New Control & Reporting Features Provide Benefit to Companies of All Sizes
FAYETTEVILLE, Ark. – New data indicates U.S. businesses are increasingly relying on credit cards. Despite several years of slow economic growth, purchasing card spending has continued to expand. Between 2011 and 2013, spending increased 25 percent – from $196 billion to $245 billion – and is forecast to continue increasing at a rate of around 10 percent – through 2018.
Purchasing cards are a type of corporate credit card that provide enhanced internal controls and reporting over other methods of payment. Fraudulent spending is a concern among business owners and administrators when it comes to credit cards, but the controls available with these next-generation cards allow restrictions such as spending limits, vendor selection and usage monitoring. Real-time management of the account allows for enhanced reporting – meaning that the card manager can review purchases and quickly flag, and control, violations. These controls make the card valuable to business owners and administrators.
Purchasing cards can also help businesses save about $70 per transaction. The savings are recouped from time and effort in sourcing, purchasing and payment in comparison to most traditional purchasing processes. Another significant benefit is found in the payment cycle time – which is reduced, on average, by 8 days.1
This type of credit card also allows for electronic payment options – companies can use this system to streamline the process of reporting and paying invoices received from employees or vendors. When a company has a large number of invoices, processing on paper can become cumbersome. The use of electronic payments is expected to rise from 18 percent in 2013 to 43 percent of corporate credit card holders in 2016.1
According to Arvest Bank, the 31st-largest issuer2 of commercial credit cards in the U.S., there are several things to consider when applying for a corporate credit card or adding a purchasing card. They include: current company policies on spending or reporting – these policies should be reviewed and updated, if necessary; credit card capabilities – an administrator should talk with a local bank to thoroughly understand all of the features and benefits a purchasing card offers; and, employee education – all employees that will be issued a card should be educated on spending and reporting policies.
12014 Purchasing Card Benchmark Survey Results
2The Nilson Report, Issue 1046