Don’t Fear Your Credit Card Statement – It Holds The Key To Savings!
Updated: May 25, 2019
Every successful business makes an effort to control their costs. Lower expenses mean higher margins. But there in one area that often goes overlooked when finding ways to save money and recoup your costs.
Analyzing the spending patterns of your business credit cards can provide valuable insights. These insights can be used to find savings opportunities.
Where to start?
Here are three key areas to focus on when examining your credit card statement:
1. Look closely at every recurring payment and subscription.
Do you have unused or expired subscriptions that are still getting charged periodically? Ask yourself these questions. Do we need this? Are we still using this? Can we move it to an invoice arrangement? Can we negotiate a better deal on this by amending the renewal term? Monthly charges can often be moved to annual charges at a discounted rate. Make a list, treat yourself to a latte and enjoy those cancellation calls. You earned it.
2. Look for higher than anticipated volumes with specific suppliers or on particular categories.
These can be very useful as leverage in negotiations. Look for unexpected volume. It’s okay to head back to your suppliers to ask for volume discounts, especially if you don’t have a contract signed with them. You can also tie this into your next negotiations with you suppliers.
3. Identify charges to suppliers that also invoice your company.
This can be a red flag for duplicate payments. This double pay may not be recognized either by you or your suppliers. This often happens because suppliers are awaiting payment on an overdue invoice. The supplier phones the end user with those dreaded words: “credit hold”. No one wants this, so the end user reaches for their credit card and gets their account back in the black. Later that day or next week, Accounts Payable goes ahead and pays that overdue invoice. The takeaway: when looking for double pays, focus on your critical suppliers that move to credit hold status the fastest.
4. Finally, it’s crucial to have a clear written policy on your business credit cards.
This should cover:
who can use the business credit card
what they can purchase
in what situation
from which suppliers
how much they can spend in one transaction
the monthly limit
rules for end of employment
Having a written policy that your credit card carrying employees are required to sign protects both the business and the employee.
Share what you found when you went through your credit card statement. Join the conversation and post below.