Corporate Credit Card Management Best Practices
Corporate credit cards are a powerful expense management tool, as they offer a centralized statement that highlights employee purchases. Moreover, finance teams are able to ensure budgets are followed by adjusting the spending limits when the card is issued to an individual employee, increasing their control over corporate spend.
If your company issues corporate cards, it’s essential to follow a few best practices surrounding card use, expense reporting, and approvals, and have everything outlined in an easy-to-follow policy.
For instance, you may want to limit the types of purchases certain employees can make on their corporate cards. If it is an employee in the field, you may only allow them to make fuel, construction supply, or related purchases. Or, if it is one of your business travelers, perhaps they must limit corporate card spend to travel or meals while on the road. You may opt to require receipts for all expenses, or only for spend over a certain amount, like $50.
Regardless of the guidelines you set forth, the best way to ensure compliance is to have a clearly defined corporate credit card policy that each employee must read and sign before being issued a card on the company’s account.
Extending Corporate Cards to Employees vs. Reimbursement
Not every company opts to issue a corporate card to employees. Today, many corporations still require employees to charge business expenses to their personal cards and submit them for reimbursement. There is definitely value in offering employees a corporate card so they don’t always have to front their business purchases on their personal card.
If your employee has a corporate card, it saves them from having to pay for job-related purchases while on the road, potentially causing cash-flow issues upfront and while awaiting reimbursement. Corporate cards also provide better visibility into who purchased what and where and allow for negotiated rates with frequently used vendors.
As noted by Brex, having access to a “credit card statement featuring all employee purchases can take the stress out of reconciling expenses.” Some of the other benefits Brex highlights include:
- Streamlined management of employee profiles in relation to credit limits and spending restrictions
- Ability to allow only specific types of purchases based on the employee, such as purchases on fuel and vehicle-related services
- It’s easier to keep personal and business expenses separate
Credit Card Agnostic Expense Management
Today, many expense management and payment solutions are launching their own credit card as a way to generate additional profit. If a customer refuses to use the credit card associated with the system, they may face additional processing fees or penalties.
As we’ve stated previously, this is hardly a viable option for many companies today. The reality is that even for companies with wide adoption of corporate card usage, employees will occasionally need to be reimbursed for expenses made on their personal cards or corporate spend will occur on other accounts. Further, customers of companies that push the one card mantra are penalized with unbundling fees if they do not require single source purchasing.
Let’s face it, credit card selection isn’t a one-size-fits-all scenario. Different industries have different expenses—and the credit card issued by an expense management platform may not have the same benefits as a card issued by another financial institution. How you pay shouldn’t be limited or penalized.
TravelBank Enables a One-Stop-Shop for Spend Management
At TravelBank, we believe data hygiene and stellar expense management is a much more likely success factor than forcing everyone to use one corporate card and that your expense management system should be credit card agnostic.
Our system syncs with any corporate card or bank so your finance team has the flexibility to manage all corporate spend in one place, without penalty. As you know, your finance team needs to be able to access clean data and with the right system, the number of expense sources won’t matter as accounts will be easy to track and reconcile.
Successful Management of Your Corporate Credit Card Program
Similar to your corporate travel policy, the guidelines related to your corporate credit card program need to be communicated clearly to employees and documented in an accessible location. As your new employees are onboarded, or existing employees are issued a corporate card, require that they read and agree to the policy. Make sure to include spending limits, purchase types, and required receipts or documentation in your policy. And when issuing cards, set individual spending limits, block merchant categories codes (MCCs) as necessary, and customize expiration dates specific to the cardholder and the business purpose of their purchases.
With your finger on the pulse of what employees purchase and the finance team with additional visibility into accounts, you will reach a new level of control of your company’s spend.
Have more questions about corporate card best practices and the benefits of an agnostic credit card expense management program? The TravelBank team is here to help.