How A Construction Card Can Benefit Your Business
What is a construction card?
A construction credit card helps you manage construction business spending. As a construction business owner, you are likely enjoying the construction boom that has happened with the healthy economy. The value of new private construction in the U.S. has reached 898.7 billion, and the industry is expected to grow to $1.53 trillion by 2022.
Running a successful construction company requires you to be able to make purchases when they are needed so that your company can meet the deadlines of your projects. Construction cards can help your company to do that. They are cards that you can give to your employees so that they can make the purchases that they need in a timely manner without having to wait for the purchase approval process.
Why businesses use construction cards
Businesses use construction cards for several reasons. The cards allow companies to get rid of time-consuming traditional payment and purchase processes. They also let employees make purchases for your company without having to file requisition forms and to wait to receive approvals.
Construction cards may be construction debit cards or construction credit cards. Giving your employees cards to use can allow you to get rid of reimbursements, which is good for both your business and for your employees.
Features of the best construction cards
When you are searching for a credit card for a construction business, there are several optimal features that you should look for. The ideal card should not charge a high rate of interest or high annual fees.
A good credit card for the construction industry should also allow you to place limits on where the card can be used. You should look for a card that allows you to restrict the use of the card to specific suppliers or vendors and that lets you restrict the amounts that can be spent.
Where construction cards can be used
Where your employees might be able to use your cards will depend on whether you choose construction debit cards or construction credit cards and whether they are virtual or plastic. Some construction debit card issuers offer built-in spending controls that let you choose where your employees can use their cards. If they try to use them to make purchases elsewhere, the cards won’t work.
Virtual construction cards are randomly generated card numbers that can be used to make remote purchases online or over the phone. They can’t be used to make purchases in person in stores, however. Most credit cards do not allow you to restrict where they can be used, meaning that your employees can use them anywhere that they are accepted. According to J.P. Morgan, the average cost to process electronic expense reports is $18 while the average cost to process paper-based expense reports is $43.
How to load money onto a construction card
If you get a construction credit card, the amount of money that is available will be determined by the card issuer. By contrast, a debit card for the construction industry can be reloaded from your deposit account when you need to make more funds available.
You can load money onto your debit card by transferring funds electronically from your deposit account. When purchases are made, the costs will be subtracted from the amount of money that you have allocated for the card instead of being charged to a line of credit.
Differences between construction debit cards and construction credit cards
There are several differences between debit and credit cards for construction companies. Debit cards are linked to your deposit account. When your employees use the cards, the costs are subtracted from your money and will not incur interest.
Credit cards may carry high-interest rates and charge high annual fees. When they are used, the costs are charged to your credit line and will add to your company’s debt level. Finally, debit cards may come with extensive expense controls so that you can place restrictions on when, where, and how your employees can use them.
To learn more about construction debit cards and construction credit cards check out our construction hub with over 15 construction articles.
Why using construction cards is better than using cash or checks
If your business has a petty cash fund or writes checks, it has a higher risk of suffering business fraud. Employees may be tempted to dip into a petty cash fund to make personal purchases. While some might think that they will pay the fund back, many never do. Checks are also frequent fraud targets. Bookkeepers may issue checks that are payable to themselves while entering incorrect information in your ledger to make you believe that they were used to pay for business expenses.
When your employees are given cards to use, their spending will be more transparent. You will be able to review the purchases that are made by looking at your statements or logging into your dashboard online. Using cards can let you get rid of checks and cash so that you eliminate the risks of fraud that are associated with them.
How construction cards can help your business to grow
Using cards for payments at your business can help it to grow. When you are able to pay the invoices that you receive immediately, it can build goodwill between you and your suppliers. this may help to build your reputation and to grow your business.
Using cards also helps you to prevent losses that you might otherwise suffer because of fraud. You can use the money that you save to invest in the growth of your business.
How a construction card can reduce the risk of fraud
Two examples of construction fraud cases show how using cards could have reduced the risk of fraud. In one case, Deepak Kharbanda, the former chief financial officer of Advanced Construction Technologies and Applied Geokinetics in Mission Viejo, California stole almost $2 million from the construction and engineering companies by making hundreds of withdrawals from their accounts. If cards had been used, he would not have been able to access the accounts. Kharbanda will spend three years in prison.
In another case that occurred in South Charleston, West Virginia, a bookkeeper for the Charleston Building and Constructions Trade Council pleaded guilty to stealing funds from the construction labor union. She prepared and cashed checks, charged personal items to the council’s credit card, and stole money to pay her bills. With debit cards that allow you to set spending limits and restrictions and to get rid of checks and cash, her fraud scheme could have been prevented. The woman was ordered to serve one year in prison and repay more than $141,000 in restitution.
Where to get a construction card
You can find a debit card for a construction business by searching companies online. You should look for companies that focus on helping businesses to manage and control their expenses and that have good reviews.
Reading debit and credit card articles can help you to decide what features to look for. You should also look for companies that have strong reputations and that have been successful in securing funding in their funding rounds. To learn more about construction cards visit our construction debit card and construction credit card hub.
The expense management features and controls from Bento for Business
Bento for Business offers debit cards that are designed for construction companies. They have substantial expense management features and spending controls. You can restrict where your employees can use the cards, when they can make purchases, and how much they can spend.
For example, you can give your flooring guy a construction card that he can use to purchase hardwood flooring from your preferred vendor. If he tries to use the card to pay for anything somewhere else, it won’t work. You can also turn his card on and off remotely so that it won’t work when your employee doesn’t need to make purchases for you. Finally, you can set spending limits on his card by the day or week.
Why Bento for Business is a leading provider
Bento for Business offers debit card solutions to businesses of all sizes. The company has affordable packages from which you can choose. You can order up to 10 cards for $29 per month, and the first two cards are free. Since they are not credit cards, you will not be charged any interest.
Bento does not check your credit when you apply. The expense management features help you to prevent fraud and to get a handle on the spending at your business. There is a free 60-day trial, and you can request a demo to see how the cards might work. Call 866.220.8455 if you have any questions.