- Refresh commercial card spend policies and limits as a cash management strategy to support this year’s growth.
- Extend cash float through slow receivables and between rounds by using your corporate card as a funding bridge.
- Capture more savings by consolidating vendor expenses on your commercial card to access higher incentives.
Unlocking opportunities for better cash management is crucial for venture-funded companies, especially as you start a new year. For Q1, I often advise clients to focus on commercial card program strategies that increase control over spend, while infusing more flexibility into cash flow. Best practices include refreshing expense policies and refining spending limits, leveraging the float of extended payment terms to bridge funding needs, and consolidating supply chain spend to boost your incentive.
Refresh spend policies and limits on commercial cards
As you dive into the year, make sure your expense policies reflect your company’s current and anticipated growth. If your commercial card program integrates with AI-powered spend management (like at SVB), you can customize spending policies and auto-enforce them as people use their cards. Providing teams with clear guidelines and automated policy alerts makes it easier to keep company spend on-budget and in-policy.
I also advise clients that Q1 is a great time to shift from plastic to secure virtual cards. It’s fast, efficient, and you can customize spending limits based on role, department, use case, vendor and more. It’s a corporate card strategy that gives you more oversight and control over cash flow, which is critical to support this year’s growth.
How should you determine best-fit limits? Leverage card spend data to analyze spending patterns across individuals, teams and suppliers. Those insights can help you customize budgets, timeframes, approvals, expense coding and categorization for daily operations, production needs, business travel, cloud infrastructure, and so on.
Use card float as a cash management strategy
For fast-growth companies, gaining more float between card payments can improve cash flow. If you don’t already have that advantage, look for a commercial card (like SVB’s) with extended payment terms like an additional 25 days to pay the card balance.
Think of it this way: for a company spending $500K each month, having up to 55-day payment terms (instead of the usual 30) could mean having an extra month of $500K in available runway.
This commercial card strategy can help you reduce monthly burn rate and reposition your Days Payable Outstanding (DPO) into cash flow optimization. It doesn’t change how much you’re spending overall. But extending DPO from 30 to 55 days can give a healthy lift to your average monthly cash balance.
Consolidate vendor spend on your commercial card for more rebates & incentive
Another important way to set the stage for a successful year is to unlock cost savings. One of the commercial card strategies I often recommend is to consolidate supply chain spending. Like many companies, you might manage many vendor payables across your corporate card, ACH and checks. But that’s leaving money on the table. When you consolidate vendors and expenses on a single card, it can shift your vendor spend volumes into higher rebate tiers to capture more savings.
Use spend analytics to identify your top expense categories and suppliers. It helps you target opportunities to refocus spend on fewer, yet preferred, vendors for SaaS subscriptions, office or lab supplies and more. Transitioning that spend to your commercial card helps you better control those expenses, avoid unnecessary overlaps, and take advantage of volume-based discounts.
Consolidating procurement and infrastructure spend on your commercial card also boosts your SVB card incentive. It helps ensure you earn more value on every dollar spent. When you factor in large recurring payables like cloud storage, advertising and logistics, it’s a powerful lever for optimizing cash flow.
Q1 is an ideal time to implement card program strategies that can help you improve cash management throughout the year. Learn how SVB commercial cards and AI-powered spend management are built for the unique needs of fast-growth venture-funded companies.
Frequently asked questions
How can commercial cards improve cash flow for growth companies?
Commercial cards (like the SVB Innovator Card) provide an extra 25 days of payment float, enabling venture-backed companies to defer payments longer for a stronger monthly cash position. Also, shifting vendor payments from ACH or checks to cards helps further improve cash flow.
What's the best way to set commercial card limits?
Make sure your corporate card program integrates with a spend management platform that enables maximum flexibility to customize card limits (e.g., budgets, spend categories, timeframes, approved vendors, etc.). Then, assess cardholder spending needs by role, and use payment data to identify spending patterns. A data-driven approach helps you create tiered limits appropriate to the volume and frequency of spend for various users. To optimize cash flow, high-growth companies should review cards quarterly and adjust limits up or down as needed.
How do we update corporate card policies for a scaling business?
Update commercial card expense policies by analyzing spending patterns, most used expense categories, and exceptions over the past 12-18 months. These insights help you decide how to refresh existing policies and add new ones, such as pre-approval thresholds, acceptable merchant categories and approved vendors, and when receipts are required. Factor in common scenarios like remote work expenses, SaaS subscriptions, client entertainment and business travel expenses. Give employees clear, documented guidelines and leverage your spend management platform to auto-enforce policies as card activity occurs.
How do you automatically enforce commercial card spending policies?
Having a corporate card program integrated with a robust spend management platform gives companies a rule-based system to customize and auto-enforce spend policies. As cardholders attempt transactions, the system can push alerts to restrict purchases if the vendor, category or amount is out-of-policy. Alerts can also notify users within automated mobile expense reporting to ensure they submit required purchase details and receipts. These policy controls help companies prevent non-compliant spending and demonstrate effective financial oversight to satisfy auditors.
