A corporate card is a form of credit card that a bank issues to a business. To make the reimbursement process easier, the business owner may also give the card to their staff members. This eliminates the need for them to utilize personal funds to pay for business-related expenses and then go through the reimbursement process. Corporate credit cards are intended to meet the needs of established businesses, often those with annual revenues of at least $4 million.
In many established firms, employees have access to corporate credit cards, which enable them to charge allowed expenses, such as hotel stays and plane tickets, without using their own cards or cash. For example, an employee can now use a corporate credit card to make payments whenever they need to travel for business or attend a client dinner on the company’s dime. Similarly, you can use a business card to pay for any costs you incur for work-related reasons. These cards, often commercial credit cards, can simplify cost management for employees and companies.
How does a corporate credit card work?
A corporate credit card functions similarly to any other credit card in that it is spent first, and then paid later. You can use corporate cards to make both online and in-store payments. The owner’s or employee’s personal finances aren’t mixed up in the process because these payments are recorded in the company’s statements.
The firm name and the cardholder’s name are generally mentioned on the card.
What are the benefits of using corporate cards?
When firms and startups begin to grow, owners and entrepreneurs should not be concerned about losing control over corporate expenses or insight into staff spending. Modern corporate cards like business card Singapore can aid in better expense management, discounts, rebates, and expenditure visibility.
It is much simpler to create expenditure analysis reports by accurately classifying all transactions and simply entering card statements into an expense report. Many modern corporate cards can now promptly highlight out-of-policy charges, simplify account reconciliation, give workers prompt clarification and remove dubious spending. In addition, transaction data extracted from the system can be quickly evaluated and used to provide helpful insight for financial decision-making.
Employees who make their purchases and submit their claims with fictitious receipts run the risk of inflating their actual expenditures. First, all potential loopholes are eliminated because the finance team can access all transactional information. Secondly, refunds cannot be processed onto a different card as they appear in the transaction feed that the finance managers can access. Therefore, the employee cannot conceal their returns or request compensation on their behalf.
Another significant benefit that we should not overlook is employee satisfaction. The monthly expenses for employees who travel regularly or book conferences can take up most of the monthly budget. By using corporate cards, staff members are no longer required to utilize their accounts and submit cost reports at the end of each month. Sometimes reimbursement takes a long time, which ultimately causes employee dissatisfaction. However, corporate cards have no issues since the business handles the payment.