.
Loans subject to credit and collateral approval. Restrictions may apply. Financing available to businesses located in CA, OR, and WA. Terms and conditions subject to change.
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