We hear a lot about how consumers need to keep their credit score in tip-top health to access the lending they need when they need it. But businesses need far more than just a healthy credit score to access the best deals and inspire trust among suppliers and customers.
This can be broken down into three areas:
Using commercial credit cards can help build a business’s reputation. Apart from being able to access finance as and when needed and having a facility in place for exceptional purchases, the reputation as a fast and quibble-free payer is vital.
This also puts your company in a good position ethically. Paying promptly means smaller suppliers or contractors don’t struggle. Also, there’s never any question about the company’s ability to pay, so the rumour mill doesn’t start eroding shareholder value.
Prompt payment is more than just a courtesy. In 2015 Information Age reported that Heinz and 2 Sisters Food Group hit the headlines for trying to extend payment terms that caused their smaller suppliers to struggle. The US arm of Heinz extended its payment terms from 47 to 97 days while AB InBev insists upon 120-day terms. The same article reports that small and medium businesses can face bankruptcy if payments amounting to no more than £50,000 are late.
Forcing suppliers into a corner is short-sighted, let alone poor on the ethics front. Consider the time it takes to source and onboard good, reliable suppliers who keep to delivery schedules? Equally, no business is an island. In many cases, relationships with one supplier will lead to a recommendation for another, trusted partner. Break the network with sharp practice and corporate customers soon find themselves isolated.
Also, a reputation as a poor payer isn’t just a brand risk - it is a direct risk to the financial health of your company. Poor payment isn’t just a sign of unfriendliness, suppliers, partners and customers begin to question your ability to pay - real or imagined. Where investors or public offerings are concerned, the rumour mill is the last thing you want to see kick into action.
One way in which companies can maintain their reputation is by collecting data from commercial cards. With the right tools and with a corporate card, businesses have the ability to bring all costs into a single-view dashboard. This means payment histories are clear and there is less wrangling with suppliers or queried invoices. Rapid payment makes friends! It makes suppliers more likely to go the extra mile.
Speed of access to funds
Corporate cards can also mean being able to get hold of inventory quickly so that the business can be responsive to its end customer. The supplier that goes the extra mile means you can supply the extra oil/tarps/fixings/service where competitors can’t.
Corporate credit cards aren’t a solution to genuine financial difficulties, but they do hand corporate clients the advantage of lengthy payment terms without adversely impacting their suppliers. Gaining a reputation as responsive, a rapid payer with the capacity to access extra funds if the need arises, establishes a company as a trustworthy enterprise with strong future potential both as a supplier and, if the situation demands, a good investment prospect.