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Financial Calculators

Cash Flow Management

Payment with credit cards

To help conserve cash, you can also use credit cards to pay some of the bills your business incurs. Typically, banks and other financial institutions offer a range of credit cards, debit cards, and related services to help you manage your business cash flow.

Your bank may be willing to customize a small-business credit card that is designed to serve your cash flow needs. Some ways to control cash expenses include the use of spending limits for individual employees and a billing cycle that matches your pattern of cash flows.

For example, seasonal fluctuations in your company's sales may dictate looser credit requirements in slower months and allow stricter requirements in busy months. You may be able to negotiate a longer billing period that better matches heavy cash receipts you experience at the end of every quarter.

Similar to the rewards and cash rebate cards that consumers use, you may find a bonus card helpful in improving your business cash flow. Bonus cards earn points that can be redeemed for cash or goods from participating vendors. Business cardholders often earn points at the same rate that consumers earn with rewards cards. The most common accrual rate is one bonus point or frequent-flier mile for each dollar spent with the card.

Paying for travel & entertainment expenses on a business credit card lets you rack up bonus points. In addition, using debit cards reduces a reliance on disbursements from petty cash.

When traveling outside of the U.S., you or your employees will inevitably make purchases in currencies other than the dollar. You may also be able to negotiate a forward exchange rate with your bank so that you are aware of the dollar-equivalent cost of those expenses. At the very least, it's always a good idea to ask what exchange rate the bank uses to calculate your expenses in dollars.

You may have also paid a value-added tax (VAT) on purchases of goods bought outside of the U.S. Your card company may be well versed in the mechanics of receiving VAT refunds for its cardholders and may be able to help you complete the necessary paperwork.

Using a small-business credit card to pay certain expenses can help you manage your business cash flow. As these examples show, credit and debit cards are not merely a means of increasing your sales opportunities: they are also useful in helping to control cash expenses. You should check with your financial institution to see what credit card programs it has for your small business.

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Calculators are provided by LeadFusion, Inc., a third party that is not affiliated with M&T Bank. M&T does not endorse or guarantee the accuracy or results provided by the calculators or any accompanying information and M&T has no responsibility or liability whatsoever in connection with the use of the calculators or any related material. The information provided by/with the calculators is for illustrative purposes only and may vary from your actual loan, mortgage, investment, or savings results. Interest rates are hypothetical and are not meant to represent any specific investment. Rates of return will vary over time, particularly for long-term investments. Reliance on any information provided by/with the calculators is solely at your own risk.