Accounts Payable Disbursements using Bank Credit Card

Posted on: October 23, 2014 | By: Andy Vitullo | QAD Financials

The idea of using bank credit cards to settle open accounts payable invoices may sound like a mundane idea. This new approach, currently sponsored by one of the larger US banks, is an approach in which financial executives should take notice.
Certain large US banks are contacting their customers and offering a new service that can provide the following benefits;

  • Increase your float of disbursed cash to the length of your credit card terms.
  • Settle payments to your suppliers faster than physical disbursement checks.

A key benefit of this service is your accounts payable team does not have to maintain bank data from your suppliers in your ERP system. The bank is responsible for maintaining that data.
You will simply provide an electronic file of your suppliers and their payments to the bank. The bank will;

  1. Charge your credit card account for the amount of the disbursement run. 
  2. Remit Payment to your supplier based on the data provided to the bank via the electronic file.
  3. Require you to pay the balance of the Credit Card next month based on the terms negotiated with the bank.

This mundane idea will save you company money. Take Notice!

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