Tag: Credit card for company

The pandemic has pushed entrepreneurs to the edge of their seats. Many find themselves struggling with business payments due to pending invoices or the inability to finance working capital.

Credit scores and technical jargon often get in the way. But we’re here to ease your worries. So, worry less and read along.

What is a Business Credit Score?

A business credit score is the ability of a business to avail loans (e.g., working capital loan) from the market (from banks or Non-Banking Financial Companies (NBFCs). It is the “creditworthiness” of your company and foretells the financial risks for creditors who shall lend your business the needed money.

Business credit scores are also evaluated for issuing corporate facilities (such as Corporate Credit Cards) to entrepreneurs. It is sensitive to many variables, such as payment habits, credit utilization, and consumer feedback, to name a few.

However, it is to be noted that it is not the same as a personal credit score. Entrepreneurs can be creditworthy even when they have a low business credit score, which can mean a risky decision for creditors to lend large sums of money.

Good vs. Bad Business Credit Score

A Credit Report helps you calculate your business credit score. If you are applying for business loans such as the working capital loan, evaluate your credit score beforehand.

• If a business credit score lies somewhere around 700-900 (CIBIL score), it is said to be a good business credit score. Ideally, it should be 750 and above.
• A score below 600 is bad for acquiring credit loans.
• A good credit score instills faith and thereby increases its market value. It also helps to avail start-up loans, working capital loans, etc. Your credit application will be accepted with ease in the least amount of time, and capital will be offered at competitive interest rates.

Steps to avoid/rectify low business credit score

Since we know that a business credit score is crucial to any business, there are some obvious red flags that a company must watch out for.

Usually, a business tends to have a low business credit score if:

1. The company has a history of late repayment of credit

The most important factor is the company’s debt repayment history, which alone determines how risky it is to lend you money. Therefore one must avoid late business payments, pending credit, or any irregularities in this aspect.

2. There is consistent unresolved negative customer feedback.

Many entrepreneurs may not realize this, but consumer feedback forms the next important pillar of your credit report. Any negative feedback negatively influences your company in the public records.

3. There is high credit utilization.

Credit utilization and balance history are other important variables. A general rule in credit finance is that the credit utilization of a company must be 30% of its credit line.

4. You tend to cancel previous credit accounts.

Make sure you do not cancel your previous corporate credit card/accounts as it wipes off your previous creditworthy history. The longer you have been in the market, the more faith lenders have in you. One must build on that established fame even if one plans for a fresh start in your entrepreneurial journey.

Solutions for Collateral-free credit

Do not worry if your company struggles with a low business credit score. At EnKash, we understand that not all businesses have the same growth curve; many face inevitable hurdles and setbacks that can affect the company’s current creditworthiness.

And yet business loans such as working capital loans are essential to sail through daily expenditures, make business payments, and chart future milestones.

EnKash is India’s fastest-growing fintech platform that aims to offer a one-stop solution to all your business needs with its innovative AI-driven technology and smart payment options.

One such option is the series of corporate credit cards launched for the diverse needs of small and rising Indian entrepreneurs in India.

What is a Corporate Credit Card?

A Corporate Credit Card is a multi-user credit card issued to employees for business payments and related expenses. It has multiple uses and employer benefits.

For example, because the employer issues it, they have direct control over the expenses and can cap the spending limit as per the need. It also reduces downtime, as the user (employee) does not have to explicitly report the business payments for every transaction since the transactions are monitored in real time by the employer.

To know more about smart payments through corporate credit cards, you can refer to the link below:

https://youtu.be/_nWojt1Mego

Unlike other corporate credit cards, the EnKash Credit Card is designed as an all-utility credit card that can be used by all teams & employees with no special training and covers all GST bills, supplier & vendor payments, etc., with the least risk of internal or external fraud.

With real-time spending visibility along with a unique WhatsApp tracking feature, your data is always safe, and your money is at the control of your fingertip.

How to apply for a Corporate Credit Card in India?

Even with a low business credit score, it is now possible to take your venture to new heights with innovative solutions such as the EnKash Credit Card.

You can apply for a business credit card in India with these easy steps below:

• With a 100% digital KYC, you can order your business credit card from your comfort place.
• We do not seek credit score reports or collateral to offer you working capital finance or business loans or to issue credit cards.
• With only a few documents (to be uploaded online), you can get a corporate credit card issued in a matter of minutes.

