What Businesses Should Know About Corporate Cards ?
For mid-sized and large businesses, whether they already issue corporate cards or not, there are still some considerations. If you’re on the finance team of a large company, or a growing company, and you already issue corporate cards, you may wonder if it’s time to reevaluate which one you’re using. Also, you might be ready to consider integrating these expense cards with your expense automation software. While you’re at it, you can evaluate the current corporate card you’re using and ensure it still fits the needs of the business and your employees.
For larger businesses that don’t yet issue corporate cards, they may be looking for a more streamlined way to manage T&E costs, and a corporate card is an excellent way to do that.
The following are some things to know about corporate cards from the business end, and in some ways, from the employees’ end as well.
Risk of Abuse by Employees
For businesses that haven’t yet introduced corporate expense cards, there can be a sense of apprehension related to the potential for abuse of the card by employees. There are fewer protections for business cards than personal cards in many ways, however, there are a lot of things businesses can do.
One of the best things to do is set it up so that real-time spending information is available. When a corporate card is used along with modern expense management software, it can actually significantly reduce the risk of employee abuse as it pertains to T&E spending.
When a company is considering the right cards for the needs of the employees, there are actually some requirements put in place by the card companies as well. Not every business is going to have access to every kind of corporate card.
For example, some of the top corporate cards may have features such as an unlimited number of employees allowed as authorized users, but at the same time, there can be stipulations related to whether a company is public or private.
Types of Card Relationships
For smaller businesses, some cards let employees be considered authorized users on the businesses’ card account. This means that the business owner or whoever is in charge of finances can set the spending limits for individual employees. The business owner is also who’s going to earn rewards on that spending. However, authorized users aren’t responsible for making payments either.
For larger companies, the relationship is more often employee reimbursement. In these situations, larger companies will let employees use their own cards, and then they submit their expenses. Employees actually really tend to prefer this scenario in most cases, especially if there’s a simplified way for them to manage their expenses through the use of software and mobile technology. When employees can use their own cards and then just submit expense reports, they’re earning the rewards on the cards, and they’re getting reimbursed to pay off the charges.
There are pluses and minuses to corporate cards, as well as scenarios where employees use their personal card and get reimbursed. Deciding what’s going to work best is going to depend on the individual organization, and in some cases, it’s helpful to ask employees what they prefer.
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