For companies with a good credit history and whose employees incur expenses in the conduct of business, corporate credit cards are an efficient way to control costs and keep a tab on employee expenses.
If your people regularly travel to meet clients and partners, and establish new connections to achieve business objectives, corporate credits cards are also a symbolic vote of confidence in them, and indirectly add prestige and strengthen your corporate brand.
But just like any other financial product, a business and its employees can maximize the benefits of corporate credit cards when used properly. If your company has been offered this financial product by your bank, count yourself lucky considering these advantages.
1. Reduce paperwork :
For employees, having a corporate credit card takes away the stress of having to file for a per diem allowance when they go on company errands. There is also no need for them to track receipts for company-related expenses personally. All they need to do is keep the receipts and submit them to finance once they are back from their official business trip.
Finance can then simply cross-reference the receipts with the credit card statement when it arrives.
2. No cash out for employees :
This benefit will come in the case of company-pay credit cards since the employer will be floating the funds themselves for payment purposes, ensuring that employees would never be bothered by the need to pay for the expenses initially out of their own pockets.
The fear of late payments and the charges that will accrue is also gone.
3. Save time :
There are banking establishments which offer electronic expense reporting services so that card purchases are automatically linked with corporate expense reports.
All card-related purchase information is pre-populated so employees need only supply details on non-card business transactions using cash or a check.
4. Safeguard company expenses :
Corporate credit cards also save the employer from extra time and trouble in terms of flagging expenses which violate the terms of corporate credit card use. An example is upgrading to a business class seat during a business trip when the employee is required to book a ticket in economy class by default.
5. Earn rewards and benefits :
Just like with regular consumer credit cards, corporate credit cards help employees earn rewards on the company tab. However, whether or not the employee gets to keep and use the rewards mainly depends on the company.
Large companies usually just let their employees utilize the rewards earned while some smaller firms incorporate rewards earned into the incentives they offer their top performing people. Some also use these rewards to offset annual corporate costs so they become part of company savings.
Some incidental benefits of corporate credit cards for frequent flyers include access to airport lounges of major airlines, priority use of express security lanes in certain airports, and travel insurance.
6. Avoid personal credit card fraud :
Having a corporate credit card means the account is linked to a large entity and not to one single person whose personal information may be endangered, such as in the case of credit card fraud. When this happens, it won’t just be one person going through the complaints and claims process; it will be the company and the bank that will be jointly responsible for blocking further incidents of fraud, and for tracking the fraudster.
When it comes to credit card loss, the company will take care of following up with the bank for card replacement after the initial paperwork has been accomplished by the employee. Again, this means a lot less stress for the employee cardholder.
As a precautionary measure, some companies even schedule film viewings and training classes about the use of corporate credit cards. Policies and procedures should be carefully and clearly spelled out so that nobody who commits a mistake can use ignorance as an excuse.
Employees should be aware that their corporate expenses affect the company’s bottom line, and that common sense should always figure in their company spending. The company has entrusted them the authority to spend on business-related expenses stress-free, so they should act responsibly, respect the business bank account, and represent their establishment with integrity.
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