Corporate Credit Cards: Pros and Cons

Nowadays, corporate credit cards are an effective alternative for paying business expenses.

Corporate credit cards are business cards, physical or virtual, distributed to employees who incur expenses on behalf of the company.

As a CFO or business manager, your mission is to choose the best payment method that meets the needs of your employees, while ensuring better management of business expenses.

In order to help you decide, we will present you with the pros and cons of using corporate credit cards. Let us start with the main reasons for implementing a corporate credit card.

Avoid your employees incurring expenses on their personal budgets

By using a corporate credit card, your employees no longer have to advance large sums of money from their personal budgets during their business trips.

Following the classic process of business spend management, employees must advance expenses from their personal budgets to cover expenses, within the framework of a professional activity or a business trip.

They are then required to submit expense reports accompanied by proof of payment in order to be reimbursed a few days or even weeks later. This method, while effective, is far from being efficient. Your employees find this method tedious, time-consuming, and even penalizing. In fact, 83% of employees are in favor of implementing an automated expense report management solution that makes their lives easier and helps them better manage their expenses.

Your employees might not have enough personal resources to cover all the necessary business expenses. They might be in a hurry to be reimbursed for personal reasons, without wanting to tell you.

By using a corporate credit card system, you can top up your employees’ cards with specific amounts, determined in advance based on your financial planning, and therefore, save them this inconvenience.

Prepaid bank cards should cover all your employees’ professional expenses. In unforeseen situations where your employees might need more financial resources; you can simply transfer money directly to their cards.

In this way, you save your employees from incurring expenses on their own budgets.

They will be able to fully dedicate themselves to the smooth running of their professional activity, rather than worry about the costs involved.

Save time for your employees, on all levels

Corporate credit cards save time for your employees at all levels of the organization.

Starting from the employee who incurs business expenses, to accounting who verify expenses and reimbursements, to managers who check that the amounts spent comply with the terms of the corporate expense policy… All employees gain in productivity thanks to company cards.

And as mentioned earlier, employees no longer have to incur expenses from their personal budget. In addition, they no longer spend hours creating expense reports in Excel, nor do they have to save and attach expense receipts and send them to the accountants.

In fact, thanks to the company’s credit card, all payments made during the business activity are directly recorded in the company’s bank account as well as on the third-party expense report management platform, which automatically manages detailed expense reports and archives the receipts in digital format.

Improve business spend tracking

When a traveling employee uses their unique corporate card to incur expenses, their data is passed directly to their superiors and accountants via a digital platform.

Corporate cards, therefore, make the expense tracking process much easier.

Managers can easily view their employees’ expenses in real-time and check that they comply with the spending rules in place.

Accountants in turn can generate very detailed reports of transactions made by each employee.

Company cards can be connected to expense management software, further optimizing the process.

By eliminating reimbursements thanks to corporate credit cards, all you have to do is justify your expenses.

Managing expense reports becomes even faster and easier. Employees no longer waste time creating Excel expense reports or transmitting invoices and receipts to accountants.

Everything is done automatically with a few clicks, and in a secure manner, which brings us to the next advantage.

Secure your business expenses with corporate credit cards

In the event of theft or loss, the credit card in question can be blocked in one click. This is why it is more interesting to give prepaid company cards to each of your employees on the move, instead of getting a single card and passing it around among employees.

In this case, when an employee loses their unique card, or it gets stolen, other employees will not be blocked, and they can continue their activities at a normal pace.

All your sensitive information is protected through a secure digital platform: your data can also be encrypted to allow a higher level of security.

Corporate credit cards also allow better tracking of employee expenses, which limits or even completely eliminates any inconsistencies or attempted fraud.

The financial and administrative department tries to ensure that company employees comply with the rules communicated in the expenditure policy and to detect fraud attempts that could penalize the entire company.

By using corporate credit cards coupled with an integrated expense report management solution, it is almost impossible to incur expenses and pass expense reports that do not comply with the rules of the expense policy implemented.

Simplify online and international payment

Using a corporate credit card opens up several payment options for your employees. They can make payments on the Internet to book their accommodation or transport tickets.

Business cards make online payment very easy. These payment methods are flexible and give your employees on the move the option to pay in foreign currencies, without having to go through exchange offices.

During business trips, corporate credit cards are less prone to loss than traveling with a large sum of cash. Everything is secure and adapted to the needs of each employee, and according to the Currency of their destination.

Limitations of corporate credit cards

In order to decide in an objective and more academic way, it is wise to also present the drawbacks of Corporate credit cards.

Corporate credit cards, like any other expense management solution, have some limitations. There are, for example, merchants who only accept payment by credit card for purchases exceeding a certain amount. This can be avoided if the company establishes partnerships with service providers, brands, and restaurant or accommodation chains.

Business bank cards obviously make it easier to manage business expenses. CFOs and team leaders will have a real-time overview of the expenses incurred by each employee on a business trip. However, corporate credit cards alone are not enough. To optimize the expense management process in a company, it is important to acquire a complimentary expense report management solution.

While cards make payment easier for your employees and simplify expense tracking for managers, they don’t eliminate the daunting task of creating, processing, and transmitting expense reports.

It is true that paying by prepaid corporate bank card involves the elimination of the reimbursement process since business expenses were incurred from corporate budgets allocated in advance. However, it remains imperative to justify your business spend by preserving receipts and invoices.

Each employee must keep their supporting documents (receipts and invoices) and create detailed expense reports, which will then be sent to the finance department, which in turn is responsible for checking each entry and ensuring that everything is in order.

In order to further optimize business expense management processes, and automate your teams’ efforts, use an integrated expense management solution such as Expensya, which allows you to efficiently manage your professional expenses by extracting all expenses paid with your company credit card.