How Does Corporate Card Usage Catalyze Scalability
Growing customer demand is a good sign for a company’s future. However, it can be challenging when a company can’t keep up with this demand. This is when businesses need to ‘scale up.’
While there are different meanings associated with scalability for each company, largely, scaling up means expanding a company’s operations to meet higher customer demand. It involves adjusting how the company works internally to produce more goods or services. Adjustments could mean hiring more staff to increase customer support services, upgrading technology systems, or streamlining production processes.
Yet, all of this has to be done without compromising existing financial performance. A corporate card is a financial tool that can help businesses achieve this goal.
Corporate cards work like credit cards but are only available to businesses. Businesses can distribute these cards to employees in either virtual or plastic card format, saving employees from the complex reimbursement process.
Corporate cards can help ease financial monitoring during the upscaling phase. Below are some aspects where corporate cards come in handy.
1. Expense management
Corporate cards simplify the expense management process by automating expense tracking. This happens mainly because the need for manual receipt management is eliminated. Growing businesses can delegate more financial authority to employees by issuing corporate cards, so minor time-sensitive purchases can be made without undergoing rounds of approvals from those higher up.
2. Financial visibility and reporting
Scaling requires clear insights into financial operations. Corporate cards can offer real-time data on cardholder spending patterns. Up-to-date financial visibility of financial activities across departments can help businesses react quickly to changing circumstances.
Moreover, as transaction volumes would increase during the growth phase, manual expense categorization would become impractical. Some corporate cards come with intelligent systems that automatically categorize expenses, saving time and reducing errors.
3. International transactions
Suppose there’s a cybersecurity company that operates on a small scale in a neighboring country. A cyberattack in that country could lead to an increase in demand for their products. To capitalize on this market opportunity, the company would have to expand its operations by getting more software service providers. However, an issue could arise during the payment phase when the currency exchange fees come into the picture. The company may end up spending more or miss out on important trades due to delayed payments. Corporate cards can help reduce complications associated with currency exchange and foreign transaction fees. Multi-currency corporate cards can be issued to employees based abroad so they can make quick purchases on behalf of their company.
4. Fraud prevention and security features
Advanced security features on corporate cards help protect companies from fraudulent activities when transaction volumes increase during rapid growth phases. Access and spending limits can be set on corporate cards so stakeholders can decide who can spend and how much on different purchases. Vendors can also be selected to ensure that only authorized suppliers provide the goods.
Additionally, Corporate cards can be used to enforce company expense policies automatically, reducing policy violations and the need for manual oversight.
5. Rewards and cashback programs
Many corporate cards offer rewards programs, providing companies with additional value on their necessary expenditures. At a glance, this may not look significant. However, when viewed in the context of bulk purchases, every penny saved compounds. The amount saved can be reinvested into growth initiatives.
6. Faster reimbursement processes
During crucial growth phases, it’s important to prioritize different operations within the company as essential and less essential. For many businesses, reimbursements usually fall in the latter category. While this is necessary, significant reimbursement delays can lead to employee dissatisfaction and lowered morale.
Considering this, there should be no doubt on why corporate cards should be utilized in such situations. Corporate cards can significantly decrease the need to settle reimbursement requests because employees don’t have to make payments out of pocket. This also reduces the administrative burden on finance teams.
To conclude,
Corporate cards are among the best tools for positively impacting a company during its growth phase. If used properly, they can strengthen budget control, maximize saving potential, and decrease administrative burdens. These ensure that companies maintain employee satisfaction and stay equipped with adequate financial resources during the crucial times of scaling up.