Top 5 Benefits of Corporate Credit Cards for Employees
By Randi Gollin | American Express® Freelance Contributor
5 Min Read | July 22, 2022
Summary
Perhaps your firm is expanding its sales force or maybe you’ve decided to give key members of your team more responsibility. Whatever the circumstances, there comes a point when it makes business sense to empower certain individuals with credit cards for company use.
An employee credit card operates in the same way as the primary corporate credit card on a company account. Employee cards are linked to the primary corporate card account, with your organization’s name and the assigned employee’s name on it. Those employees are authorized users and have permission to use their cards for the approved business expenses typically outlined in the corporate card policy.
Here’s an overview of the myriad ways that corporate credit cards can benefit your employees, and therefore, your business.
1. Employee Company Cards Separate Business and Personal Expenses
A company card draws a clear line between personal and company expenses, giving authorized users the green light to pay for frequent purchases like office supplies, not to mention all the costs that arise during a business trip, from a rental car and airfare to hotel accommodations and client meals. This means no need to use a personal card and wait for reimbursement.
When team members are authorized to use employee company cards for approved purchases, it gives them greater autonomy, making it easier for them to do their jobs. What’s more, organizations usually shoulder the employee company card debt, so the card activity has no impact on an employee’s personal credit – all of which makes for a more positive employee experience.
2. Credit Cards for Company Use Help Control Company Costs
When corporate credit cards for employees are issued, the account holder can establish spending caps for the corporate account as a whole, as well as for individual authorized users. It’s not uncommon for companies to give higher spending thresholds to more senior team members.
By setting per-transaction and overall spending limits, management can better monitor costs and compliance, track budgets, and streamline travel and entertainment (T&E) expenses that staffers accrue out in the field or on the road. Ideally, the corporate policy delineates monthly and frequency limits, as well as restrictions on specific expenses and vendors, with that information clearly communicated to pertinent personnel.
Some credit card issuers can also link “virtual” cards with single-use credit card numbers to a company’s corporate card account. Digital cards can bolster spending control because they’re restricted by expense, transaction type, and expiration date. They’re activated for specific transactions, and used online or in mobile wallets by tapping a mobile device at a physical point-of-sale terminal. These virtual corporate cards can also benefit companies that need to provide contractors with access to funds.
3. Corporate Cards Provide Better Expense Management
When credit cards for company use are integrated with travel and expense management systems, card feeds are fetched for both employees and accounting and finance management. These systems feature automatic reconciliation, which matches dates and receipts, paving the way for a smooth expense report approval process – and saving everyone the administrative burden of manual reporting. What’s more, automated reconciliation allows an accounting team to monitor transactions in real time and spot any errors, even before they wind up on an expense report.
Centralized expense tracking also makes it simpler for companies to pinpoint who’s spending how much money, and on which goods and services. Costs can be controlled further by limiting card payments to specific, agreed-upon suppliers or setting up automatic recurring payments to suppliers. This can have its own cost-saving advantages: When suppliers don’t have to wait 30 or 60 days after shipment for payment, they may decide to offer an early-payment discount.
4. Corporate Cards Enhance Security and Fraud Protection
Company cards for employees can help reduce the incidence of fraud, both internally and externally. Since the cards give managers a window into the transaction feed for all employees, finance teams can track down fake or embellished receipts, spot suspicious activity such as personal expenses being passed off as business expenses, or detect unintentional fraudulent card use. Some card issuers also offer automatic fraud alerts to notify account managers of potentially suspicious activity.
5. Corporate Credit Cards Can Enhance Business Travel
Some employee corporate cards can help make business travel more enjoyable by granting authorized users premium travel benefits, like hotel upgrades or access to upscale airport lounges. Many corporate credit card programs also let companies earn points and miles for airlines and hotels, plus other loyalty rewards. Depending on corporate policy, some organizations give employees a lot of leeway, enabling them to use those perks to reduce future business expenses, or even for personal use: another win-win for employees and employers.
For more on developing a corporate travel management framework, read “What Is Corporate Travel Management and Why Do You Need It.”
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