A corporate credit card is much like a regular credit card, the biggest difference being that a corporate card is issued by a bank to a business, not to an individual. Corporate cards help in increasing the purchasing power of a business while improving the cash conversion cycle.
Corporate cards also come with a higher credit limit than personal credit cards for businesses, allowing a them to easily manage expenses without affecting the personal liability of the business owner or employees.
So many of your business expenses are easier if you use credit cards. In case of a few international vendors for ads or SaaS, it’s even indispensable. This has led to the increased usage of corporate cards. There are many benefits to it and therefore we have seen the surge in usage recently.
Let’s talk about a few things to keep in mind while using a credit card for your business
Keep your personal and corporate expenses separate
In the growth stage, it’s often too easy to just use something that’s already working and ignore the future repercussions. Using personal cards or recording personal expenses on a business credit card should be strictly discouraged. If there is still a need to do so, set up a mechanism for every user to record the personal and business expenses every month without waiting for the year end. This will be helpful in not only filing your taxes but also in case, there is an audit for high usage of personal credit cards .
Keep track of all the recurring expenses to make sure you there is no wastage
Many of the services and tools that your business uses are charged on monthly subscriptions. But sometimes you don’t need all the tools forever. Other times, it may be a trial service you forgot to unsubscribe on time. It is very important to have a central tracker for all such expenses. Being frugal is very important in any stage of a business and no rupee should go waste.
Set limits on spending for different teams and different types of spends
It is very important to budget different kinds of operational expenses for any business. But every team will want to prioritize their expenses be it marketing, tech or sales. Similarly, at different stages, you will feel the impulse to spend on a particular tool because of a short-term vision. In both of these cases, a credit card spend can go for a toss. Setting strict limits on different spends and periodic review during monthly catch up is the best way to curb this issue.
Track and monitor return for all your major spends
Talking of reviews, credit card statements can be a blackhole of information when it comes to your business spends. It is very important to monitor what actual business value all the major and recurring line items on statements are generating for your business. Research and recognize all your statement line items so that you know which are more effective and adjust your spending within the budget accordingly.
[Suggested Reading: Corporate Credit Card: Why Every Business Should Get One]
Repay on time to maintain and grow your credit score
If you are using a personal credit score, any default will directly impact your personal credit score and put direct liability on you, threatening your personal assets. But even if you are using a corporate credit card, default is no joke. Business credit score is very important for a business’s ability to borrow and scale using debt of any kind including credit limits themselves. In a lot of cases, you can’t pay your credit card bills with standing instructions on a business account. It’s best to set recurring reminders to pay your bills. You might also ask your credit card company to change your cycle to match your monthly business cycles.
Expense management softwares can help you solve some of these issues, but here at Razorpay we solve problems fundamentally. RazopayX Corporate Cards are designed ground up to simplify payments for growing businesses. Why is it perfect for you?
Dynamic credit limit for your spends that grows with your business
Many entrepreneurs use personal credit cards for in place of credit cards for Businesses, which are completely decoupled from the reality of businesses although they enable business spends at a small scale. Click To Tweet
Personal cards have limited credit limits and personal liability is on users. What often follows is the usage of multiple personal cards and reimbursement nightmare to just keep things running. This is why we designed the credit limits on RazorpayX Corporate Cards to be dynamic.
Dynamic credit limits scale with businesses and provide a buffer by keeping limits upto two times the regular usage.
No personal guarantees or liabilities with a card approved for your business
Every business owner understands that business transactions can get tricky, mainly due to the high transaction value involved. Later, when such a situation arises – using your personal credit card risks your personal credit limit. However, a corporate credit card has no liabilities on the individual.
Greater visibility into your billed & unbilled transactions with a smart dashboard
If a business wants to stop all payments from their credit card to balance the budget, it is as easy as a simple toggle from the RazorpayX dashboard. The RazorpayX Corporate Cards dashboard takes care of visibility with nuanced reporting and ability to set limits on cards, users and types of spends.
Ability to set limits for teams and toggle cards on or off with a click of a button
As a business, you have complete control and visibility over spends. You can set an upper limit on funds that can be used by your employee. This helps you manage your expenses really well. And, you don’t have to worry about making reimbursements to your employee later on.
Option of automatic repayment from your customer payments
With RazorpayX Corporate Cards, you get greater visibility of expenses made by your employee when they use one. Not just this, you can also offer an option to enable automatic repayment from your customers.
RazorpayX, an end-to-end business banking platform, has the best in class corporate credit cards for your business. You can avail an instantly approved card that offers simplified payments and superior expense management exclusively for Razorpay users. RazorpayX Corporate Cards offer immense flexibility with up to 50 days of interest-free credit period.
You can use the universally accepted card to make payments towards Google Ads, AWS, Facebook Ads, and so much more.
These credit cards for businesses are equipped with dynamic credit limits, auto-repayment features, and a whole array of curated benefits! So, are you ready to get started with business banking and unlock growth for your business?