Expense management is somewhat comparable to balancing a lemon on a spoon. Every day, businesses must balance limiting spending and adhering to regulations. They generate millions of dollars in income, but they also spend a significant amount of money on necessary expenses like business travel.
When a business is small, getting this balance must be straightforward. However, controlling and managing expenditure becomes more difficult when a business opens more offices and hires more people. Expense tracker and accounting systems may just not seem to be making the cut during this phase.
Corporate credit cards could serve as stabilizers in this scenario.
What are corporate credit cards?
Corporate credit cards are offered to the employees of a company to cover authorized business costs. This ensures employee pleasure because business travelers do not have to pay from their own pockets.
These cards are issued directly from the credit card company or business account provider, and they bear your firm’s name, financial details as well as the name of the respective employees. Corporate credit cards are highly efficient in terms of setting spending restrictions, and giving access to rewards. Let’s explore the perks of a corporate card in detail:
Improved expenditure management
Before handing over business credit cards to travelers, the firm’s finance manager establishes spending limitations on how much they can spend overall or per transaction.
When a transaction is made, the card automatically sync payment details into the account management system. The finance manager can now validate expenses without the need to store paper receipts. They get a clear understanding of the staff spending. They can obtain detailed information about each transaction, so that if a receipt is lost, the finance team may quickly retrieve information from the cost management system.
Improves compliance and reduces expenditure fraud.
Corporate credit cards have put an end to receipt manipulation, which occurs when employees give phony receipts for expenses or overstate the actual amount spent. The finance team’s access to all transaction details eliminates any potential loopholes.
The credit limit can be replenished for the same corporate card which was used for the purchase, and this can appear live in the transaction feed that the finance management may view. As a result, the employee can no longer hide or claim payment for their returns.
Advanced security
Corporate credit cards are designed with numerous layers of security to prevent theft, accidents, abuse, and loss. When you lose your card on a business trip, you can simply call the manager, who can report this to prevent fraudulent transactions. The credit card company would usually issue a new card to the sales manager while blocking the old one. A new card generally takes 7–10 days to be issued and delivered, however it can also be issued virtually.
Read also The Rise of Holographic Stickers in 2024: Unveiling Their Business Potential
Certain business credit card issuers give additional protections, such as emergency cash advances. They may also provide perks such as car rental insurance coverage (in the event of theft or an accident) if the employee pays for the rental services with the card.
Credit Card Rewards
Maintaining company cards takes effort, but it is worthwhile. The finance staff is responsible for monitoring credit card balances and making timely adjustments on each employee’s corporate card. But they also get to handle credit card rewards in a way that benefits the corporation. Corporate credit cards provide the firm with value in the form of rewards, which range from rebates to discounts on air travel, rentals, and shopping at certain outlets, as well as cash back offers or gift cards that can be reinvested in travel management.
Here’s the takeaway
Corporate credit cards are an excellent solution for major corporations that have a significant number of business travelers and need to keep track of their travel and entertainment expenses. Corporate credit cards allow the finance staff to set spending restrictions, conveniently track employee spending, and check compliance. They can also avoid the tiresome chore of manually reconciling transactions. Employees benefit as well, as they no longer have to spend their own money and wait for repayment.
Corporate credit card programs enable immediate access to finance, allowing businesses to capitalize on opportunities and streamline payments, thereby improving cash flow. Furthermore, the value proposition for corporate credit cards grows as credit card issuers enhance their programs with financial management tools, virtual cards, and spending limits.
