Who should get a corporate credit card?

May 04, 2020

Now that you know what a corporate credit card is, it’s time to decide which people in your organization need one. You can’t realistically issue every single person a corporate credit card—that’s highly irresponsible and can quickly open the door to potential fraud and misuse of funds.

In order to even open a corporate credit account, you’ll need to show that you’ll be able to assign cards to at least 15 people. Any less, and the hassle and higher fees (compared to a small business card account) may not be worth it.

So—how will you decide who receives the responsibility of a corporate credit card? You’ll need to accurately assess your employees’ needs, spending habits, and trustworthiness in order to make the right decisions.

Are they in charge of making major payments?

Some business expenses are charged per employee—for example, a SaaS (software-as-a-service) communication platform may charge $5 per person per month. This may not seem like such a big deal when your company only has 6 or 7 employees, but what if you have to pay for 500? That’s $2500 a month—a major amount for anyone to pay out-of-pocket.

Rather than placing the burden on a single employee to pay and wait for reimbursement each month, your company can issue them a corporate credit card. This way, the bill is still paid (no late fees!) and they won’t have to risk running out of money for their own living expenses.

It can be a good idea to issue a corporate credit card to managers in charge of large teams or those who are must regularly make large transactions.

Do they travel frequently?

One of the main reasons why an employee may be issued a corporate credit card is because they travel frequently. A single business trip can cost an employee hundreds of dollars in flights, lodging, food & drink, and transportation on the ground, and managers or C-level execs may take multiple trips per month.

This is especially true in a region like Southeast Asia, where many startups have operations in at least one country. For example: the CFO or CTO may take regular trips to and from Singapore and India, then spend a few days in Indonesia, Malaysia, and Vietnam.

Along the way, they will eat at restaurants, possibly leave tips, and take taxis and buses and ride-hailing services to get to their meetings. Filing monthly expense reports is a major chore for already-busy executives; the corporate credit card is designed to make their job much simpler.

Many corporate credit cards offer perks such as exclusive airport lounge access, emergency travel services, and assistance with medical expenses and emergency services. All of these can features can come in especially handy for a jet setter manager.

Do they make many purchases each month?

Sometimes a corporate credit card can be helpful for employees who make many purchases per month, or for those who must regularly manage transactions between many vendors. A person tasked with listing hundreds of small expenses is bound to miss a few sooner or later—this is where automated corporate credit cards come in handy.

Rather than having to list every single transaction in a lengthy expense report, employees can simply upload their receipt to reconcile each purchase.

Even though an employee may not travel internationally, they may still incur plenty of expenses when meeting and entertaining clients, especially if they are senior employees. Employees who spend a major portion of their day outside of the office may also benefit from the use of a corporate credit card.

Another case where a corporate credit card comes in handy is when an employee must travel a great distance each month. Fuel can cost thousands of dollars a month depending on how far a person commutes or drives each day.

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Are they responsible?

With great power comes great responsibility. When starting a corporate credit card program, many companies are concerned about fraud and misspending. Say Director A goes on a business trip to New Zealand and decides that his wife and three children need to come along, and he pays for everything with his corporate card… This type of situation is a nightmare to deal with.

Poor expense management can lead to thousands of lost dollars in lawsuits and fees, so you must be very careful about who receives a corporate credit card. They should only be assigned to people who have proven themselves responsible when using the company’s money, or to those who are truly aware of the consequences of misuse.

You could implement a policy where only employees above a certain position or who have been at the company for a specific period of time are eligible for corporate credit cards. This prevents other workers from accusing you of discrimination or favouritism.

Encourage employees to use their corporate credit card

Corporate credit cards can be exceptionally helpful in providing much-needed transparency into company spending. Staff expenses often make up a company’s largest portion of business expenditures, and corporate credit cards are a major tool in the battle of reducing these costs.

Some employees may worry that they will not be able to enjoy the benefits and cashback rewards that they would receive if they use their own personal card. It takes time and money to apply for a corporate credit account, so naturally, you want to be sure that your employees are using the cards. One way to incentivize corporate credit card use is to allow employees to keep their points.

To prevent misuse, take full advantage of customizable limits on your corporate cards. You can set them per department or per person, making it easier to identify overspending and suspicious activity.

Your expense policy should contain clear rules, regulations, and consequences for credit card use and misspending, and employees should be made aware of all your credit card policies before they receive a card of their own. Make sure to explain the difference between personal and work expenses, too.

Always review credit card usage

There are plenty of horror stories about corporate card misuse, but many of these can be avoided with careful auditing and clear boundaries. Take your policy a step further by asking employees to sign a written agreement stating that they understand the rules that come with their card.

Lastly, make sure to develop your review, reconciliation, and audit processes before beginning any corporate card program to ensure that the expenses will be properly verified. Used correctly, a corporate credit card program can help you save money and empower employees.

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