By Nilesh Dadpe, VP — Sales & Partnerships, India (@NileshDadpe)
What is a commercial card?
A commercial card is an unsecured line of credit extended by a credit card issuing bank to any eligible corporate.
These cards offer a standard feature of a 30–45 days repayment credit period once the card is used (Card cycle needs to be considered).
What is Days Payable Outstanding (DPO)?
Days payable outstanding (DPO) is a financial ratio that indicates the average time (in days) that a company takes to pay its invoices to its suppliers, vendors, or financiers.
DPO indicates how well the company’s cash outflows are being managed. Higher values of DPO may not always be positive for the business as it may signal a cash shortfall and inability to pay.
How can PayMate help in extending DPO by using commercial cards?
Commercial cards can be used by the corporate to make payments (vendor, GST, corporate taxes, rent, etc.) on the PayMate platform.
Once the card is used, the corporate can utilize the period of 30–45 days to repay the bank, thus extending their days payables outstanding. Using the extended credit period of commercial cards helps corporates reserve their cash for other crucial payments while making all supplier payments on time. This increases supplier satisfaction as they get their working capital in time for business continuity.
