Business credit card cash back programs can provide your company with cash to be used or reinvested in multiple different ways. Depending on the amount of cash the credit card company offers as a refund, the benefits to your company could be quite substantial. Below are 5 ways in which cash back programs for credit card spending can enhance your businesses expenses.
1. Reduced Payments
Credit card reimbursement programs often take the form of a refund on your monthly statement. If this is the case, these reimbursements will lower the balance on the card and reduce the amount of your minimum payments. Depending on the percentage of refund offered by the credit card company, the amount refunded will vary. Typical refund amounts range from 1-5%. However, note that sometimes you may have to earn a minimum amount to obtain the refund, which could delay your receipt of the refund.
2. Cash Refunds
The credit card company may offer you the option of receiving a cash refund for the amount you are entitled to. While you may have to meet a limit before the company will print a check, you will still receive these funds to use as you see fit, and not necessarily have to put the money towards your credit card balance or use the funds by charging items onto the card. Because they can be used any way you would like, cash refunds are the most desirable form of a refund from your credit company.
3. Reinvestment of Funds into Business
Regardless of whether you receive the money on your credit card or by check, the cash refund you receive can be reinvested into your business. These funds provide you with money to purchase new supplies, build up capitol, use in marketing or public relations campaigns, or even pay yourself or employees. Basically, these funds are able to be used any way you see fit, including bulking up your company's resources.
4. Debt Reduction
Of course, one of the main benefits of cash back programs is reducing the amount of your company's debt. Basically, while you incur debt by using the credit card, you are also reducing that amount of debt. In your monthly account reconciliations, you may be surprised at how much your company's debt is reduced by these refunds - all without you having done a single thing other than purchasing the items and services your company needs to function.
5. Increased Cash Flow
Cash refunds also give your company an increase in cash flow. Cash is something a company may not readily have on hand, but something that it always needs. Receiving a refund from your credit card for the amount of expenses you have put on the card can free up cash either on the card or in other areas to use for reinvestment in the business or to increase your salary. At times, this extra cash may help your company get through tough times, or enable it to perform in a way you hadn't anticipated it would be able to for some time.