Play your cards: how to use a corporate credit card wisely.

AuthorChristensen, Lisa
PositionEntrepreneurEdge

Company credit cards can be efficient and economic options for paying the bills--but there are a few things to keep in mind.

Develop a strategy

To start with, companies need to figure out where a credit card would fit into a larger corporate money management process, says Crystal Low, executive vice president and director of corporate services with Zions Bank. Cards can be used to pay everything from vendors and utility bills to corporate travel and entertainment, Low says, and can give companies a layer of protection from some financial risk.

"[Many companies] think of a card kind of as a transactional thing. The way I look at cards is you really have to look at your entire payable process. The best practice would be try to tie everything to the card program that you have. It takes a little work for a business up front to do that," she says. "Not only does the card protect them from risk, but it works for them--there are rebates and other things that you can get through a card."

Companies should think about their likely use to get the kind of credit card that will work best for them. There are options for every kind of use, whether a company needs the ability to hold a balance and interest for short-term use, or whether it plans on paying in full each month and using the card as a consolidated means of payment that brings perks like rewards or airline miles along with it.

The best person to help with that is a company's banker or financial advisor. "Your banker will understand and will have the conversation and talk through the nuances and options," says Low. "As you look through all your payment options, a card should be part of that. Have the critical conversation with your banker, who can help you navigate through that."

While most vendors accept credit cards, there are still some holdouts in some industries that still prefer check or automatic credit, Low says. Finding out whether all of a company's vendors take credit cards--or if they don't, if they can negotiate a change of payment options with vendors to credit cards--is an important consideration.

"It's not just putting money on the card, it's the terms--you can negotiate with the vendor and say you can pay them early with a card," Low says. "You can negotiate: 'If you let me pay by a card, I'll pay you 10 days earlier.' And then you get the rebate, you get the cash incentive."

Put protections in place

The layer of risk protection is particularly crucial when working with...

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