6 Ways Corporate Credit Cards Can Help You and Your Employees

published on: February 16, 2018 last updated on: June 21, 2024

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.

Defining Corporate Credit Cards in Detail

Defining corporate credit cards in detail

Corporate credit cards are given to employees in big companies mostly. Companies with a minimum revenue of $10 million can issue this card to their employees.  

Employees mostly use corporate credit cards during hotel stays, buying flight tickets and more. These cards are also known as Commercial credit cards in the US.  

There are more than 6 Ways Corporate Credit Cards Can Help You and Your Employees. But, I will discuss the most optimal benefits of this credit card.  

It helps employees to segregate personal finance from office related expenses.  

It also helps employers to manage perks like flier miles. In some cases, companies offer specialty lounge access to delegates through this card.  

Working Principle of Corporate Credit Cards

Working principle of corporate credit cards

The corporate credit cards can be used by 15 or more users.  

In the US, the projected amount spent from a corporate credit card is $250000 every year. There are small business credit cards for ventures like sole proprietorships. However, Investopedia informs that corporate credit cards are reserved for big corporations.  

Other than managing dynamic expenses, they can offer premium perks to employees, though this card.  

Before getting this card, you must know 6 Ways Corporate Credit Cards Can Help You and Your Employees. But one of those benefits is the growth i brand popularity. 

The importance of a brand grows, when it issues a corporate credit card.  

Does that mean all companies can get it? 

Certainly not. 

In the US, companies with selected legal structures are eligible for corporate credit cards. These are: 

  • C Corporations 
  • LLCs 
  • S Corporations  

Who Issues Corporate Credit Cards in the US?

Many of the reputed banks offer corporate credit cards in the US. The popular ones are Capital One, JP Morgan Chase, Wells Fargo and CitiBank.  

The issuing banks can analyze the financial health of the applying companies.  

If you want to get a corporate credit card for your company, focus on two things: 

  • Stable financial records 
  • High liquidity rate  
  • Better cash flow 

Most issuing banks would like to see the recently audited financial documents of your company. They are interested to know about the company’s structure and relevance of corporate CCs in the firm.  

Som banks also check credit history of the company and core financial strength of owners and directors.  

Beneficial for SMEs and Startup Companies

Beneficial for SMEs and startup companies

Your chances of getting a corporate credit card may go down due to your unauthorized expenses. But many small companies do not track their expenditures at micro level properly. 

In the long run, it impacts their credit worthiness. At the same time, banks don’t favor such unscrupulous expenses.  

So, you must control and track your expenses if you want a corporate credit card issued. 

The corporate credit card lets you track your expenses from one source. Most banks have mobile apps with interactive interface where you can track, sort, group and manage expenses.  

In the 6 Ways Corporate Credit Cards Can Help You and Your Employees, I have discussed further benefits of corporate credit cards for SMES and start-ups.

6 Ways Corporate Credit Cards Can Help You and Your Employees

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.

However, before you and your employees avail of a corporate credit card facility, a number of important points need to be covered. You need to ascertain who will be responsible for making payments, terms of use and procedures, spending limits and restrictions.

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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Ariana Smith

Ariana Smith is an enthusiastic fashion blogger and freelancer content writer. She loves to write and share knowledge of the latest fashion trends, fashion, and shopping tips and tricks. She is the chief editor at FollowTheFashion.

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