5 Ways Credit Card Spending Actually Tames Expenses

When you need tighter controls and maximum spending visibility, the way your company pays is key. Deft expense management is a must in a business environment where growth no longer trumps profitability: Ernst & Young reports that investors are demanding more disciplined execution. Fast-growth businesses are finding that moving more spending to commercial credit cards can help.  

5 Ways Credit Card Spending Actually Tames Expenses  

Try these five tactics for sharpening your use of company credit cards. 

1. Consolidate and save. Centralizing spending on a single commercial card provides access to reporting tools that point out opportunities to consolidate purchasing. For example, looking closely at a single spending classification, such as office supplies, can reveal openings to unify spending in a category companywide. When you take advantage of total spend volume to negotiate a better discount from a single supplier you increase buying power. 

2. Control employee spending precisely. You can give employees corporate cards and still keep a tight rein on how they’re used. Cards let you set individual limits on transaction sizes, vendor types and other criteria. If you use virtual card numbers (VCNs) — limited-use, randomly generated numbers that are authorized for specific transactions — there is even more control. The VCN can be used only for transactions that match pre-set controls and can be implemented with approval routings that sync up with your workflow.  

3. Tap discounts without stressing cash. Using cards to make vendor payments means you can take advantage of early pay discounts without actually disbursing funds. This interest-free cash flow management tool lets you pay bills early or on time without straining your cash resources. Suppliers may be more willing to accept card payments than you think; it’s likely that many have already baked the costs of acceptance into their pricing. 

4. Rein in T&E spending. In a fast-moving industry, employees working to close deals may choose travel arrangements that are most expedient, even if they’re outside of company guidelines. You can use spending data to find a middle ground: Identify the most frequently used airlines and hotel chains to ensure you’re negotiating deals with the right ones. You can also set specific T&E-related restrictions on employee corporate cards, requiring the use of certain carriers and limiting transaction sizes.  

5. Earn cash rebates. As you move more spending to your commercial card, earned cash-back rebates based on a percentage of that spending increase. Those rebates can add up, offsetting expenses and providing another revenue stream for your business. Some companies use this extra cash to help fund workplace perks like snacks and outings that help keep employees happy and build team culture. 

Your SVB advisor can help develop your payment strategy by analyzing your master vendor file to identify who takes credit cards and review existing payment terms. This will help you choose your best opportunities to immediately move check payments to a card and gain more efficiency in your end-to-end payment process. 

Learn more about SVB’s Commercial Card solutions  or contact your SVB Global Treasury and Payments Advisor to get started.  

Related Video 

Watch how virtual card numbers (VCN) reduce a payment’s processing cost and fraud risk through increased efficiency, control, and security.

Virtual Card Solutions  

Taming expenses slide guide via SlideShare.


The views expressed in this column are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. You should obtain relevant and specific professional advice before making any investment or other decision. Silicon Valley Bank is not responsible for any cost, claim or loss associated with your use of this material.

About the Author

Robert O’Connor is a Senior Advisor with Silicon Valley Bank’s Global Cash Management team. In this role, he focuses on developing credit card and payments solutions for clients.

Prior to joining Silicon Valley Bank, Robert was Vice President of U.S. Commercial Product Sales at MasterCard Worldwide. During his seven years with MasterCard, Robert worked with many U.S. commercial card issuers on developing their commercial card strategies. Robert’s previous experience includes various business development roles with U.S. Bank’s Corporate Payment Solutions and Merrill Lynch.