Why should companies issue corporate cards? Some worry they could increase the organization’s financial exposure, risk people piling up significant expenses, and be difficult for finance teams to deploy and manage over time.
Corporate card or payment cards can providemultiple financial, operational, and security benefits.
First, a primer on options. Depending on their function and spending needs, corporations give employees different cards. The top three are:
A corporate card is used for travel and entertainment expenses. They can have 100% corporate liability (for payments) or split liability between the business and the individual.
A procurement card/purchasing card (also called a “p-card”) is used for B2B purchases. Some cards can be used at predefined vendors or places. These cards are very restrictive for employees and are primarily used for company transactions.
A “one-card” that works like a corporate card but includes spending and vendor limits. These cards mix p-cards and corporate cards.
Each form of the card has distinct restrictions and oversight, so they have different target consumers. A p-card could be used to buy office supplies or modest equipment, whereas a corporate card is used for travel. As card programs grow, most organizations can find a suitable one.
What are the benefits to companies that employ these programs?
Classifying all transactions by incorporating card statements into an expense report simplifies expenditure analysis reporting. Centralizing spending information in the same format for all employees improves a finance team’s ability to evaluate data accurately and efficiently. Transaction data may be easily evaluated using visual dashboards to inform financial decisions.
This data can be used to track spend versus budget, negotiate volume discounts with vendors, and identify inefficient spending areas for organizational change.
Easier cost processing
Integrating corporate cards and expense management solutions streamlines expenditure management. Importing credit card statements into the expense report gathers granular transaction details. Cardholders add details to expense reports (billing code, client data, etc.). The expenditure management system can export this data to the ERP to bill clients more correctly and quickly.
Expense fraud is possible when employees pay for things and upload receipts and photos. Adding higher tips to restaurant receipt copies, buying products, submitting receipts for reimbursement, returning them, buying business class seats, and downgrading to the economy are all fraudulent costs.
Providing staff with corporate cards eliminates all of these possibilities. First, the precise amount charged is always provided by directly importing credit card statements, making fraudulent receipt manipulation impossible. Second, refunds can’t be processed onto a different card than the one used for the purchase; thus, workers can’t use these schemes.
Any fraudulent card purchases should be the employee’s responsibility.
Another important benefit is employee satisfaction. Staff who travel often or schedule conferences might raise thousands of dollars per month. A corporate credit card can minimize the need to pay cash. This is especially essential for firms that only process 1-2 expense reimbursements per month; any delay could force travelers to pay credit card bills before expenses are repaid.
Giving a corporate card to employees communicates the message that the organization trusts and cares about them.Employee satisfaction is a major topic for many firms; thus, this is a key reason to consider employee card programs.