To know more, visit: EnKash. You can also click below on Signup Now and we will reach out to you soon.

You might be thinking about whether a corporate credit card is the right tool for you. Whether you’re in charge of a company’s finances or an individual, how you answer this question will differ.

As a company corporate cards provide a number of benefits for companies looking to give their employees purchasing power while also managing expense reporting. Among the benefits are the following:

5 Key Benefits Of Using Corporate Cards

• Employees have access to a credit line
• Perks and reward packages for employees, as well as cost-cutting measures
• Expense reporting and analytics made easier
• Employee spending power is under your control.
• Concur and other expenditure management systems can be integrated.

At first look, this list of advantages may tend to make offering your employees a corporate credit card a simple decision. If you want to enhance your employees’ purchasing power through a corporate card program, you must be familiar with the program’s features and its execution.

Before giving staff corporate cards, make sure your business expenses policy is in place and that employees understand when they should use the card and what types of expenses should be charged to the card. All direct and indirect expenses related to the business are charged including corporate gift cards.

Corporate Cards- A Masterpiece Utility For An Employee

As an employee, corporate credit cards can give you more spending power and card advantages, help you keep your personal and company costs separate, and make expense reporting and reimbursement easier. Some of the corporate card benefits when given to employees include:

• Expense simplification
• Distinguishing between personal and business expenses
• Access to premium credit card benefits at a low (or free) cost to you
• Employee Reward Program

There are almost certainly as many corporate policies surrounding the use of corporate cards as there are corporations. We’ve seen policies ranging from a strict requirement that all business spending be paid to corporate cards to a recommendation that company expenditure is charged to a corporate card as a convenience. Check with your company to ensure that you understand your company’s policy.

For more information related to corporate cards, spend management utilities, and other financial tools relevant to business, you can watch videos from the link.

https://www.youtube.com/shorts/-Dnf2Vh4ktg

Corporate Cards: Benefits for Companies 

Now that you are familiar with corporate cards and their benefits for the employees. Let us know what are the benefits of a corporate card for the companies.

Cash Rebates

The most visible of the corporate card benefits is the annual cash rebate on purchases. Cashback rebates differ for each provider and their partners and can vary from 1% to 5%, depending on the card issuer and the type of purchase made (items such as office supplies, airline tickets, and gasoline typically see higher rebates).

Improved Spending Management

The spend management utility is the most acceptable means to track the company’s expenses, and corporate cards do the same effectively. By simply entering card statements into an expenditure report and accurately identifying all transactions, spend analysis reports become substantially easier.

The ability of a finance team to evaluate data accurately and efficiently is significantly improved by centrally storing this spend information in the same manner for all employees within a business. Visual dashboards can easily analyze transaction data pulled from the system to provide actionable intelligence for financial decision-making.

This information can be used in a variety of ways, including analyzing expenditures against budgets, negotiating volume discounts with vendors, and finding inefficient spending areas in order to make organizational changes.

Expense Processing That Is More Straightforward

The expense management procedure is greatly simplified and efficient when corporate cards and expense management solutions are integrated. Directly importing credit card statements into the expenditure report enables the collection of precise transaction detail. On their expense reports, cardholders include pertinent information (billing code, client data, etc.). The expense management system can then export this data directly to the ERP, enabling more accurate and timely billing of clients.

Let’s have a look at India’s finest Fintech tool to manage all your spending in one place.

https://youtu.be/vS_3AzMBTvw

Eliminate Expenditure Fraud

There is always the risk of expense fraud when employees pay for products themselves and submit expenses with photos of receipts. Adding larger tips to restaurant receipt copies, purchasing items, submitting receipts for reimbursement and then returning them, purchasing business class seats, and then downgrading them to the economy once the expense has been processed are all examples of how legitimate purchases can turn into fraudulent expenses.

In two ways, giving employees corporate cards eliminates all of these possibilities. First, credit card bills are instantly imported, and the precise amount charged is always included, making it difficult for employees to falsify receipts. Second, reimbursements can’t be handled onto a different card than the one used for the purchase; workers can’t take advantage of any of these strategies.

Organizations should also include a language in their card policy stating that any unlawful purchases are the employee’s responsibility.

