It’s not uncommon for corporations with a minimum of several million dollars in yearly revenue to provide employees, at least certain employees, with a corporate credit card. Corporate cards are often an integral component of expense management policies, but at the same time, there can be challenges that come with them at least in terms of tracking spending for a large number of employees.
There are some things to know before issuing corporate cards or updating a card policy.
The following are some things CFOs and other finance team leaders should keep in mind when it comes to corporate cards.
Expense Management
Sometimes companies make the mistake of thinking since they issue corporate cards, they don’t need an expense management system. Expense management best practices and technology are still essential because even with the reporting that stems from spending on corporate cards, it’s difficult to keep track of, when a company has numerous employees.
As a company leader, look for an expense management software solution that will easily integrate with the cards you’re issuing, make it simple for employees to keep track of receipts and submit them on-the-go, and that will provide you with valuable analytics and visibility to ensure that spending is kept in line and that policies are followed.
The Employees’ Perspective
When a company is thinking about either implementing the use of corporate cards or thinking about making changes to an existing policy, it’s valuable to consider the viewpoint of your employees.
A lot of employees like a corporate card in the sense that they don’t have to fill out expense reports, and an employee isn’t going to be stuck in a situation where they’re going to have to fund their own business expense, but you will need to make it easy for employees to submit receipts and anything else necessary.
At the same time that there are benefits to corporate cards for employees, it’s not without its downsides. For example, corporate cards don’t usually help individual employees accrue miles and benefits, and it also doesn’t do anything positive for their credit score.
Creating Guidelines
With corporate cards, it’s extremely important to put in place and enforce boundaries and spending limits.
There should be a well-defined written policy that puts the employee as the responsible party for the card. It’s also important that there are clear rules on spending and transactions, and companies should regularly review these and update them when necessary.
Spending limits aren’t likely going to be companywide. Instead, they’re going to be based on the individual or department, and the specific needs they have.
Card Reviews
Finally, in addition to regularly reviewing card policies, reviewing usage on a regular basis is also important. Every supervisor or department head should be in charge of reviewing card usage by their employees, and they can collaborate with accounting team members. This will allow for more detailed verification of expenditures, and it will help the company keep tight control over spending.