If your company is growing in profits and revenue, you’re probably getting numerous offers from major credit card issuers to avail of their corporate cards.
Perhaps, they’ve seen your company’s eligibility for a corporate card since you have a good business credit history and have met or exceeded their required annual revenue. And so, this may be the perfect time to switch your business credit card to a corporate card.
When you have a corporate card, your business entity will be legally responsible for settling all charges via the same card. You can utilize your corporate cards when purchasing products or services for your business and have an opportunity to gain corporate rewards.
Plus, some corporate cards allow you to use and transact the card internationally via multiple currencies without additional foreign transaction fees.
But while having a corporate card has its perks, it’s also vital that business owners and employees who are granted corporate cards know how to use and manage them wisely. Otherwise, poor corporate card management may put your business at risk of embezzlement, fraud, and other financial risks.
Table of Contents
- Here Are Seven Smart Ways You Can Use Your Corporate Cards
- 1. Establish Policies For All Corporate Card Holders
- 2. Set Departmental Budgets
- 3. Provide Corporate Card To Your Employees Only When Needed
- 4. Monitor And Manage Expenses Of Employees
- 5. Take Advantage Of Your Card’s Instant Rewards
- 6. Utilize Purchase Protection Benefits
- 7. Link Your Corporate Cards To Your Accounting Software
- The Bottom Line
Here Are Seven Smart Ways You Can Use Your Corporate Cards
1. Establish Policies For All Corporate Card Holders
Once you’ve opened a corporate card, you need to establish rules and regulations about the proper use of corporate cards. You and your employees must understand the primary function of corporate cards, which is to use them for business-related transactions only.
Other essential points to include when creating corporate card policies are the limitations on spending, cardholders’ responsibilities, and consequences in case of violation.
If they have any problems or concerns about their cards, encourage them to approach you or the finance department. Let your employees know the distinction between personal and corporate expenses.
This is important since some employees tend to use their cards for personal expenses with the intent to pay the company later. If they keep doing this long enough, some of your employees may abuse their corporate cards.
2. Set Departmental Budgets
Even if you’ve established corporate card policies, you still need to set specific budgets for every department. Doing this will save your finance team time and effort in figuring out which employee or department spends the most on the corporate card.
Setting departmental budgets will help you keep track of your business’ spending limit and notice whenever you or a particular department is about to go over the set budget.
3. Provide Corporate Card To Your Employees Only When Needed
Issuing corporate cards to your employees can be risky, especially if you’re unsure whether or not they’ll follow the corporate card policies or use the cards wisely. Thus, it’s best to issue corporate cards to employees only when it’s highly necessary.
For example, if you’ve assigned two of your employees to go on a one-week business trip, this may be a good time to issue them their corporate cards so they can use them for their business expenses.
In a different scenario, suppose you’ve assigned one of your employees to buy office materials from a nearby supplier. In that case, you don’t have to issue them with a corporate card since the finance team can personally hand them the exact payment immediately.
Ensuring that you’re providing corporate cards to the right people for the right reason will minimize the risk of fraud and other financial risks.
4. Monitor And Manage Expenses Of Employees
Managing funds for a large corporation can be tedious. Thankfully, corporate cards provide expense reporting tools that help track expenses, create reports, set or reallocate budgets, and monitor your employees’ spending habits.
Corporate cards will automatically record every single transaction your employees make. Thus, make the most of your corporate card’s advanced tools and use them to manage your business expenses.
5. Take Advantage Of Your Card’s Instant Rewards
Some corporate card issuers have built partnerships with some establishments where they extend discounts to cardholders. Thus, when choosing your corporate card issuer, ask them about the perks and rewards they offer.
You can use your corporate card to buy products or services from specific establishments and enjoy various rewards (e.g., cash-back, points, airline or hotel discounts).
6. Utilize Purchase Protection Benefits
One of the best things about corporate cards is that they offer purchase protection. For example, if you use your corporate card to purchase a computer or a laptop, you may enjoy an extended warranty or free replacements in case of defects.
So, always remind your employees to use the corporate card whenever they need to buy office equipment to save funds on unexpected expenses.
7. Link Your Corporate Cards To Your Accounting Software
If you’re currently using accounting software, you can integrate your corporate cards into it. Some modern corporate cards may include a card expense management program that allows you to link your corporate cards to your accounting software seamlessly.
By doing this, you and your finance team can save time and energy from having to generate expense reports manually and gather important corporate card data.
The Bottom Line
Overall, having a corporate card is one of your powerful financial tools that will help streamline your company’s expenses and build a better business credit score.
However, you can only reap these benefits when you and your employees use your corporate cards wisely and with caution. So, if you don’t have a corporate card yet, apply for one from your trusted financial institution and remind employees to take note of these tips.