On top of those things, you have to make sure the finances of your job are running smoothly. Managing your business spending shouldn’t be an added headache.
You may think that giving contractors corporate debit or credit cards will create financial risks, but it actually gives you MORE control over your business spending and enables you to review and assess spending as it happens.
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Corporate cards, as opposed to business credit cards, are designed for 15 or more employees or other workers. Most contractors fall into that category.
The key financial decision-makers (company owner or head of accounting and finance) set the policies around who gets a card, what types of purchases are allowed, and what spending limit each person has.
Some corporate cards offer significant benefits to the companies that use them. They may be in the form of cash-back, frequent flyer miles, emergency assistance services, and other perks that can be used by the business owner or distributed among key employees.
Approval for corporate cards and spending limits are based on the company’s financials. The institution that’s issuing the card typically looks at the finances of the company, as well as the credit history of the owner.
Debit cards differ from credit cards in that the money is drawn directly from a bank account and interest doesn’t accrue. Corporate debit cards are rare, and most builders opt instead to use corporate credit cards, as they entail more flexibility and less risk.
The policies around how each card can be used is usually up to the business owners and decision-makers.
The advantages of corporate cards extend way beyond company and employee perks. Most importantly, they give contractors a wide range of controls and ways to excel at what they do best— contracting!
Let’s say an employee needs to fuel-up his truck for a big job or buy supplies on-the-fly. Rather than calling the office and waiting for approval, your team members can get what they need, when they need it, enabling them to work more efficiently. Further, management doesn’t need to review the specific spending activities of each employee. With the right system, less time is spent each month completing expense reports. Think of all the time you’ll save when reports are automatically generated, and if you’re currently wasting paper at your company, that gets eliminated too.
The right corporate card system will enable you to review spending as it happens. You have access to information 24/7/365. At the end of the day, you can look at what was spent at an individual and team level for that day and make corrections immediately. This actually results in less risk for your business because you’re not waiting until the end of the month to spot problems. Corporate cards have also been proven to reduce financial fraud because mis-use can be dealt with almost immediately.
When the people on a team are trusted with company money, they actually feel more responsible for the dollars they spend. As employees move up the ladder and take on more responsibility, owners and financial controllers can increase their spending limits. Employees don’t need to spend their own money on business needs and then wait to be reimbursed. That trust and convenience can help you retain your best workers over time.
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When you’re working from one unified and immediately-updated system, you get both a high-level and detailed view of business cash flow. You can see to the penny exactly what’s being spent on individual jobs, specific employees and subcontractors, and the business as a whole. You can even see what’s being spent on categories, like travel, building supplies, food and refreshments, or any other spending areas that you want to review and analyze.
As you make plans for the weeks and months ahead, you can instantly review and analyze spending history, re-set controls and permissions (if necessary), and make better cash flow and P&L projections for the future.
Vendrix was designed specifically for builders. We understand the industry and your day-to-day and long-term challenges and needs. We speak your language.
Rather than adopting a corporate card system that was created for people in offices in suits-and-ties, choose the platform that your industry needs. Empower your team with corporate credit cards while maintaining control over your finances. You’ll spend more time finishing jobs and delighting clients and less time fretting over whether Joe bought six cups of coffee yesterday.
Schedule a demo today and put those old-school expense reports in the dumpster!