Collective Happiness

Another one of the most significant corporate card benefits that should be considered is employee satisfaction. Expenses for employees who travel regularly or need to book conferences can add up to thousands of dollars per month. It will be unnecessary for them to pay for products out of pocket if you provide them with a corporate credit card. This is especially critical for firms that only process 1-2 expenditure payment reimbursements per month since any delay in filing could result in travelers having to pay their credit card bills before being paid for their expenses.

Bottom Line

The message that corporate cards communicate to employees that the company trusts and cares about them is a less obvious but often equally important benefit of delivering corporate cards to employees. In an era where employee satisfaction is such a major topic for many businesses, this is a powerful incentive to explore implementing employee card systems.

To know more, visit: EnKash. You can also click below on Signup Now and we will reach out to you soon.

Corporate credit cards are cards that companies issue to their employees to carry out authorized business expenses on behalf of the corporation. With the help of corporate credit cards, employees can work more efficiently to avoid delays in decision-making related to essential business expenses.

With EnKash corporate credit cards, businesses can streamline their working capital and funds in one place. It also provides complete visibility of every single transaction. Additionally, EnKash corporate credit card system is a dynamic payments system that enables an automatic reconciliation process by comparing the company’s accounts payables with the bank statements to ensure that the transactions recorded in the business accounts have actually taken place and the details of the transactions are recorded accurately

Why are Corporate Credit Cards in India becoming important for Startups?

If you are a startup, EnKash corporate cards help your business grow. Corporate credit cards are an ideal solution to streamline all the business expenses in one place. Also, as a corporate card for startups, it enables the employees to take vital business decisions on time instead of waiting for approvals from the top management.

Even though corporate business cards to multiple employees for carrying out authorized business expenses empowers them to be quicker and more efficient, it can also lead to difficulties in managing and keeping track of business expenses effectively.

Also, with multiple employees accessing the company’s funds, the business runs a considerable risk of financial leaks. So to have complete control over the business finances, startups need to carry out timely corporate card reconciliation.

Advantages of Corporate Card Reconciliation

A corporate card reconciliation is a process by which a business can compare and track the transactions of the company’s ledger with the bank statements. The process allows the business to ascertain that the business funds are used to make only authorized payments.

With a corporate credit card reconciliation process, startups can detect accounting discrepancies, false filing of expenses, cases of double payments, or accidental payments to a vendor. All these factors can affect the business growth and, in worst cases, can lead to legal actions against the company itself.

A corporate credit card reconciliation process helps the company to track all the financial transactions by comparing accounting books, receipts, and other financial documents with the bank statement. But, the reconciliation process can be challenging if the company deals with many vendors. In addition, it is humanly impossible for someone to evaluate and detect all the financial discrepancies with 100% accuracy.

Disadvantages of manual corporate card reconciliation process

• Traditional bookkeeping is an inefficient way to maintain accounting records. Furthermore, accounting records manually updated are prone to errors, as employees can make faulty entries or accidentally make double entries for a single transaction.
• Though the employees are issued with separate corporate cards in India, most often, in cases of emergencies, employees end up sharing their cards with colleagues. This can sometimes lead to double entry by both employees or failing to update the business transaction completely.
• Also, the reconciliation process is expensive and time-consuming, as the company has to hire staff or outsource the work to a third party to examine the accounting books for an unbiased evaluation.
• The major problem with corporate business cards is the number of employees involved in the company finances. Many employees outsmart the company by not reporting the correct transaction amount to claim extra reimbursement. Without proper financial reporting, the business is at risk of financial leaks.
• Corporate cards for startups are made to help employees make authorized expenses. Still, if the employees are unclear about which costs fall under authorized business expenses, it can result in the company losing financial resources.

Managing and keeping track of business expenses manually using traditional bookkeeping methods can lead to miscalculations.

Additionally, keeping track of every transaction with accurate details helps in the corporate credit card reconciliation process. To have complete control over business spending, startups need to automate their business finances with dynamic expense management software.

Why do you need spend management software to track credit card usage?

An expense management software like EnKash corporate card expense management software enables start-ups to streamline all their business expenses in one place. It allows companies to manage, track, control, and examine business funds effectively.

With EnKash corporate cards for startups, businesses can analyze and evaluate where the company funds are being used. The expense management software records every single transaction automatically. Also, the software can reconcile your credit statements with your business accounting records with complete accuracy.

