5 benefits of using credit cards for your business payments
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As a business owner, besides responsibilities such as driving operational efficiency, business growth, digital productivity etc, it also comes with its own set of challenges, such as balancing cash reserves, managing seasonal fluctuations, optimising working capital and pushing for company-wide digitisation.
The simplest solution to many of these challenges in fact lay in your pocket, in the form of a credit card. Most credit cards are often under-utilised. Your credit card can do wonders for your business. Here's how.
Through platforms such as CardUp, your business can make large business payments using a credit card, even in places where cards are not accepted — what this means is that your business makes a credit card payment, while your recipient receives it via bank transfer.
What payments can be made?
- Supplier Invoices
- Rent
- Payroll
- Corporate tax
- Insurance
- Car loan
- Season parking
- Electricity
- Stamp duty
- MCST fees, and more...
5 benefits of making business payments with credit cards
Here are 5 ways in which you can benefit from paying business expenses with your credit card:
- Increased cash flow for optimised growth
- Minimised operational disruption during challenging times
- More cash savings and additional rewards for your business
- Digitisation and future proofing the company
- Improve working capital by collecting credit card payments
1. Increased cash flow
- Instant access to credit
- Better growth forecasting
With payment platforms such as CardUp, you may use your credit cards for day-to-day payments such as rent, payroll, supplier invoices, even if your recipient does not accept card payments. As a result of putting these expenses on a credit line, you free up cash on hand. Better yet, the recipient does not even need to have an account on the platform to receive this payment, making it a convenient and easy way for you to optimise your working capital.
Furthermore, if you pay off the credit card bill by your bill due date, you are essentially tapping on this credit at zero percent interest! You have additional cash on hand for strategic spend and other investments, and greater capacity to focus on growth strategies and efforts.
Value for your company:
- Instant, hassle-free access to interest-free working capital
- Cash on hand can be better utilised for mid to long-term growth strategies
2. Minimised operational disruption
- Operational stability
- Better defensibility
Leveraging on your credit card also helps you deal with volatile cash flow or overcome quieter periods if your business is dependent on seasonal revenue.
Reports suggest that over 80 percent of Singapore-based SMEs do not qualify for business financing, and in such challenging times, companies also do not have the luxury of time to process most of these financing options as well.
Creates a great safety net for your business in these cases of emergencies. Since your credit cards come with ready-to-use credit, they are a fast and cost-effective way to access capital – now not only possible for smaller expenses, such as for dining, travel and entertainment, but larger expenses such as rent, supplier invoice, and more.
With CardUp, almost all business expenses can now be put on your credit card, allowing you to keep operations running even if you are facing a temporary snag.
Value for your company:
- Reduce disruption to operations and keep the lights on, even in low season
- Better defensibility against off-peak periods
3. More cash savings and additional rewards for your business
- Cheaper business travel
- Early-payment supplier discounts
Businesses who switch all payments to their credit card via CardUp, enjoy savings in the form of cashback or air miles, on payments they are already making anyway.
For the air miles earned on these big expenses, companies can also save up to 50% on their business flights, greatly reducing the costs needed for business trips!
An example of how you could fly to Shanghai or Perth on business class less than half the price:
- Jim has expenses for his business averaging S$50,000 a month when adding on his rental, payroll and supplier invoices
- By putting his expenses on his credit card which earns 1.4 miles for every dollar he spends, Jim is able to earn 858,900 air miles a year.
- With the air miles earned, he is able to redeem multiple business class return tickets, all thanks to CardUp:
| Redeem | CardUp fee spent | Savings |
|---|---|---|
| 4 return business class tickets to New York worth $38,800 | $13,500 (2.25% fee) | $25,300 or 65%! |
| 11 return business class tickets to Shanghai worth $34,700 | $13,500 (2.25% fee) | $21,200 or 61%! |
Also, by being able to pay suppliers on time – or even early – each month, companies can negotiate for early payment discounts on goods and services, leading to even more savings on these payments!
Value for your company:
- More cash savings in the form of cash rebates and air miles for cheaper business travel
- Greater leverage in negotiating early repayment discounts from suppliers
4. Digitisation and future proofing the company
- Improved productivity
- Digital payments trail
Stop spending thousands of hours each year manually processing cash and cheque payments, maintaining daily transactions, recording and monitoring accounts payables and more. Save time, manpower and costs when you shift your time-consuming, manual processes onto a digital platform like CardUp.
Your business can...
1. Schedule payments on your credit cards far in advance, or on a recurring schedule, and save countless hours each week.
2. Eliminate potential human errors in the issuance, reduce processing and reconciliation of payments, lower any chances of data errors and the costs that come with them.
3. Track and monitor all past and upcoming payments on the dashboard, and have a digital payments trail that improves the efficiency and transparency of your company processes.
Value for your company:
- Numerous hours saved per week on menial tasks, improving productivity of employees and company
- Improved payment processes with digital payments trail
5. Improved working capital by collecting credit card payments
- Get paid faster
- Save time and cost
In addition to paying for your business expenses, you can also collect credit card payments with CardUp. This lets your business accept card payments with no fees, technical setup or operational disruption. Your customers are also able to pay you with their credit cards anytime, anywhere with your customised payment page.
Your clients and customers can schedule a one-off or recurring payment so you get paid on time and you don’t have to worry about chasing overdue payments. The icing on the cake is that customers and clients can also avail benefits as mentioned above, including gaining rewards on existing credit cards for their payments to your business.
Value for your company:
- Better cash flow management by getting paid faster and more on time
- Hours saved chasing late or missed payments, as well as manually processing cash or cheque payments
Join thousands of businesses such as Far Ocean Group and The Black Hole Group, who are powering their business payments with CardUp.
Allow yourself the opportunity to place your business ahead of the competition with CardUp.
Sign up for your free business account here.