Effective April 12, 2021:
Clinton Branch Lobby on Hall/Groesbeck Roads will be by appointment only until further notice; Drive-thru available
Chesterfield Branch Lobby will be by appointment only April 13 thru April 16; Drive-thru available
Rochester Branch Lobby will be by appointment only April 13 thru April 16; Drive-thru available
Washington Branch Lobby will be by appointment only until further notice; Drive-thru available
To find other FSB locations, please visit www.fsb.bank/branches.
By Tom Snapke
While most companies pay their employees electronically, when it comes to their own bills, many are still writing checks. Although personal credit cards are commonplace among American consumers, many companies strictly use credit cards for employee travel and entertainment expenses and do not take advantage of business credit cards to pay for things such as utilities and supplies and to settle accounts payable.
Corporate credit cards are a useful tool for companies both large and small and should be an important part of any cash management plan. Companies can simplify cash flow, lower costs, earn rewards and discounts from credit card companies, all the while protecting themselves through banks' strong security controls.
Both large and small can take advantage of corporate credit cards.
Checks are still the most common form of payment for bills. Some companies are hesitant to use company credit cards because they fear a loss of control over spending and/or they do not quite trust employees to carry company cards. A small number of small businesses actively use business credit cards as a primary form of payment while most still use checks. Today, however, companies are looking for efficient ways to spend and are expanding their use of credit cards. A recent MasterCard study reports that more than half of small businesses in the United States now use a credit card for financing but checks remain the leading payment method.
Business credit cards can drive automation and efficiency by simplifying the payment cycle and improving cash flow and forecasting. The use of business credit cards can also reduce the expenses incurred from paper.
Larger companies can integrate business credit card expense data into enterprise resource planning systems and use tools to analyze spending patterns. This information could identify key suppliers, thus creating an opportunity to negotiate better terms for high-volume purchases. Credit card companies also typically provide a year-end statement summary with transactions itemized.
Many credit card companies also offer rewards and rebates that can add up to meaningful savings and discounts on business services. Reward programs, specifically frequent flyer miles, have become a major factor in the decision of businesses to use credit cards. Other reasons included no annual fee, the ability to separate business and personal expenses, special discounts, rebates or cash back programs.
Ease of use also wins over many companies. Credit cards are accepted worldwide and can be tied to automatic bill payments for utilities, subscriptions, and other business services. Goods can be delivered more quickly because payment is expedited, credit cards can help businesses maintain a clean divide between personal and business spending.
Business credit card use increases control, tracking and security of payments through zero liability policies, fraud protection services, extended warranties, travel assistance and 24/7 customer service, and programs can be tailored to set employee spending limits, vendor restrictions and other expense controls.
Many credit card programs offer special benefits, including rewards tied to office business travel or rebates that help with business cash flow including special programs that make it easier to track expenses. It's important to match business needs with credit card features.
Apply the same level of responsibility as the rest of your business to credit card management. For example, consider applying for business credit cards at your existing financial institution, which may aid with approval. Limit the number of types of cards, as card hopping can have a negative impact on your credit rating. Take advantage of the 21-day grace period on most business credit cards before paying. Save time by paying online. Don't use the cash advance feature that can lead to credit card fees and interest costs. Finally, pay on time to avoid late payments that result in fees and higher interest rates.
A comprehensive cash management strategy should integrate a business credit card program which can help save time, money, earn benefits and empower employees.
Tom Snapke is a First Vice President and a Certified Treasury Professional (CTP) at First State Bank. Reach Tom at 586-445-4849 or email@example.com.