Giving employees corporate or business credit cards is a way many organizations are minimizing travel expenses and also better managing them. It’s beneficial for the company for other reasons as well, because employers can cut down on unnecessary expenses and it can speed-up reimbursements and overall management of employee expenses.
With that being said, it’s essential that companies make sure they have policies in place and management strategies that prevent misuse, whether intentional or unintentional.
When you issue company credit cards, it can also cut down on overall mistakes that can result from expense reports.
The following are some important things to know about issuing employee credit cards and managing the card program.
Choose the Right Card
First and foremost, make sure you choose the right card for your company. Many options will include corporate card program benefits, such as annual cash back rebates. For businesses that spend a lot each year, these rebates can quickly add up. There may also be cards offering options such as travel rewards, like the accumulation of airline tickets.
When you’re choosing a business card, consider these rewards as well as factors such as interest rates and payment terms. Many companies opt for charge cards that must be paid off each month but tend to offer some of the best rewards programs.
Use Expense Management Software
If you want to significantly reduce the administrative burden for your AP department, integrate your corporate cards with efficient expense management software.
This will allow a company to have all of their spending information stored and tracked centrally so data is easily accessible and financial reports can be pulled to back up smart decision-making.
Expense management software often includes the ability to import credit card statements right into reports as well.
Clearly Outline Cardholder Responsibilities
You never want to issue employee company cards without also providing set rules and policies for card usage.
Employees need to be aware that they are responsible for card privacy and security, and there should be complete guidelines for how the card can be used when it can be used and what spending limits are.
Most corporate cards will allow businesses to set spending limits, which can vary based on the employee and the department.
If employees are expected to submit evidence for their charges, there should also be detailed guidelines for how and when to do that and what might be needed for verification.
Conduct Regular Audits of Corporate Card Usage
Finally, for the most efficient management of corporate card programs, it’s important that business leaders are actively involved. If a corporate card program goes unchecked for too long, it heightens the risk of abuse.
There should be regular audits and reviews of corporate cards including how they’re being used and ensuring they’re being used correctly. Departmental and employee spending limits should be regularly reviewed to make sure they’re still appropriate, and the overall card features should also be looked at to make sure there aren’t better options available and that things like the rewards program are being maximized in the best way.