Credit cards are fast becoming the go-to method for corporate payments, so providers offer a wide list of incentives to compete for your business. Cash rebates, introductory APRs, category-spend bonuses and other perks can sweeten the pitch, but do they deliver real value?
The right card should actually provide better financial intelligence, payment process optimization, cost controls and other game-changing improvements. To find a card program that will best support your business, take a close look at each of these areas.
- Industry knowledge: The playing field in technology differs from that in retail, just as the dynamics of new media are distinct from those of manufacturing. When a bank’s team has expertise in your particular sector, it’s better able to recognize how your commercial card program can be used to meet the needs of your staff and payables department. Ask for examples of bank customers that are similar to your company.
- Personal liability: Your business may now be well established and growing, but if you signed on to a small-business-oriented commercial card program as a startup, your existing card agreement may carry a personal guarantee. Ask providers whether the corporation or an individual owner is ultimately financially liable for the account.
- Customization: Ask providers if they can tailor their program to match both your immediate financial needs and your longer term operational plans. A one-size-fits-all approach — one that assigns you to a certain bucket based on your head count or revenue — rarely provides the best solution for the challenges you face. For example, some card programs require a minimum number of cardholders before they allow you to implement cost controls. Look for a provider that is willing to discuss flexibility around program features.
- Supplier enablement: You can derive the most benefit from your card program when you use it for accounts payable as extensively as possible. Ask providers what programs or specific help they can give you to shift supplier accounts from checks to cards. Ask if they have experience working with businesses to streamline their payables process by integrating card payment tools.
- Service: Will your requests for support be routed to a customer service call center? Or can you start building relationships with product and relationship advisors who take the time to understand your entire business and how commercial cards can improve your financial performance? Many banks focus their attention on larger customers, but having an advisor who ensures that the right solutions are in place can be even more critical for smaller companies.
- Proactive monitoring: Will you initiate all contact when you need help, or is a prospective provider’s standard of customer support more proactive? Highlight those that will actively monitor your card usage and advise you on when it may be smart to make changes to your card program. Ask for examples of recommendations a company like yours might receive. A hands-on team at the issuing bank will maximize the card’s value to your company and allow you to focus on growing your business.
You’ll still want to ensure that the card program you choose delivers competitive rebates, with terms that meet your business needs. But push hard to learn about each provider’s commitment to serving your business and helping you grow. When you choose a card program from the right provider, the operational benefits will ultimately far surpass the value of perks.
CFOs Say Service and Relationships Matter MostCFO Magazine's 2016 Commercial Banking Survey found that account management and service is the leading characteristic when CFOs choose a commercial bank: 74% put that ahead of fees and ease of use. Silicon Valley Bank leads in key areas:
- Finance executives that bank with SVB rated it the highest at 89.9 out of 100, in overall satisfaction with individual banks.
- SVB also leads the pack in strategic partnerships, customer relationships, and transaction/payments processing.
Read more in our series about how to optimize your company's payments tools and processes on SVB's Payments Trends & Insights page.
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 have 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.
All non-SVB named companies listed throughout this document, as represented with the various statistical, thoughts, analysis and insights shared in this document, are independent third parties and are not affiliated with SVB Financial Group.