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The Flevy Blog covers Business Strategies, Business Theories, & Business Stories.
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Editor's Note: Take a look at our featured best practice, Cost Reduction Opportunities (across Value Chain) (24-slide PowerPoint presentation). Though there are multiple levers to maximizing an organization's profitability, costs are the most directly controllable by any organization. Profitability is being challenged by increased costs, stagnated revenue growth, and increased capital costs in today's economic climate. Therefore, a [read more]
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Financial management is an area that many businesses struggle with, especially when you have staff that often have expenses to cover in their role. One solution that is gaining in popularity is to use prepaid cards and these can bring a range of benefits to your business. Keep reading to discover why your company should be using prepaid cards.
What Are Prepaid Cards?
Prepaid cards are cards that are not linked to a bank account and instead, you simply load funds onto them from an account, which means that once you reach 0 you cannot carry out any more transactions until more money is loaded on. You can also see these transactions being carried out with a linked app. This is an open banking platform that is a smart way to control and manage spending while also improving security.
Manage Travel Expenses
With business travel slowly returning to (almost) normal, companies need to find ways to manage expenses and track spending. With prepaid cards, you can simply top these up with funds to cover the trip and easily track where and when the money is being spent for a greater overview compared to other options.
More Accessible Than Credit
Applying for a regular business credit card can be challenging and many companies struggle to get approved. This is not an issue when you use a prepaid card as you simply sign up online without the need for a credit check and then funds can manually be loaded onto the card from a linked business checking account.
Employee Gifts
Another way that prepaid cards can be used is employee gifts. Providing gifts and perks for employees is important and a great way to keep them motivated, but it is hard to know what they would like when they smash a target. Instead of taking a guess, you can simply provide them with a prepaid card loaded with funds so that they can decide what they want to buy.
Tradeshow Transactions
If your business often attends tradeshows and makes purchases then a prepaid card is the best way to carry out these transactions. You do not want to be carrying around large sums of cash or a card that is linked to your main bank account, so a prepaid card is a smart way to carry out multiple transactions and keep track of what is being spent. This can also be a great way to avoid the fees that come with credit cards, which can accrue quickly when you are making multiple transactions.
These are just a few of the main benefits of using prepaid cards for your business. Prepaid cards can make it much easier for you to manage your expenses and control spending, which should help to improve the financial health of your business amongst other benefits. For businesses seeking to improve their financial health beyond cost management, considering different savings options becomes pivotal. Exploring high yield savings accounts, such as through a Western Alliance bank high yield savings account review, could reveal opportunities to maximize interest earnings on your company’s reserves, thereby contributing significantly to its overall financial strategy. This aligns with managing expenses effectively while also ensuring the company’s funds are growing.
You can download in-depth presentations on Cost Reduction and 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.
For even more best practices available on Flevy, have a look at our top 100 lists:
These best practices are of the same as those leveraged by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Improve the growth and efficiency of your organization by utilizing these best practice frameworks, templates, and tools. Most were developed by seasoned executives and consultants with over 20+ years of experience.
