Having a business debit card can help you keep track of your company’s expenses and streamline your accounting processes. However, before you apply for a business debit card, there are a few things you should know. Keep reading to explore some of the main things to expect when applying for a business debit card, from the PayAlly team.

What is a Business Debit Card?

Firstly, let’s kick things off with a definition – what is a business debit card, exactly? A business debit card works in a very similar way to the personal debit card that you probably use all the time to make payments. However, the main difference is that this card allows you to make purchases using the funds in your business bank account.

Unlike a credit card, a business debit card does not allow your business to borrow money. Instead, it deducts the purchase amount directly from your business account. You can use a business debit card to pay for everything from basic office supplies to travel expenses.

Why Get One?

A business debit card can be a valuable tool for your business to have. It can help you:

  • Keep track of expenses: With a business debit card, it becomes easier to track your corporate expenses in one place. This can make it easier for you to stay on top of your department’s budget and make sure that you’re not overspending.
  • Streamline your accounting: By using a debit card, you can eliminate the need for petty cash and reimbursement forms. This can help to simplify your accounting processes and save you time.

How to Apply

Now that you know more about the benefits of a debit card, let’s talk about the steps involved in applying for one.

Step 1: Choose a Provider

The first step in applying for a business debit card is to choose a bank or provider. Look for a provider that offers business banking services and has a good reputation.

Step 2: Gather Your Business Information

Once you’ve chosen a provider, you’ll need to gather some information about your business. This might include:

  • Your business name and address
  • Your business registration number
  • Your business type, i.e., sole proprietorship, limited company, or partnership
  • Your business turnover
  • Your business bank account information

Step 3: Fill Out the Application

Next, you will need to fill out an application for a business debit card. You may have a range of options available for doing this, including online, over the phone, or in person at a bank branch, depending on the provider. Typically, the application will ask for your personal and business information. You may also be required to provide proof of your identity and residential address.

Step 4: Wait for Approval

Once your application has been submitted, you will need to wait for approval. This can take anywhere from a few hours to a few weeks, depending on the provider and the complexity of your business. If your application is approved, you will be notified and will usually receive your business debit card in the post. Depending on the provider, you may be able to start using your business debit card immediately.

Things to Consider When Applying

There are a few important things to consider before you apply for a business debit card. These are as follows:

  • Accessibility: You will want to manage your expenditures and you want quick access to do so. Check if your provider offers a mobile app service that’s available on iOS and Android.
  • Fees: Business debit cards may come with fees, such as transaction fees or an annual fee. Some may not. Some may come as supplement to an existing account. Be sure to carefully read the terms and conditions to understand the fees you may be charged.
  • Interest rates: While debit cards do not allow you to borrow money, you may be charged interest if there is an overdraft on your account that you use. Make sure that you understand the interest rates before applying.
  • Credit checks: Some providers may perform a credit check as part of the application process. This may impact your credit score, so make sure that you understand the provider’s policy before you apply.
  • Security: Debit cards can be a target for fraudsters, so it’s crucial to choose a provider that takes security seriously. Look for a payment firm or bank that offer fraud protection and other security features to protect your business.
  • Additional features: Some cards may offer a range of extra features, such as integration with accounting software, spending limits, and more. Consider the features that are important to your business and look for a card that offers them.

Using a Business Debit Card Effectively: Tips and Strategies

A business debit card can be a powerful tool for managing business expenses. However, using your debit card effectively requires some planning and strategy.

Set a Budget

Before using a business card to pay for business expenses, it’s crucial to set a budget. Doing this can help prevent overspending and make managing expenses easier. To set a budget, start by reviewing business expenses from the previous year to get a baseline for expected expenses. Then, adjust the budget as needed based on any changes in your business, such as growth or expansion.

Keep Personal and Business Expenses Separate

One of the most important aspects of effectively using a business debit card is to keep personal and business expenses separate. This can make it easier to track your business expenses, simplify accounting processes, and avoid potential tax issues. To separate your personal and business expenses, have separate bank accounts and cards for each. This will help you ensure that all business expenses are paid for with the card, rather than getting mixed up with personal expenses.

Track Your Expenses

Tracking all expenses is crucial for using your debit card as effectively as possible. Doing so will help ensure that expenses stay within your budget and can help keep accounting processes as simple and straightforward as possible. To track your expenses, consider using an app or a spreadsheet to record them. Categorising your expenses will help make it easier to reconcile them later.

Review Statements Regularly

Reviewing your card statements regularly is another crucial step in effectively using your business debit card. Doing so will help ensure that all your expenses are accurate and accounted for. Plus, regular reviewing of your statements can help you identify any potential issues, such as overcharges or fraudulent charges, as early as possible.

Use Card Controls

Many business debit cards offer a range of card controls that can help you prevent overspending and protect your business against fraud. For example, you may have access to features such as spending limits, restricting certain types of purchases, and blocking transactions in certain locations.

Plan for Large Expenses

Large expenses such as business travel or office equipment can be more difficult to manage with a debit card. To effectively manage large expenses and minimise the impact on your cash flow, consider planning and setting funds aside specifically for these expenses. You may also want to consider using a business credit card for larger expenses, as this can provide more flexibility.

Prioritise Security

It’s crucial to ensure that you keep your card information secure. Never share your card information with anybody and keep your card in a secure location when not in use. If your card is lost or stolen, report it to your provider as soon as possible so that they can cancel and replace the card. If possible, use any features offered by your provider, such as the ability to ‘freeze’ the card, if you believe it has been lost or stolen to prevent unauthorised access.

Monitor Your Cash Flow

Finally, it’s essential to monitor your cash flow carefully when using a  debit card. While a business debit card can help streamline expenses, it’s crucial to make sure that your business has enough cash available to cover expenses. Regularly review your cash flow projections and consider adjusting your budget or seeking additional funding if needed.

Applying for a business debit card is generally a straightforward process. But it’s important to take the time to choose the right card for your business needs. PayAlly’s Mastercard Business Debit card is a secure and efficient way to manage your business expenses, with a range of benefits including advanced safety features, online and in-store transactions, recurring payments, ATM withdrawals and deposits, and the ability to use the card in multiple currencies.