Indispensable. That is what corporate cards are becoming in the business world. In fact, according to a report by the Wall Street Journal, an increasing number of companies are adopting corporate credit card programs for their business. And the reasons are multifold. To mention a few here;
- Finance teams can manage cash flow better.
- It Improves the business credit of the company, which, in turn, will help your business grow.
- Employers can enjoy the incentives (rewards, cash backs, miles, etc.) that come with credit card usage.
- Employees wouldn’t have to go through the hassle of expense reporting and waiting for their reimbursement.
That said, every coin has two sides. If you do not keep a watchful eye on your corporate card spending, it can leave your business finances very messy. In this article, we explore the best practices for corporate credit card management that’ll help your business get the best out of cards.
Best practices for corporate credit card expense reporting
Given that corporate cards are designed to make spending easier, it is likely that your employees may be tempted to spend a little more than what you’d like them to. This could prove to be detrimental to the health of your business. Here are some of the best practices you must keep in mind while managing corporate credit cards for your company.
1. Set a distinction between personal and corporate card expenses
Sometimes, employees incur personal expenses on their corporate cards, with the idea of paying the company later. Unless it is necessary, discourage your employees from doing so. Tell them clearly what is acceptable and what isn’t. In case they record a personal expense, ensure that your corporate credit card reconciliation software can differentiate between the two.
2. Double check the expenses with proofs
Needless to say, receipts are the best proof. Although the IRS mandates receipts for expenses more than $75, it is wise to ask for them anyway. You will get a clear idea of whether your employees are spending right. It also eliminates potential fraud where employees can get away by recording numerous expenses below $75.
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3. Issuing of corporate cards only when it is necessary
Giving your corporate card to your employees is a sign of trust. But it is not imperative that everyone has the best intentions at heart when they swipe the card. Being one of the easiest ways to indulge in fraud, companies must provide these corporate credit cards to employees only when essential. If you use one corporate card for the entire team, ensure that your travel and expense management software lets you assign those expenses to the respective users.
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4. Set limits on the spending
Create an expense policy for your organization. Let your employees know how much they can spend on air tickets, accommodation, and other types of expenses using the corporate card. Even better, employ a T&E system that notifies your employees about policy violations the moment they incur the expenses.
SUGGESTED READ: How to draft an effective corporate credit card policy?
5. Monitor employees spending habits
One of the major advantages of having a corporate card program is visibility into the spending trends of your employees. Analyze the spending pattern of your employees from the corporate card statements and bank feeds regularly. This lets you spot the erroneous expenses even before your employee reports them.
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Make your corporate credit card expense reporting easy
With an ever-growing scenario of corporate credit cards, it is rather necessary that you use an expense management software that can help you manage them better. With Fyle, corporate card reconciliation becomes effortless. You can assign cards to your employees, view corporate card statements, handle transaction reversals, and a lot more. Along with instant expense reporting, policy compliance, approval workflows, and reimbursements, Fyle becomes a perfect solution to your business travel and expense management woes.
Schedule a demo today to learn more about how you can manage corporate cards with Fyle!