Tips to Manage Business Expenses with Corporate Credit Card
A corporate credit card is issued to an employee of a company, which enables him/her to pay for expenses originating from the job. These expenditures can include flight tickets, hotel bookings, etc.
Corporate credit cards are sometimes confused with business credit cards. The latter is only provided to business owners to pay for various expenses related to the company.
Businesses offering corporate credit cards to their employees will be able to able to address several expenses without the need for manual intervention.
Some of the tips to manage such expenses are discussed below –
Draft an expense policy
The first step to implementing corporate credit cards in the business is to draft an expense policy. This policy will define the threshold of all the expenditures that employees can make with the card.
Businesses can implement a travel & expense (T&E) system to notify employees when they have breached the policy terms and conditions.
Provide cards to those who require it
Providing all the employees with a corporate credit card is not recommended. It should be issued to those who are making out-of-pocket payments for company-related expenses frequently.
Unnecessarily issuing cards to all employees can become an issue for business owners when they have to repay credit card debt. Also, it is advisable to add or remove an employee from the program as per his/her requirement for the card.
Discourage employees from making personal expenses
Many a time, employees tend to make personal expenses with the credit card with the notion that they will pay it to the company later. However, there have been cases when such expenditures have gone unnoticed, and employees have gone to the extent of embezzling funds.
Hence, it is advisable to discourage employees from making personal expenses with the credit card. Some companies integrate credit card management software that can distinguish between payments made for personal and business purposes.
Keep a check on the expenses made
It is always advisable to monitor the expenditures made by employees. There might be spends that an individual should be barred from making, which has also not been detected by the T&E system. Also, there might be situations where an employee can file an expense claim to get reimbursed for a payment that has already been made through the corporate credit card.
Hence, keeping a check on this spending is crucial. Credit card management software will also be valuable in doing so. These applications keep an overall track of the credit cards along with their cardholders and make reconciliation efficient. Business owners can ensure their employees use their credit cards wisely via such software.
Educate cardholders about security and safety
Users should be encouraged to ensure the safety of their credit cards. They must also know how to report theft, loss, or misplacement of the card in such situations immediately.
Restrict cash advance facilities
Restricting cash advance facilities will prohibit cardholders from withdrawing cash from ATMs. Implementing such measures is necessary as ATM cash withdrawals via a credit card attract high finance charges and cash advance fees.
However, there are credit cards that offer an interest-free period on cash advances withdrawn from ATMs. The Bajaj Finserv RBL Bank SuperCard is one of the credit cards that offer such facilities. Users can withdraw cash from ATMs and repay it within 50 days to avoid any accrual of interest.
The company also brings pre-approved offers that simplify the time taken to avail financing by minimizing the hassles of application and approval process. These offers are available on several financial products like credit cards, business loans, personal loans, etc. Individuals can check their pre-approved offers by providing only their name and phone number.
Business owners must follow these tips to manage expenses made with corporate credit cards. It is even more necessary to eliminate high credit card interest rates being levied on outstanding balances.