Ever heard the saying “put it on my company card”? A phrase that may sound like the epitome of a luxury job is a financial tool used to manage company expenses.
Corporate cards are issued to company employees to pay for authorized business expenses. Keep reading to learn more about employee expense management and the many benefits of corporate cards.
What Is a Corporate Card?
A corporate card is a credit or debit card that is issued by a corporation. This means that all charges put on it go to the business entity and that the cardholder is not responsible for the charges made on the card. Corporate cards are often used as tools to manage company-covered employee expenses.
Benefits of Corporate Cards
Corporate cards help you improve your employee management system and streamline company finance approvals. Here are some of the major benefits of utilizing corporate cards:
Limit Employee Spending
Although most employees follow the guidelines put in place for company expenses, company cards let you place safeguards against irresponsible spenders. These corporate cards let you customize restrictions for each cardholder.
With this additional oversight, you can set daily limits and restrict certain product categories. These restrictions will help you secure your corporate expenses while still giving employees the freedoms of a company card.
Centralize Financial Management
Corporate credit cards allow companies to track operational costs outside of payroll and rental space. When employees just submit their expenses manually, company costs are spread among a variety of payment tools and accounts.
Corporate credit card programs allow you to centralize all expenditures under a single dashboard. This oversight also allows you to notice trends and identify opportunities to save. Businesses can thrive by finding best practices for cash management.
Prevent Expense Fraud
Corporate cards typically have higher security measures, making them less likely to be a part of fraudulent activity. Corporate card service typically flags and prevents questionable purchases with a greater level of scrutiny than personal cards. From an employee perspective, having a corporate entity manage any potential cases of fraud can help alleviate a lot of stress.
Tracking Budgets in Real-Time
From an accounting perspective, it can be aggravating to have expense reports flood in right at the deadline. This makes it difficult to keep tabs on throughout each month and necessary to follow up for additional documentation. When companies issue company cards many of these problems are mitigated.
If employees use company cards to cover expenses, they can have a clear overview of the spending throughout the payment period. Having visibility to track finances in-real time will help monitor real-time cash flow.
Streamline Employee Expense Management
Corporate cards allow companies to become more efficient and save time when it comes to employee expense management. Companies have slowly transitioned from employee reimbursement forms to expense reports. Because charges go directly to the company and don’t leave employees waiting to be reimbursed. Corporate cards are a better option for both employer and employee.
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