Whether your business is in a period of growth or consolidation, a business credit card or charge card may help manage your cash flow cycle. 

Like many businesses, you may be able to manage short-term business cash flow by utilising the payment terms on a business card to functionally extend the terms of business payables of suppliers.

Additionally, working with suppliers to make your supplier payments align with your statement cycle is a possible strategy to ensure your books have business receivables coming in prior to your expenses being due.

Managing Cash Flow with Payment Terms

Whether you choose a business credit card or a charge card, utilising the card's payment terms can be a potentially effective way to manage your outgoings. 

Imagine being able to pay for a month's worth of marketing and using the cash in your account to invest back into your business. The longer your card offers you to pay your balance down, the more you may be able to invest back into your business; for instance, if your card offers up to 55 cash flow days it means you can pay your supplier 55 days before the cash has to leave your account. 

That cash flow buffer can provide the flexibility to use the cash in your account to make payments that can't be put on a business card. With suppliers paid on your card, you can then concentrate on using funds in cash, cheque, and EFT to fuel growth or make investments in staff and infrastructure. 

Flexibility is Key

When deciding on which business card solution is right for you, consider both the standard payment terms offered as well as whether the card comes with the flexibility of temporary limit increases. 

Some business credit card providers allow you to make partial payments on the balance. This flexibility of payment can be helpful to manage your cash flow during periods of growth when you're investing more into your business. 

At the end of the month, you could choose to either pay down the entire balance to minimise the interest on your card, or pay part of the balance and access your revolving line of credit.

Some card providers may even be able to help if you anticipate increases in spending with temporary limit increases or extension of payment terms. 

Cards to Monitor Cash Flow

Keeping a close eye on your incomings and outgoings is key to effectively managing cash flow. That becomes easier when your outgoing payments stem from one place.

• Pooling business expenses onto one card with one monthly statement can make it easier to keep track of expenses 
• Utilise online tools to streamline your bookkeeping 

Whether you're looking to grow your business, or need help consolidating your supplier payments while waiting on customer payments, a business card can be an effective way to manage your cash flow.