Why automate Corporate Credit Card Reconciliation process

The traditional methods of recording, analyzing, verifying, and managing the business funds and reimbursement process are prone to errors or biased evaluation. Automating the corporate credit card reconciliation process enables the business to control and evaluate the business finances digitally with just a few clicks.

The EnKash expense management software provides businesses with a better way to maintain their accounting records in one place with a multi-functional dashboard. The automation software records the details of transactions and uploads the virtual receipts accurately, which enables the company to avoid any discrepancies in the financial records.

To know more, visit: EnKash. You can also click below on Signup Now and we will reach out to you soon.

Corporate credit cards are issued by businesses to make authorized expenses on behalf of the company. A corporate credit card operates like a personal credit card. Corporate credit cards are a tool to make the business process effective and efficient. For example, an employee can make authorized payments with a corporate credit card like hotel bookings, airfare, etc.

But most notably, with the help of corporate credit cards, a company can streamline all its business expenses and have complete control over them. Having a corporate card is beneficial for both companies and employees.

Earlier, employees had to spend their own money for business expenses in case of emergency and wait for reimbursement, which took a while. The slow and extensive process of getting reimbursed puts a lot of pressure on the employees financially. A corporate credit card for employees takes the burden off the employees, as they can make any expense on behalf of the company as long as it is an authorized expense.

For companies, a corporate credit card acts as an essential financial tool as they can track all the expenses made from each card issued. Also, the company can set limits on the cards using the corporate credit card expense management tool to set an estimated budget for expenses every month. Corporate credit card solution reduces the risk of employees’ accidental spending and saves the company a lot of time and resources.

Why Corporate Credit Cards are important for SMEs and Startups?

Having a good credit score is essential in the long run for both Small and Medium Enterprises (SMEs) and Startups. If your record shows unauthorized expenses made that are deemed unnecessary on the accounting records, that might affect the credit score and ultimately impact your business.

If you have a business, whether a small or large corporation, you probably know keeping track of all the financial records without proper management tools is not humanly possible. And for SMEs and Startups, not having adequate control over expenses can affect the overall business growth if the company’s money is used for unofficial purposes.

Using corporate credit card management software you can get complete visibility and control over your company’s finances. For example, you can track the expenses and set limits on the cards to avoid overspending.

Below you will find some more benefits of having a corporate credit card for employees, so keep reading.

Benefits of Corporate Credit Cards for SMEs and Startups

A corporate credit card is a great financial tool for cash flow management. All the spending made on behalf of the company gets recorded using the corporate credit card management software, enabling the business to avoid gaps in the accounting records.

As a business owner, you can set limits on the corporate card issued to the employees. Thus, corporate credit card management software reduces the risk of accidental overspending by employees.

Having a bad credit score can negatively impact the business in the long run. Therefore, for SMEs and startups having complete control over the company’s working capital is a priority to keep their business afloat.

Using a corporate credit card reduces the risk of fraud. The cards are encrypted with a single sign-on making it impossible for hackers because the system gets alerted as soon as multiple tries are made to hack into the system.

With corporate credit cards, you can streamline business expenses in one place with an interactive interface that shows all the business transactions made in real time with additional analytics to boost your business.

Corporate credit card also provides you with rewards and cashback to encourage authorized business expenses.

Benefits of Corporate Credit Cards for Startup employees

A corporate credit card comes in handy for employees while making customary B2B transactions.

In addition, unlike earlier, the financial burden where employees had to spend from their own pockets to incur business expenses and then get reimbursement from the company has been lifted. This makes the employees more productive while taking important business decisions about spending money.

Now the employees can make payments instantaneously from the corporate card issued to them, which is a more effective and speedy process.

A corporate credit card for employees can encourage employees to work more efficiently. They can avoid any delay in decision-making on whether or not to make the necessary expenses.

Importance of Corporate Credit Card expense management

For businesses, issuing corporate cards to their employees has excellent benefits, but it can also create certain problems. Problems like unethical use of business money for personal use, accidental spending, or overspending on tools and resources that are not a priority.

Thus, having corporate credit card management software to monitor and control expenses is highly significant to the overall growth of the corporation. With a corporate card, you can track, record, and manage all your expenses effectively in one place. Also, implementing corporate credit card management software reduces the risk of fraud or unethical practices to a great extent.

To know more, visit EnKash. You can also click below on Signup Now and we will reach out to you soon.

How Can Business Owners Make Use of Revolving Line of Credit?

