When you run a business, especially in a country like Singapore, it is vital for you to build up your savings. If your company is backed by good savings, it becomes more financially stable and improves profitability. This is where cashback comes in, a great way to save on your day-to-day business expenses. Now you might wonder, how would a small amount of cash back help a huge business? In this article, we will cover how cash back from your corporate credit card will be an asset to your business. But before that, let us understand what exactly cashback is.
What is cashback?
Cashback is a scheme that corporate card companies offer businesses. Here, on every purchase made by the business, your business account receives a percentage of the amount back into the account. These rewards usually come in the form of cash, hence the name. But in order to be eligible for a cashback, you need to follow a few terms and conditions. Moreover, the percentage that you receive for each transaction varies.
How does cashback work?
As mentioned before, the cashback policy offered by each credit card company varies. In order to find the right one for your company, you need to do your research and review the offerings, such as the percentage and the terms and conditions of each financial institution. Moreover, a cashback scheme is more readily available for businesses since the size of the purchase is different from personal spending. Make sure that you learn about all the criteria for enabling a cashback scheme for your corporate card and read the fine print thoroughly. Now, let us take a look at how businesses benefit from cashbacks.
Flat-rate cashback:
Flat-rate cashback is a type of fixed-rate cashback system. In this, the percentage of the cashback is fixed irrespective of the purchase made. Any amount above the threshold will receive the same percentage of cashback. This type of incentivisation will increase the usage of your company’s credit card.
Tiered-rate cashback:
Tiered-rate cashback is one of the bonus category cashback systems. Unlike a flat-rate system, this cashback does not work on a fixed percentage system. It offers a higher percentage on certain purchases and a lower percentage on others. It is beneficial for business owners to attract companies with large-scale spending.
Rotating Bonus cashback:
It is similar to tiered-rate cashback and is one of the bonus-type cashback systems. In this, there is a flat-rate or fixed cashback in certain categories, while other categories have a higher percentage in a rotating quarterly manner. Every quarter or so, the category for which the bonus applies changes, offering cashback on a varied range of products and services.
Customizable bonus cashback:
As the name suggests, customizable bonus cashback is a more flexible cashback system than the others mentioned before. In this scheme, a client can individually customize which category they want the cashback to be applied to. It allows for that option or automatically adjusts according to their spending habits. Businesses can profit by enabling this scheme.
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How do companies benefit from cashback?
Direct cost savings:
As said earlier, it also directly contributes to building your savings. With each payment, your business gets between 1% to 5% depending on the category and card type. For instance, if your business spends approximately $50,000 a year on travel, software, and supplies, even if it has a cash back rate of 2%, you will receive approximately $1,000. This amount can be used to cut overhead and can be invested in the business again.
Better cash flow:
Cashback, when received, is seen on the bank statement and can be withdrawn against your bank account. What this implies is that you will be spending less from your personal savings and providing your company with more leeway. During tough financial cycles or expansion phases, such better cash flow can mitigate budgetary stress so that you are able to manage salaries, operations, or payments to vendors more effectively.
Strategic expenditure
Some credit cards have tiered cashback, and what this does is that you earn a better cashback in certain categories such as fuel, online marketing, travel and dining. When you own a business, you can deliberately spend within these categories in order to maximize your profits, turning your daily expenditures into a savings mechanism. This provides an incentive for groups to think ahead while making purchases, coordinating spend to align with cashback-eligible categories.
Simplified reward system:
Unlike points or air miles with conditions, blackout dates, or conversion processes, cashback is straightforward: it’s money back. Cashback doesn’t need staff to monitor or exchange rewards, and it’s immediately usable—spendable on anything from office supplies to bill payments. The ease of cashback makes it a very effective and low-effort reward for any company.
In a place like Singapore, where intelligent spending counts, cashback gives businesses an easy means of saving more without compromising. From everyday costs to planned buys, it increases savings, enhances cash flow, and streamlines rewards. It’s a low-effort, high-value tool that every business ought to make full use of.
