The usage and adoption of corporate credit cards are on the rise. If your company isn’t already using them, chances are high that you’ll start using them soon.
Employees on business travel prefer spends using corporate cards. This is primarily because it is easier and convenient. The advantage of cards is that employees don’t feel an added financial burden while traveling. Though corporate cards ease the employee's spending pains, they introduce challenges for accountants overseeing these card programs.
In this article, we discuss some pressing challenges finance executives face while managing corporate credit cards. We also lay emphasis on how an expense management software can help address these pain points.
Companies often opt for card programs stretched across multiple providers. This can be due to various reasons - credit limits, preferences, discounts, offers and more. The adoption of multiple card programs introduces a unique set of challenges to the firm and can sometimes outweigh the collective benefits.
The major challenges of managing multiple card programs are:
A few expense management software solutions have the capability of setting up direct bank feed syncs for major credit card providers. With direct feeds, accountants can simply log in and start reconciling credit card statements immediately. Additionally, cloud-based management of expenses ensures accountants have complete visibility into corporate card expenses, irrespective of the location.
Corporate credit card reconciliation happens to be the most critical challenge in corporate card expense management. Accountants often end up spending hours trying to match reimbursement claims with corporate card transactions. Add to this the burden of checking for policy violations, and the process soon transforms into a disaster.
A manual reconciliation process is often haunted by the issues mentioned above. Even ERP and accounting solutions with in-built expense management fail at corporate card expense management. A cloud-based expense management software, on the other hand, automates reconciliations.
With machine learning algorithms, a few solutions can present possible matches for every credit card transaction in minutes. This level of accuracy is near to impossible for a human to achieve since there can be hundreds of transactions in a single statement . The problem assumes enormous proportions when multiple card statements, flow in.
Additionally, there is a hidden benefit with cloud-based expense management software. Employees can reconcile their own credit card expenses without the intervention of others. Since employees are generally aware of the context of spending on a card statement, the process is quicker, as well. Also, with AI presenting near match expenses or exact match expenses for every line item in a card statement, employees can seamlessly reconcile card statements.
With manual reconciliations, accountants need to do redundant work. Firstly, they are required to reconcile transactions with reported expenses. Once done, they have to review all matched expenses for possible policy violations. Additionally, corporate credit card policies might differ based on departments, grade or levels. This further delays the reimbursement cycles and also introduces errors in the process. This often leads to a significant loss of time, money and resources.
In the case of cloud-based expense management, all reported expenses are checked for possible violations in real-time. When employees match their expenses with card transactions, these expenses are pre-checked for policy violations. Hence, accountants can quickly filter all expenses made on cards that violate policies. These expenses can be reviewed while others can be approved immediately. This saves time for everyone and ensures no money is lost since all checks are automated with no human intervention.
Expense management software can bring down the time spent in corporate card management by up to a fourth of the original time taken. With AI-powered policy checks, direct bank feeds, and credit card reconciliations, expense management software simplifies corporate card management.
Are you using corporate cards for employee expenses? Get a 15-minute demo of our corporate card reconciliations today.