Corporate cards are a means of payment for employees’ (strictly) professional expenses. Linked to the company’s bank account, there are several types and names: prepaid card, business payment card, or pro card.
Unlike traditional expense reimbursement systems, corporate cards offer a number of advantages to help optimize business expense management. For example, employees no longer need to advance personal funds, which could have posed financial problems for them in the past. The cards also streamline the accounting reporting process.
However, companies that use these cards will need to pay attention to security and control issues.
1. Choose the best corporate card solution
Some companies use the bank cards offered by traditional banks. However, managers and CFOs are increasingly turning to more comprehensive payment solutions, which enable them to manage their employees’ corporate cards more efficiently and accurately.
Service providers specializing in professional finance or expense report management have innovative technology and advanced digital functionalities at their disposal, such as:
- unlimited virtual card issuance;
- online control of limits and authorizations;
- customized settings regarding merchants or time windows for use;
- real-time expense tracking and bank connection;
- automated reconciliation of financial transactions;
- paperless receipts;
- export of accounting data.
To help you choose the best corporate card solution, check out our comparison of the main offers on the market.
2. Determine the criteria for issuing a bank card to your employees
Not everyone needs a corporate card. In fact, it would be counterproductive to give one to every employee, as it can complicate the management of payment methods. What’s more, an employee who hardly ever uses his or her card is more likely to misplace it.
Start by drawing up a list of current expenses and costs to be incurred in the course of your business activities:
- public transport;
- meals;
- tolls;
- mileage allowances;
- accommodation;
- purchases of supplies and of new information and communication technologies (NICT) tools;
- teleworking, etc.
Then, evaluate the frequency of spending. This is one of the main criteria for deciding whether or not to issue your employees with a bank card. An employee who regularly visits suppliers, invites customers to restaurants, or travels to far-flung production sites would clearly benefit from a corporate card.
3. Customize your employees’ corporate cards
Depending on the corporate card provider you choose, you can customize a number of parameters. First, set daily, weekly, or monthly transaction limits. You can also set a maximum amount per transaction, if you feel this is necessary.
You can also control the day and time windows during which the card can be used. You are free to align card use with your office opening hours. On the other hand, if your employees attend trade fairs or conferences that straddle weekends, you can broaden the scope of authorization.
Certain corporate cards enable you to control your employees’ spending even more precisely. For example, adopting merchant filters means that employees can only pay in certain stores. This is useful if you have partnerships with specific hotel chains or wholesalers.
Finally, you can activate or deactivate ATM withdrawals, foreign currency payments, and online payments.
4. Create a user charter for your employees
Before paying with their corporate card, your employees must be informed of the terms and conditions of use and the rules to be respected. Make sure you define your expenditure policy in advance, and create a user charter to which they can refer.
Specifically, it must state that only professional expenses are to be incurred with the corporate card. It may also include points such as:
- the type of expenses authorized (meals, office supplies, travel expenses, etc.);
- payment and withdrawal limits (monthly or weekly);
- the responsibilities of card holders and of their managers;
- the steps to be taken in the event of theft or loss;
- insurance and benefits included in the banking offer (compatibility with Apple Pay and Google Pay, cashback, etc.);
- how the payment application works;
- the supporting documents to be provided;
- penalties in the event of fraudulent use, etc.
Like any other internal document or procedure, the charter will evolve. Plan to update it regularly in line with company practices.
5. Encourage your employees to personalize their payment methods
One the charter has been drawn up, prepare a demonstration of the chosen solution, i.e., the card and related application. This can be in the form of a meeting or a video for new recruits to view.
During this exchange, invite your employees to customize their card and track their spending. They can define a PIN code and receive notifications of each transaction.
You can keep control of your finances while enabling your employees to be agile and autonomous in managing their professional purchases. This trust will encourage them to be vigilant, which is essential for detecting payment hacking.
6. Track your teams’ payments in real time
Corporate cards offer many advantages, including real-time control of financial movements. The most effective solutions offer an online platform to centralize the banking flows of all employee cards, whether physical, virtual, or temporary.
This tool is indispensable for controlling your cash flow and for quickly identifying internal and external fraud. You can easily audit expenses and receipts. In case of doubt, you can block the card with a single click.
It is worth carrying out periodic verifications over the course of an accounting year, at varying levels of detail. This could involve focusing on one or more employees at random, on a specific assignment, or on a particular event such as the company’s annual seminar.
7. Integrate corporate card spending into your accounting system
Every month, your fleet of corporate bankcards will generate lines of bank transactions that need to be reconciled and recorded in your accounts. It’s a good idea to have an efficient solution that automates these time-consuming tasks and avoids data entry errors or manual reconciliation.
Opt for a platform that is connected to your bank, compatible with your accounting software, and that collects receipts and exports accounting data.
At N2F, our expense report software features a corporate card module. This means that you can benefit from a premium payment solution, optimized management of business expenses, and automatic bank reconciliation, all directly viewable from the application.
