Prepaid Cards for Business: Why They Work for SMEs
Credit control and audit trails are not just the province of large corporates. In fact, a lot of the success of rapidly-growing SMEs is derived through efficient control and management of information systems.
So how do prepaid cards work? Where do prepaid cards for small business come in? There are a number of ways- here are some ideas:
Cash floats for sales and field based staff
The problem here is that historically, staff have had to use their money for fuel, per diem expenses and travel, or you have to give a cash advance. Businesses, big and small, are often reluctant to provide credit cards as incidents of misuse can be costly and time consuming. With a prepaid card you can set a limit on the financial exposure (this is the amount you load on the card), reporting on expenditure can be seen and internet transactions like hotel bookings can be made with ease. Using a prepaid card often means you are not subject to costly booking fees which usually apply with business credit cards too
Do you run Google Adwords campaigns? This is an example of a type of online payment that your business might make where recurring charges may be currently be applied to your debit or credit card. How can you be 100% certain that the charges are capped? A prepaid card for internet purchases is not linked to your bank account or credit card – this ensures that your maximum exposure is the money you have chosen to load on the card.
Credit card fraud is much talked about today. You can avoid the dangers by using a prepaid card for all your internet shopping. Yes, there is a chance your account could be compromised, but unlike using debit and credit cards you are not exposed to the level of your bank balance or credit limit.
Casual employees or temporary workers may not have a bank account. Paying these people with cash is not always practical or safe. Give them a prepaid card, and on each pay day simply electronically load money to their prepaid card account. Safe, secure, and you have a record of the transfer.
Incentives and recognition
We all know that well run incentive and recognition schemes pay for themselves; the increased performance is worth more to your business than the cost of the scheme. There is a way to further improve the impact and benefit of incentive and recognition schemes-deliver the rewards via a prepaid card. You will still need to address tax and NI issues, but when the reward arrives with your staff it is separated from payroll. This makes the reward more visible, and there is a bigger tendency for staff to reward themselves rather than absorb the money into their regular budgets. The end result is that staff feel good for having delivered against the target you set, and they are more likely to do so next time around.
These are just some of the ways that prepaid cards can benefit your business. Prepaid cards are simple to set-up, easy to use and can save you time and money.
For information on prepaid cards, check out websites such as www.Compareandsave.com, or for examples of how prepaid in general can solve problems for your business, visit www.globalprepaidexchange.com
This business advice article by our business expert Kevin Harrington