It’s become more common for small businesses to include commercial card acceptance in their RFPs these days. On the surface, they look like any Visa® Card. But under the hood, they offer financial security, and efficiency benefits that no payment option can match. Benefits you need in today’s environment.
1. No-Cost Working Capital
With inflation and interest rates both running high, business owners need all the low-cost working capital they can find. Commercial cards fit the bill. And then some.
If businesses pay the bill in full at the end of each billing cycle, there’s no interest on purchases. It’s like having a no-interest line of credit. The way some commercial cards work (like PEX), your account is a no-interest, no-fee line of credit.
Commercial cards add working capital without adding the burden of fees or interest charges.
2. Vendors Get Paid on Time
Vendors have become more willing to accept commercial card payments. There’s no waiting for checks to arrive in the mail. No concern that they may be stolen in transit.
Payments clear about as quickly as they do with ACH but are quicker to reconcile. Vendors get one notification that includes payment date, account, amount, and remittance information.
Vendors can reconcile a commercial card payment in 1/10 the time it takes to record, endorse, and deposit one check. And in less than half the time it takes to cross-check an ACH deposit.
3. Earn Interest on Your Accounts Payable
Despite the rise in interest rates, many commercial checking accounts still pay virtually nothing on deposits. For that reason, it makes sense to keep cash in higher-yielding accounts and fund checking accounts as needed.
These transfers are a lot easier with commercial charge cards. Generally, all of a company’s cards in circulation are on one account. With one monthly bill. So, you only have move funds to pay for all your commercial card spending at the end of each billing cycle.
Suddenly, accounts payable departments become a profit center. Imagine that.
4. Earn Cashback Rewards on Commercial Card Charges
Speaking of profit centers, many commercial cards (including PEX) offer rewards for purchases made with their cards. In our case, it’s a straight 1% on qualifying purchases*. Virtual card purchases (see below) also earn 1% cashback.
Commercial cards add to your bottom line.
5. Virtual Cards Make Payments More Secure
Many commercial cards (including PEX) offer virtual card options. Virtual cards work like physical cards, but there’s no plastic to get lost, stolen, or misused.
You can create a virtual card for a vendor or transaction in seconds. You can also add customized spending rules, including spending limits and category restrictions, to match your needs for that vendor. Again, it only takes a few seconds.
Then, even if a cybercriminal gets their hands on virtual card information, they’ll have a hard time using it. You receive an alert when a charge is rejected, so you can immediately freeze or cancel the card.
That’s quite an advantage over checks and ACH. Stolen checks or ACH fraud can sometimes take days to discover, leaving your business with a shortage of funds and a burden of proof to recover them.
6. Virtual Cards Are Easy to Replace if Compromised
As we said, you can create a virtual card and set spending rules in seconds. That’s also about all it takes to cancel a compromised card and generate a replacement.
A replacement physical card could take days to arrive.
More important, the compromised account only affects one vendor. You don’t have to change payment information with all your vendors.
7. Commercial Cards Bring New Efficiencies to Your Financial Operations
Along with spending rules, some commercial card vendors’ systems (including ours) integrate with major accounting software programs. They let users capture receipts and report accounting codes at the point of purchase. The system immediately queues them up for one-click reconciliations.
Approvals are easy because you set transaction limits and rules in advance. Some companies report that this modernization delivers 90% efficiency gains and more in their accounts payable process.
8. Modernization Without Disruption
In many finance departments, modernization might as well be a four-letter word. It suggests a wholesale rip-and-replace upgrade with high costs and lost productivity. Not so with commercial card deployment.
For one thing, you already know how to use charge cards. For another, cards and accounts can be provided at no cost.
But more importantly, commercial card interfaces can be more intuitive – and have more fail-safes and fraud protections – than some online banking portals.
You can create a virtual card and set it up for a vendor faster than cutting and mailing one check. And just like with ACH, you can log into your dashboard and set the amounts and times you make your payments.
Your business gets all the benefits of modernization, plus greater security and extra working capital — with a near-zero learning curve and minimal changes to your processes.
9. Up to $75,000 Working Capital with No Personal Guarantees
The PEX commercial card program, PEX Credit Expense, gives you working capital and all the above benefits with just a 90-day look back on your business checking account. No personal credit check¹ or guarantee is needed.
You get a non-revolving line of credit and the ability to generate as many PEX Visa® Commercial Cards as you need, including unlimited free virtual cards. (The first 250 physical cards are free.) You get all the spending controls and accounting system integrations PEX has to offer, plus 1% cashback on PEX Visa® Commercial Card purchases. You can learn more and ask questions about your business needs during a complimentary demonstration. Schedule one today here!
¹This is not a credit card.
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