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Using Corporate Credit Cards To Manage Employee Expenses

6 minutes reading time

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Corporate credit cards are a popular way of managing expenses in larger companies. They make it easy for employees to pay for work-related expenses. Meanwhile, they give Financial Controllers a better view on spend.

So why aren’t corporate credit cards used by more companies, especially smaller ones?

In this article, we’ll dive into what corporate credit cards are, how to make them work for employee expenses. And we'll be teasing some alternatives.

What are corporate credit cards?

In essence, they are the same as a personal credit card. But the account linked to that card belongs to a company, rather than a person. Employees using corporate cards must provide proof of purchase. The Accounting department needs these for reconciliation and tax purposes.

Corporate cards are often given to employees with a lot of expenses. Think travelling employees and salespeople. Before corporate cards, these employees would submit multiple expense reports for a trip or prospection. Corporate credit cards allow them to pay for said trip without being out of pocket.

How do corporate credit cards work?

Again: like a personal card. Except the money comes out of the company’s account. And the company or CFO receives the monthly statement, not the user.

Although this allows for visibility and cash flow, that visibility is delayed. The statement arrives monthly, days or weeks after the purchases.

The card administrator can set limits on spend and suppliers for these cards, but they can still be misused.

How to make the most of corporate credit cards for employee expenses

Popularise company credit cards

In most cases, not every employee will have a company card. This can cause tensions between employees, made to feel untrustworthy or undeserving.

Company cards are often issued to department heads. This means that employees must file expense reports, a clunky solution. Or they have the option to track down the card, which may be on holiday with said department head.

This limited availability can lead to delays and, ultimately, increased costs.

One solution here could be to issue corporate cards to more people, but it's not realistic. Another option is to look into virtual cards, a popular solution for companies with many "one-time" expenses.

Simplify business credit card receipt management

Employees using corporate credit cards must provide proof of purchase for every transaction. But who hasn’t misplaced a receipt? Or pulled it out of a coat pocket only for it to have become illegible? Some points of sales don’t issue receipts at all anymore, except on request. All this makes business credit card receipt management more annoying to deal with.

Using an expense solution with a mobile app simplifies receipt management. Users take a picture of their receipts to store them on the spot. Meanwhile, OCR extracts the transaction data, reducing the manual work of submitting an expense. And if the card is in the purchaser's name, the transaction and photographed receipt are automatically matched.

Increase visibility and control on spend

Because the card statements arrive long after the purchases, contesting charges is difficult. How do you tell an employee who spent company money in good faith that they won't be reimbursed due to small print in the policy? Even if a purchase is out of policy, that conversation can lead to disgruntled employees. Creating higher turnover and, ultimately, higher costs.

Besides, Finance teams need real-time oversight on spending to flag problematic patterns. That's difficult when the card statement only comes in monthly. It's even harder to react quickly and efficiently to suspicious or out of policy charges.

Using an expense solution with corporate credit cards gives Finance teams control on spend limits, cost categories and more. As do easy to use dashboards and reports, that can be analysed and shared with management.

The integration feeds your card transactions into your expense solution daily or weekly. All you have to do is watch as your grasp on spend control increases with that additional visibility.

Eliminate the risk of card fraud

Of course, we would be remiss if we didn’t mention the risk of credit card fraud. Fraudsters don’t even need the physical card anymore. They can gain access to your details and use them for online purchases without ever holding the card.

While there are employees with nefarious intentions, we prefer to assume the best. But for those cases where it's needed, there are AI solutions to help you detect fraud.

SpendController, for example, automatically controls the data extracted by the OCR with the data the user entered. If the two don't match, SpendController issues a red flag for manual control of the expense.

Why use corporate credit cards for employee expenses?

With all that said, why do we suggest using corporate cards for employee expenses?

Smarter spend management

Corporate cards give management visibility on company spending, more than cash or personal cards.

With the help of expense management solutions such as Mobilexpense, companies streamline employee expense reimbursement while eliminating paperwork and associated frustrations.

Besides, digital expense solutions automate adherence to business policies and regulatory compliance, especially when used with corporate credit cards.

This combination allows you to:

  • Standardise your expense process.
  • Monitor corporate spending in real-time, deep diving into the spend per business unit.
  • Reimburse employees' business expenses faster, with less back and forth.
  • Streamline your expense process, reducing the number of time-consuming manual tasks each person needs to fulfil.
  • Increase visibility into spend in real-time while tracking positive or concerning trends.

More flexible employee business spending

Corporate cards give employees the freedom to spend as they best see fit. They also give them accountability. Furthermore, they can lead more frugal spending. When employees know their spending is scrutinised every month, they tend to be more careful.

Giving employees corporate credit cards for expenses further increases employee satisfaction by expediting the expense process. And not leaving them out of pocket for hundreds or thousands of euros each month.

By combining the use of corporate credit cards with an automated expense management system, your employees

  • Spend less time on expenses, and more time doing work that matters to them and the company.
  • Feel more responsible and accountable for their spending.
  • Free themselves of the worry related to reimbursements.

Company credit cards for employee expenses done right

Our customer Recticel is a master in the art of using corporate cards to manage employee expenses.

Recticel chose Mobilexpense for our ability to integrate with their multiple corporate credit card providers, travel and other providers such as fuel cards, car rental agencies and mobile phone service operators as well as a VAT recovery agency.

Integrating as many types of spending as possible into Mobilexpense has enabled Recticel to achieve 1 million euros in savings. Part of these savings are down to simplified administration. The rest is down to spend management and empowering employees to use tools with embedded savings while improving traveller experience.

As a result, Recticel spends only € 3.2 to process an expense report. The administrative cost of an additional credit card transaction on an expense report is down to nil versus € 5.3 for an invoice.

Conclusion

Corporate credit cards still present some challenges. Yet they are by far a better solution to manage employee expenses than old fashioned cash or private cards and spreadsheets.

Corporate credit cards make for more efficient spend management. They also allow for more flexible employee spend and better visibility. And besides, corporate cards integrate with expense management solutions, which spreadsheets… do not.

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Reach out today to simplify your expense management with corporate credit cards and Mobilexpense.

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Posted on 16 May 2022

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