Winning at the Commercial Card Game
By Chase Commercial Banking
Commercial card programs are fast becoming the preferred payment method for all types of business transactions. They provide a cost-effective way to better manage working capital, streamline operations and gain greater control of procurement and travel spend. The card you choose to meet your cash management needs can help you gain a winning hand.
You have many options: purchasing cards (P-cards), corporate travel and entertainment cards (T&E cards), one cards, debit cards and/or single-use card accounts (SUAs).
P-cards are an Easy-to-use Solution
By combining payments and financing, P-cards can be a great tool for managing supply chain finance without giving up control or convenience. P-cards can help automate payables and replace paper checks. By using P-cards to settle transactions with card-accepting vendors, you can:
- Decrease costs, from an average $89 for each traditional purchase order to $19 for each P-card transaction.
- Lower the average procure-to-pay cycle time from 11.4 days using the traditional purchase order process to 3.6 days, a reduction of 68 percent.
- Increase spending under management to grow rebate potential.
- Leverage float and/or early pay discounts.
- Negotiate more favorable supplier discounts based on P-card spend data.
- Streamline controls and compliance policies for spend monitoring.
- Avoid late fees.
This relatively low-tech solution is easy to use and implement compared to other more involved solutions. Most suppliers accept P-cards, making it easier to automate payments and create an audit trail while eliminating the need for a large number of checks. When combined with the ability to integrate data with reporting tools and systems, P-cards make a lot of sense.
T&E Cards Help Track Employee Expenses
Looking for resourceful methods of monitoring and controlling employee travel and entertainment expenses? Opt for T&E cards to help you:
- Provide convenience for employee travelers.
- Improve process efficiencies.
- Receive rebates and other incentives from the card issuer.
- Obtain better spend data to enhance negotiating position with vendors.
- Promote compliance with travel policies.
- Integrate card spend data into accounting systems.
Advances in technology and the expansion of benefits and services, such as travel-related insurance and upgrades, add value to the T&E card.
Focusing on Single-card Solutions
If your organization uses multiple card programs to cover purchases in different spend categories, you may encounter complex control and compliance policies. Offering your administrators, procurement managers and A/P managers a flexible web-based solution can streamline the accounting process without compromising analytical flexibility or control.
Research commissioned by Visa® found that organizations favor Commercial One card programs for their:
- Efficiency of card management and administration
- Integration of card spending data into the financial accounting system
- Enhanced reporting and application of spend data to negotiate better terms with vendors
- Increased transaction visibility and control
Debit Cards Deliver Flexibility
Debit cards enable you to manage a variety of disbursement programs and expenses through flexible controls, online functionality and data that integrate with most accounting software. You can transform payroll, benefits delivery and daily commerce into cost-saving paperless transactions.
Debit cards reduce administrative time for distribution and reconciliation of multiple checks while minimizing the risk of check fraud. They can even help the "unbanked" segment of your workforce get paid. Reloadable debit cards provide a solution that is safer, faster and less expensive than cash and checks.
SUAs are Ideal for Large Transactions
An SUA is a versatile electronic payment tool that eliminates the need for a physical card. It's the ideal solution for large transactions that normally require a paper check. SUAs allow you to customize a single electronic card for each of your payments. This one-to-one match of card accounts to payments gives you powerful security and antifraud control over your payment process. It also facilitates the automated matching and reconciliation of transactions.
Even though suppliers are paid immediately via SUAs, you do not have to settle immediately. This frees up your cash and improves your working capital by leveraging the accounts payable float. Additionally, you still have the potential to earn rebates on every dollar spent.
Chase Can Help
Whether your situation calls for launching a new card program or enhancing and optimizing an existing one, Chase can help. We'll work with you to design, implement and support your card payment plans and help you manage and control spending while reducing risk exposure and meeting all compliance requirements.
To learn more about how Chase's solutions can help you,
please contact us or call your Commercial Banker.