February 1, 2023
Reviewing contracts annually is part of good cost management at any medical practice. Extending that review to your business credit card could save thousands of dollars every year.
Part of smart practice management is controlling costs, and that means reviewing contracts with suppliers, vendors and services at least once a year. That review should extend to your business credit card, too.
Most modern medical practices rely on a business card. It allows doctors to operate with confidence, knowing they can pay practice expenses even if mistakes in billing, dips in revenue or other problems cause disruption. But there’s no reason to overpay for that security.
Reviewing your card every year ensures that you are getting competitive rates, taking advantage of cost-saving benefits and optimizing your power as a buyer. It’s also not terribly difficult. Here are some best practices for evaluating your current card and pointers for what to look for in a new one.
Rates are always important, but they are hardly the only measure of a smart financing option. This is especially true if, like many practices, your business pays off its balance each month. If you are not incurring meaningful interest charges, you can shop for a card based on a bevy of cost-saving features that can add up to thousands of dollars over the course of a year.
Rarely is there a good reason to pay an annual fee. Unlike personal cards, where the fees are sometimes low enough to be overlooked, fees on physician cards can run to hundreds of dollars. Expenses like these erode value quickly. If your current card charges an annual fee, it's time to make a change.
Of course, annual fees are not the only expense that drains value. Some card providers charge hefty fees to get additional cards for a partner or office manager, while others give you those benefits for free. When you look for a business credit card, take your needs into account and find a card that will not levy additional charges to get those needs met.
A card designed for physicians is more likely to offer benefits that apply to a medical practice. For example, medical cards often partner with medical vendors to provide savings on the supplies you use. If you buy $1,000 in supplies each month and your new card offers you a 10% discount, that’s $100 a month—$1,200 a year—back in your pocket, all for supplies you are already buying.
Cash-back systems can offer real savings. Many are tiered, offering different percentages for different types of expenses, and some have caps on the overall amount of rewards you can earn.
To simplify the shopping process, start by looking for the base rewards multiplier. For many card providers, this is just 1%, but many cards will give you 1.5% across the board, which is a solid start. The real value for private practices is in looking for the highest percentage you can find on medical practice expenses. A provider that can give you 4% or more is an excellent choice, even if it is on select vendors. You can always shift vendors to maximize your savings on basic goods. Next, make sure the rewards are unlimited. A card that offers high, unlimited rewards on your most common spend is a smart financing option.
Of course, you can go further. Those who want to maximize card benefits can look at how points convert to statement credits. Many providers offer lower redemption values. For example, your points may be worth only 60% of the value. This adds up quickly! Cards that offer a higher redemption value are a better deal.
A business credit card is not just a financing option. It can also be a tool to help streamline practice management. For example, a card that integrates with bank accounts and accounting software such as Quickbooks can make tracking finances and preparing tax returns much easier. A card that offers receipt matching with automatic reconciliation, allowing you to text or email receipts to your card company to have them categorized, can save you time.
Some cards offer innovative features that allow a practice to get creative. For example, Brian Miller, director of operations and business development at The Spiegel Center, a plastic surgery practice in Massachusetts, says he uses a “virtual card” feature to track spending on their in-house operating room. “One of the largest impacts on the budget for an operating room is inventory,” he said. “What I have done is create virtual cards for every inventory vendor. At a quick glance, I can see how much is outstanding and how much I've spent.”
Business cards offer many benefits that can save money. For example, a free membership to Costco Executive can save money on office supplies. A free membership to Amazon Business Prime can save money on shipping. While these may seem like bonuses, the membership fees and the savings throughout the year can add up to hundreds of dollars.
From additional cost savings to new rewards and benefits, evaluating your business credit card annually can pay off in tangible ways. The time you spend could be worth thousands of dollars over the course of the year.
To learn what the Nitra Visa Business Card can do for your practice, tour our services or call (845) 443-7752 to consult with a Nitra specialist about your needs.
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