Advertisement feature.Redeeming rewards, earned on credit and charge cards, can have a tangible impact on a business. Most small business owners who collect rewards, use them to make savings on day-to-day business costs, boost spending power or for making those emergency purchases.
A valuable perk for staffHowever, the benefits extend beyond purely the financial, with increasingly more small businesses seeing them as a way to treat staff more regularly and to improve motivation. This can mean anything from an outing or occasion paid for by rewards, to gifts such as a free flight. Essentially they offer the ability to reward staff for loyalty, great sales results or outstanding performance with no cost to the business. Business owners surveyed told American Express that they are keen to address their work/life balance and reduce stress this year. An alternative use for rewards could help with this, redeeming them to pay for a hotel for that well-earned holiday or to have a day away from work to plan what comes next for the business.
Despite these many advantages, more than half of the UK’s small business owners are still paying for business purchases using cash, cheques and cards that do not offer such benefits. On a national scale, this means that small businesses are spending an estimated £7.6bn** that could be earning rewards and go some way to help bolster business finances. Every small business wants their money to work hard for them, so it makes sense to have the right tools in place to make this happen. For example, core business expenses from raw materials, inventory and supplies, to larger capital expenditure such as office furniture – could be put on a business card, which would mean that rewards could be earned on almost every pound spent.
Rewards in practiceWith an American Express Business Card rewards are earned for virtually every pound spent, but there are also many other business benefits:
- Using a business card helps to keep business and personal finances separate;
- It enables better management of cashflow and frees up cash for business growth, as extended payment terms are available (with American Express that’s up to 54 days);
- It enables supplier payments to be made upfront meaning better relationships can be built; and
- This upfront payment also means stronger terms can be negotiated as early payment discounts could be secured.
* The American Express UK Small Business Barometer was commissioned by American Express and conducted by market research and online panel experts, Toluna. The research polled 250 UK based small business decision makers qualified as Directors or C-level Executives in businesses with under 100 employees in the UK. The data was collected in June and July 2014. This data has been extrapolated to represent all small businesses nationally.
** Total number of UK businesses with fewer than 100 employees = 1,193,810 (source: BIS business population estimates 2013). 54 per cent of those surveyed didn’t have a card with rewards. 54 per cent of 1,193,810 = 644,657. Average annual average spend on cards among those surveyed is £11,782.76. £11,782.76 x 644,657 = £7,595,838,713.32.
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