Here's How a Commercial Card Program Can Benefit Your Business

March 16, 2023
Jerry Brodnax
Jerry Brodnax

For years now, companies have been migrating from paper to electronic payments, looking to reduce costs, enhance financial control, reduce risk, increase cash flow, and create efficiencies. In addition to increasing their use of the Automated Clearing House (ACH) network, many businesses have been pursuing these goals — and improving their purchasing and accounts payable processes — by adopting commercial card programs.

For most, that’s meant empowering employees by issuing traditional cards to pay for day-to-day business expenses. Recently however, more and more companies are beginning to understand and embrace the even broader benefits of instituting electronic payables (ePayables) using virtual cards. 

The growing number of employees working remotely has made even more card companies review the ever-expanding benefits of automating their payables processes. 

Has your business remained on the sidelines in the midst of this trend? If so, now could be a great time to revisit how a commercial card program may benefit your business.


How a Commercial Card Program Can Benefit Your Business


A More Efficient, Secure Alternative

Commercial cards offer a less expensive and more secure alternative to issuing paper check payments for everything from everyday office purchases and business travel transactions to fleet expenses and vendor payments. As such, they greatly reduce the need for petty cash and personal card reimbursements, and put convenient, but controllable, spending power in the hands of employees who need it.

Cards streamline the entire procure-to-pay process, automating many of the steps associated with using traditional paper purchase orders to authorize payments and paper checks to distribute them. As a result, employees can save time and companies can redeploy accounts payable staff to more value-added work. Furthermore, businesses can reduce payment cycle time on average by a week and save up to $70 per transaction in administrative expenses by using a purchasing card system instead of purchase orders and checks, according to RPMG Research.*

As working remotely becomes more and more common, card programs have added even more value because they reduce the need for employees who work at home to go into the office to print checks, seek signature authorizations, and stuff envelopes.

Card programs also offer enhanced spending control and help protect against theft and fraud. Daily, weekly, and monthly transaction limits help reduce unsanctioned card usage, while purchases from unauthorized merchant categories can be blocked easily and in real time. Card program administrators can review purchases online, making it easy to flag any potential violations of spending policy.

Visa® credit cards offered through Hancock Whitney also provide auto rental collision damage protection, travel accident and baggage delay coverage, as well as protection in the unlikely event of employee fraud. 


ePayables Volume Multiplies the Benefits

ePayables offers a fully automated accounts payable solution that generates and applies charges to single-use account numbers — called a “virtual card” number — without the creation of actual plastic cards. Many businesses are expanding their commercial card programs to support larger-dollar ePayables transactions to maximize their card program benefits. 

Hancock Whitney’s ePayables solution helps businesses to optimize the mix of company payments and maximize card program benefits including reduced costs, enhanced financial control, better payment risk management, staff efficiencies and higher revenue opportunities as the volume of card spend grows.

Many of our clients tell us that they find that card payments can be an effective working capital management tool, and that benefit is compounded through implementing ePayables. Card-based payment systems enable buyers to pay their suppliers almost immediately — eliminating much of the transit delay associated with check payments — while improving the company's own days payable outstanding (DPO) performance. A business on 30-day terms that pays with a card on day 30 can capture the benefit of up to 30 to 55 days of additional float, due to the card’s 30-day monthly statement cycle and the standard 25-day grace period. 

Cards also provide rich transaction-level data, including supplier management reports that can help identify spending patterns with particular vendors. This added insight into transactions often proves invaluable in helping companies negotiate better discounts on purchases.

In addition, businesses can earn rebates or rewards on card transactions based on spend. By leveraging a rebate or reward program in conjunction with higher card spend driven by ePayables, some companies have even converted their A/P units from simply another overhead expense into profit centers.


Evaluate Your Card Opportunities

For companies that are seeking new revenue sources, greater financial control, and enhanced operating efficiencies, commercial card programs are paying off in a big way, and they will continue to produce more and more dividends as the modern work environment will undoubtedly continue to evolve.  

If you are considering the benefits of a commercial card or ePayables program for your business, a Hancock Whitney banker can help you assess your needs, including providing an analysis to help you identify your current suppliers that accept card payments. Simply complete the form below and a banker will contact you.


*As reflected in RPMG's 2017 Purchasing Card Benchmark Survey.

Post comments on this article

Enter your first name, email and comments below