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Now is a good time for your business to transition to a commercial card program

June 11, 2020
Aaron Whitely
Aaron Whitely

The impact of COVID-19 is forcing businesses to look at new ways to conduct daily activities. Now is the time to consider ways to streamline and automate payment processes that often require you to be present in the office. If you are still manually processing invoices and payments through checks, wires and ACH, who is in the office to approve and manage?


Now is the time to transition to a commercial card program


We will all do business differently going forward. Many businesses like yours are transitioning to a remote or virtual workforce, if not full time, at least part time. Whether it be a natural disaster like a flood or hurricane or other act that interrupts business as usual, it’s time to transition to a commercial card program.


From greater control over spending to administrative cost savings to improved working capital management — commercial card programs offer an array of benefits.


Commercial Cards Aid Working Capital for Businesses

Card products offer a valuable float benefit that enhances working capital management by maximizing accounts payable cycles. While the vendors you pay with a card receive good funds almost immediately, your company doesn’t have to actually relinquish any funds for up to 55 days, depending on when the transaction occurs. In addition, from a working capital perspective, companies can benefit from maximizing spend on their cards through rewards or rebate programs that their issuer may provide.


Automate accounts payables

Expanding your card program to address payables can provide even greater insight into spending. Unlike other payment alternatives like checks and Automated Clearing House (ACH) transactions, cards can provide line-item detail on purchases and the remittance information comes in a variety of file formats.


According to Accenture, overall commercial card spend is expected to grow by 73% from 2019 through 2024. This growth is driven by an increase in vendor payments on purchasing cards.


Using cards for payables can also produce significant cost savings. On average, companies can save $70 per purchase by paying for goods and services with a card rather than using traditional paper-based purchase order processes, according to RPMG’s 2017 Purchasing Card Benchmark Survey.


Furthermore, Visa® research has shown that by using a card instead of traditional payment methods, companies can reduce payment cycle time from 7 days on average to 2.9 days, significantly curtailing employee time spent on processing payments.


Creating an environment of deterrence

Most card providers also have an online account management system that allows companies to maintain cards as well as view detailed transactional information to gain insight into exactly when and where the cards were used. The transparency afforded by a centralized T&E program helps combat duplicate or other fraudulent transactions that can occur more easily with employee out-of-pocket transactions.


Want to learn more?

We’d love to show you how Hancock Whitney’s commercial card services can simplify your company’s payment process. Contact your banker today.