When it comes to business financial management, it is commonly believed that cash is king! Whether your business is currently experiencing a financial crisis or not, successfully managing your business’s cash flows is critical, and for many, it is the only way to keep their business from closing down. If you find yourself in a cash crisis, unable to pay suppliers, acquire items, or even pay salaries, the issue is the significant delay between when you have to pay suppliers and when you receive money from clients; the answer is cash flow management.
Cash flow management is important for sustaining and growing your business. Here’s where your business credit card could be more than just a convenient financial instrument for your business. If utilized properly, your credit card can help you run your business more efficiently by allowing you more control over your cash flows, especially during difficult days.
Business credit can help SMEs manage their cash flow in three ways:
- Managing Cash Flow and Growing Expenses
Many SMEs suffer from cash flow gaps, which occur when business expenses are due, but customer payments are yet to be received. Businesses can make payments in advance of receiving funds by using a business credit card with an interest-free period. If the balance is paid off by the end of the interest-free period, this can allow businesses to maintain good relationships with suppliers even when they are cash-strapped, without incurring interest charges on the working capital borrowed in the interim.
Cards with long interest-free credit periods may be preferable for SMEs that frequently experience cash flow management gaps. Using the business credit card regularly and always paying on time helps new businesses build their credit score. This can make it easier to obtain other types of business credit, such as loans, and may lower long-term financing costs because higher credit scores can earn a lower interest rate.
- Simplify Expense Management
Many business credit cards have online tools that allow SME owners and managers to view card payment and balance details at any time. This can assist business managers in determining the best time to make card payments to maximize the use of interest-free credit and better manage business cash flows, freeing up cash for other uses.
- Utilizing Rewards Programs to Reduce Business Expenses
The SME credit card rewards points can be used to pay for a variety of adhoc business expenses such as flights, hotel bills, and entertainment. Furthermore, some cards provide additional bonus points or cash back for specific purchases, such as office supplies, telecommunications services, and travel.
A business card usually provides up to 30 days of float to help you pay for the goods and services you buy with the card. Some business cards, on the other hand, go a step further in assisting you to improve your cash flow or to take advantage of opportunities as they arise by providing flexible payment options.
founderscard is one of the best SME credit cards that offers a 51-day interest-free credit period to pay off your business card bill. This frees up more cash for your business while still allowing you to purchase supplies, equipment, and other items. It is solely intended to meet your credit needs while also managing your business expenses.
Get founderscard today and manage your business more effectively.