- Accessing Capital
- Enable Growth
Purchasing patterns and cost analysis with Commercial Cards
“With traditional manual payment processes, it can be a challenge to oversee costs and analyse purchasing patterns”, says Lewis Sun, Regional Head of Product, Asia Pacific at HSBC. In the latest article in our B2B payments series, he explains how card-based solutions can help improve cost analysis, purchasing trends and working capital by using online reporting, such as Mastercard’s Smart Data – HSBC’s online management and reporting platform.
A Commercial Card is more than just a credit card for employees to pay for day-to-day expenses. It can also be used for a wide range of purchases – from small transactions, to regular monthly purchases of services or goods, to paying key suppliers. And by introducing Commercial Cards into the procurement process, a purchasing department and treasury team can benefit from improved operations and cost savings.
Information leads to working capital optimisation
A treasurer with greater visibility of the organisation’s card spend is in a better position to identify potential cost savings.
When a company uses HSBC’s Commercial Cards for procurement, all the transaction data is centralised in Mastercard’s Smart Data, HSBC’s online management and reporting platform that allows data to be extracted and analysed through insightful reports.
It’s an online reporting tool that allows administrators and treasurers to pull up information on transactions both at a company and at an individual level. Its flexible reporting function has standardised report templates, as well as 200 fields that can be used for customised reports to suit the company’s own reporting or analytics requirements. The result of all this functionality is that a treasurer can take a bird’s eye view of the company’s card spend, before diving into specific spending patterns.
A treasurer that has more insight at their fingertips is in a stronger position to identify areas of spending that can be made more efficient, as well as reduce overall spend. For example, centralised data makes it possible to create efficiency gains that saves time and people cost. Ultimately these savings contribute towards the goal of optimising cash flow.
We can see these dynamics in play by looking at how easily accessible reporting tools improve the reconciliation process. It can improve the production cycle, and help the financial team to develop a strategic working capital plan.
A treasurer can also take advantage of Commercial Cards integration to reduce labour-intensive manual work and conveniently feed data into the organisation’s existing Expense Management System (EMS) or finance system. The result is that data is automatically centralised into one place, where it can be accessed by any relevant party for forward planning.
Better cost negotiation with suppliers
Paying with a Commercial Card means that all the cost information is centralised on Smart Data, making it easier for procurement to negotiate costs in the future
Fast payments made with Commercial Cards can make a big difference with your supplier negotiations. Paying by card means that the supplier receives the money faster, often within two or three days. That helps keep their supply chain moving since they are less reliant on credit, and in return, the buyer can start to negotiate for better purchasing terms. At the same time, both sides become less reliant on traditional payment channels, like cheques and wire transfers, which helps reduce labour costs all around.
Smart Data role here is to provide visibility of all transactions, and create customised reports that allow stakeholders to compare the costs from different suppliers and analysis spending over a period of time. The more detailed the analysis, the stronger the company is when it sits at the negotiating table.
Better relations with suppliers, along with improved visibility and reporting are among the key benefits that a company can enjoy with Commercial Cards. To learn more about how HSBC’s Commercial Cards reporting tools, such as Smart Data, can enhance the cost analytics, please contact your HSBC Relationship Manager. In the next article in this series, we discuss how Commercial Cards fit into the broader evolution of digital payments.Read the next chapter now