Whether you’re an individual or a business owner, there are times when we need funds at short notice – there is an urgent need to spend, whether it be on an emergency or an opportunity that has cropped up. Dipping into savings is one way to deal with it but you need to wait for the savings to be replenished before venturing out again. For business owners, cash flows often remain in deficit as customer payments come in late and billing cycles aren’t flexible. All of this adds on to the need for additional funds which only grows exponentially by the end of the month.

This is where a revolving line of credit (RLC) comes to the rescue, especially for small businesses. An RLC is a flexible loan with a predetermined amount from a bank or financial institution. Similar to credit cards in some cases, these are funds that can be used as and when the need arises while users can pay them back either in installments or lump sum.

What is a revolving line of credit, and how does it work?

Borrowers with a revolving line of credit have access to a specific amount of cash that may be borrowed, repaid, and borrowed again. This feature makes revolving lines of credit an appealing alternative for individuals and organizations looking to pay recurring bills and manage cash flow.

A credit limit, which is the maximum amount a borrower may spend on the account, gets assigned to you as a borrower, which is a fixed quantity of cash. Your balance grows as you spend more on the revolving credit account. You’ll create a transaction history, and after the billing cycle, all of your charges will appear on your statement.

If you pay off the revolving credit amount debt in full and on time after the billing cycle, you’ve settled the account and can utilize the whole credit limit again the next billing cycle.

The minimum payment can be a fixed sum or a percentage of the entire amount borrowed; specifics are available in your revolving credit agreement. Newly issued credit cards or lines of credit may offer promotional rates, such as a 0% APR during the introductory period.

How does RLC differ from personal loans and credit cards?

Although similar, a revolving credit line differs from the rest in many ways. For instance, virtual cards generally have a higher interest rate than those of a credit line. In case of credit cards, you’re only able to use the funds for purchases or payment of bills. A revolving line of credit, on the other hand, gives you the freedom to withdraw funds into your bank account without paying any extra fees.

The alternative of taking a short-term bank loan may not be feasible especially when the need for funds isn’t high enough. If you can pay the borrowed amount in a month or two, a revolving line of credit is the better option.

Today, many financial institutions provide revolving lines of credit should you need one. For small business owners, opening a credit line is much easier and faster than taking a loan from a bank. That being said, knowing the lender is as important as knowing how much you want to borrow. A revolving credit can be a boon if used wisely.

Advantages and Disadvantages

Below are some of the pros and cons of opening a revolving credit line.

Pros:
1. Flexibility – use it for purchases, bill payments and even bank withdrawals.
2. Interest payments – pay interest only on the utilized amount.
3. Increase credit score – by repaying your loans on time, you can increase your credit score which in turn will enable your eligibility for higher loans in the future.

Cons:
1. Addition of fees – Although the interest rate is lower than traditional credit cards, multiple credit withdrawals in a year can lead to a higher accumulation of fees paid.
2. Debt trap – It is very easy to fall into a debt trap if carefully considered. By paying only the minimum amount or a lower EMI, it is tempting to open more credit lines that give away your additional cash.

Like every financial instrument out there, revolving lines of credit are introduced to make lives easier. These lines of credit can be extremely cost-effective when used after thorough consideration and on the other hand, they can spell financial trouble if there is an excessive borrowing pattern. It is imperative to pay attention to the terms of the credit line by the institution, especially the fees, interest rate and repayment schedule.

How Can Business Owners Make Use of RLC?

Revolving lines of credit are appropriate for seasonal firms or businesses with fluctuating sales. If your company has high and low sales seasons or a gap between finished work and payment, a revolving line of credit may be useful in bridging the gap.

For example, if your company receives a large order and has to acquire goods to fulfill it, a revolving line of credit might be an excellent method to fund procurement of the goods needed.

In the following sections, we’ll look at the benefits and drawbacks of a revolving credit line. You can decide if this is the best funding choice for your company by assessing the advantages and downsides.

The Bottom Line

The benefits of a revolving line of credit account are especially applicable to firms with short-term fund demands; if you routinely have urgent funding needs, this may be your best alternative. Of course, there are always drawbacks, such as those discussed in this blog. We hope that after reviewing our list of benefits and drawbacks, you can better decide whether a revolving line of credit is ideal for your company.

To know more, visit: EnKash. You can also click below on Signup Now, and we will reach out to you soon.