How to choose the right corporate card program

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Alfie Marsh

Published on January 17, 2022

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6 min

Have you ever questioned whether your employees are submitting inflated air miles and buying personal dinners on their business credit card?

Exaggerated expenses are thought to be a tiny drop in the ocean when it comes to problems involving the expense reporting system, but 42% of employees acknowledge a lack of checks around expense fraud in their workplace.

In this post, we’re going to cover how to clarify your business spending with a corporate card program, and how to choose the right corporate card program for your business.

What is a corporate card program?

A corporate card program is a collection of corporate expense cards issued to specific employees for approved company expenses. These are not necessarily credit cards; it's more common that businesses load up accounts and cards with a prepaid budget amount for business spending.

Sometimes, cards are issued to employees for specific events, and others have access to corporate cards for monthly or quarterly periods. The business essentially provides credit to their employees for each eligible company-related purchase.

Why are corporate cards necessary?

In some companies, employees are expected to temporarily incur expenses relating to business activities (such as business travel), which can leave them stuck financially. But corporate cards eliminate the need for employees to cover the cost, making the entire spending process simple.

Moreover, smart corporate card programs integrate with cloud-based or digital accounting software. This can make the entire expense and reporting process more efficient and streamlined. Spending can be seen, categorised or approved in real time.

Therefore, companies often issue employees cards to avoid the lengthy reconciliation process that comes with business spending on personal cards, and simplify the overall business spending process.

How corporate cards differ from personal credit cards

Corporate cards are somewhat similar to personal credit cards in the way that they work. But they’re applied specifically to businesses - a different sector of the spending market.

Expense reporting

Of course, the most obvious difference is that corporate cards deliver expenses to the business through direct online banking, whereas personal credit cards are likely to go through an individual employee first. The latter essentially adds an extra step and creates an expense reporting process:

  1. Employee incurs a business expense on their personal card

  2. Employee provides proof of purchase to finance team

  3. Finance team verify and log expense into reporting system

  4. Finance team reimburse employee

Relying on employees’ personal credit cards makes the expense reconciliation process longer than it needs to be. Remove the extra step by issuing corporate credit cards for integrated expense management.

Accessibility

Fortunately, most corporate cards are facilitated by the same technology as personal credit cards. The market leader in this area is American Express, issued to 63% of Fortune 500 companies, although Mastercard and Visa are also very popular options.

This makes business spending with a corporate card just as accessible as spending with a personal credit card.

But there is one wrinkle: company cards are only accessible to employees who actually have them. If you’re issuing 10 cards for 100 staff, they’re not really accessible to 90% of the workforce. And we all know that shared company cards are a serious risk - plus just messy to work with.

As we’ll see below, you need a company card program that’ll grow with your business and be useful to every single employee.

Credit limits

Since the approval process for corporate cards relies on the company history, you can often get access to higher credit limits than individual employees would usually be allowed through their personal accounts. Which may be important to some companies and their teams.

But for businesses, the more interesting factor related to limits is the ability to set custom limits for each user. If you’re worried about giving employees unrestricted access to company funds, you shouldn’t be.

Good, modern corporate cards let you set and adjust limits based on the team, the job title, or the individual themselves. You could give all managers a limit of X, versus Y for other employees. You could give sales teams more than marketing because they tend to travel more.

You could even set limits one-by-one based on the exact needs of each employee. And ideally, you’ll do this quickly from a central tool or dashboard.

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Rewards programs

The main caveat to a corporate card program is that the rewards programs are often incomparable to personal credit card programs. It means that employees can’t build points and earn rewards that they usually would. This can include discounts or freebies for corporate travel, such as:

  • Airmiles

  • Cash back

  • Hotel stays

In most cases, these aren’t available to employees. But this typically is not an important factor for corporations when deciding to create or move to a corporate card process. What’s more critical is the time saved for finance teams, and the burden (or lack thereof) placed on individual employees.

How to choose the right corporate card program

There are so many options for corporate card programs, and decisions to make around the type of program you choose. For example, do you want business credit from the banks, or pre-approved top-up capabilities?

Here are some other corporate card program features to consider:

Fees

Extra charges are an easy way to rack up costs on a corporate card program. Most credit card companies will charge an annual fee, so ensure that this is as low as possible to save on application costs. But some companies also charge transaction fees as a percentage of each purchase.

On the other hand, consider the time and money saved with a clear and comprehensive company spending plan. Don’t be tempted to trade lower fees for more work or messier processes. Wasted time is a cost in itself, even if we don’t always measure it accurately.

It’s always worth shopping around to ensure that the cards you choose are right for you.

Number of cards

Consider the number of cards that each provider offers as standard. Obviously, you’ll want as many cards as you need. But it’s important to check how easy it will be to add more corporate spending cards later.

As the company grows, you don’t want to incur account opening charges simply to access a few more cards.

Some purchasing card issuers even offer virtual cards. These can be used to pay for one-time charges, or for specific online products such as software subscriptions.

Determine whether you require access to virtual cards before you commit to a corporate program. (Note: if you’re a modern company, you probably do.)

Custom limits

It’s likely that your employees have varying levels of responsibility and seniority within the corporation. Therefore, it makes sense to offer custom limits for each member of staff or team, according to the budget provisions. But some corporate card programs aren’t this flexible; each user has the same level of control over the budget.

Thankfully, you can find a corporate card program that allows you to set personalized spending limits for each individual user.

Pro tip: try to demo their system to figure out how easy the approval process is, just in case emergency top-ups are required.

Clear payment tracking

For finance teams, one of the most important factors for choosing a corporate card program is the visibility over spending. Tracking expenses can already be a tedious part of the job; why should your credit card software make it harder than it needs to be?

Clear payment tracking means integrating your spending policy with the software, so that spending is approved or denied without the need for human touch. Reporting capabilities are also important - your corporate card program may be able to do the heavy lifting to display accounts ready for audit.

Find a corporate card program that fits your payment tracking needs. This is one of the easiest variables to control, as most card programs will offer payment tracking features as standard.

Real-time expense visibility

Instead of reviewing business spending at the end of every month or quarter, good corporate card programs will provide real-time updates. This means that you can proactively check employee spending against your policy, and track against any forecasted budget plans.

By offering real-time visibility for expenses, you can also rectify any spending errors immediately. Avoid being stuck with outdated information by choosing a corporate card program that offers real-time spending information.

A good corporate card program is a smart investment

Avoiding exaggerated expense claims is an important part of the job when you’re running the finances. But there are countless other nuances to consider.

Choose the right business card program, and you’ll have further control over your spending and can streamline the entire expense reporting process. Set custom spending limits, enjoy clear payment tracking and steer your business in the right spending direction by finding the best-suited corporate card program for your business.

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