Here’s what you need to know to make the most of company cards.
What is a company credit card?
Sometimes called corporate, business, or employee credit card, it is a means of payment companies may offer their managers and employees. Company credit cards allow cardholders to pay their professional expenses without having to advance the funds themselves. They make sense for domestic, international and business travel. An employee holding a corporate credit card can use it independently to pay for expenses incurred over the course of their mission, including the following categories:
- meal,
- hotel nights,
- train or plane tickets,
- car rental,
- fuel,
- ..
Company credit cards are similar to other bank cards and can be physical or virtual.
Most of them are issued by one of the leading credit card operators, such as Visa, Mastercard, or American Express.
Usage instructions for company credit cards
How to apply for a company credit card?
Similar to personal credit cards, these company credit cards are issued by banks. Naturally, their rates depend on the benefits and services that come with the card. But offers may also vary from one bank to another. Traditional banks usually offer a wide range of corporate credit cards, sometimes up to an advanced level with premium services. On the other hand, online banks and neo-banks rely on their flexibility and generally differentiate themselves by providing specific offers to well-identified markets and needs.
How does a company card work?
When a manager or director assigns a company card to an employee, it is essential to explain its principles and how it works. For starters, employees must be aware that the card should only be used to pay for business expenses tied to the firm and the employee’s activity. This can also be the opportunity to remind your employee of internal rules and procedures. Usage of the company card depends on the terms and conditions proposed by the bank and chosen by the company. Choosing the direct debit account is a determining factor, as purchases can be debited either from the company’s account or from the employee’s personal bank account. The first option makes it easier for the employer to control expenses, while the second option gives more responsibilities to the employee. In this case, a deferred debit function is imperative to ensure the employee is reimbursed for his professional expenses before they are debited from his account. Depending on the offer selected, the company can configure various parameters for each business card, including:
- capping of expenses,
- categories of expenses and authorized merchants,
- days and time slots of activation…
Apart from these, company cards share the same features as any other bank card, including validation of purchases by PIN code, contactless payment, security for purchases made online, etc.
Advantages of the company card
Company cards have many advantages that benefit both the company and the individual employees who use them. The main advantage for employees is that they no longer have to pay for expenses in advance. For companies, the credit card also facilitates the application of internal rules and procedures related to business travel and expense reports. Depending on the card’s terms of service, business cardholders and companies may benefit from favourable insurance coverage and other business travel insurance perks, deferred payment for up to 70 days, and partner benefits. Company cards are also an additional way for firms to empower their employees, simplify their daily lives and thus maintain their motivation. In addition, depending on the configuration options mentioned above, they may help the employer make the most of the tools used to control professional expenses, as corporate cards often allow for a real-time, detailed, and sometimes even analytical tracking of the costs incurred. Lastly, the risk of expense fraud is reduced, especially when company card purchases are charged directly to the company’s checking account.
Some limitations… and complementary solutions
It should be clear that company cards present many advantages at this stage. However, they do not significantly reduce the administrative, accounting, and financial workload for managing business expenses. These processes are particularly time-consuming and typically involve mobile employees and several key departments. This makes pairing company cards with an effective expense report and travel management solution, such as the one offered by Notilus, extremely interesting. The Notilus travel and expense management software automatically links any expense incurred with a company card to an expense report, either scanned or directly filled in in the solution. Also, booking for business trips can be done directly from Notilus once it has been interfaced with the company’s credit card system. Finally, pairing the company card and Notilus may open the door to automating the entire business expenses management process.
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With our OCR, all fields such as VAT, currency or amount are automatically detected. With the electronic archiving, your expense receipts are stored in a secure cloud, no more paper.
