Investing in corporate credit cards for your employees brings multiple benefits to both your organization and its staff. It can streamline accounting, simplify expense reporting, and offer advantages that range from improved cash flow to enhancements in strategic spending.
In this guide, we’ll delve deeper into the reasons why issuing corporate credit cards to employees is a strategic, financially sound move that can positively impact your business.
What Are the Cons of Corporate Credit Cards?
While we believe that issuing a corporate credit card offers more positives than negatives, it’s important to be objective. Some negatives include them being too expensive (initially at sign-up and over time due to fees) and that the application process can be pretty long and tough.
You also leave yourself open for employee credit card misuse, which can cost you a lot of money. Fortunately, you can easily prevent this negative effect if you keep track of your employee’s spending habits. Tools like the Moss app are perfect for this purpose.
10 Reasons to Issue Corporate Credit Cards to Employees
Debating whether to issue corporate credit cards is a decision that holds plenty of value for your business. Here are ten reasons to consider utilizing this financial tool in your organization.
1. Simplified Expense Management
Corporate credit cards simplify expense management considerably. Employees no longer need to spend their own money and wait for reimbursement, which is often a lengthy process. Instead, business-related purchases are charged directly to the company account.
2. Improved Cash Flow
Corporate credit cards work on a monthly billing cycle, so instead of having expenses deducted immediately and sporadically from the business account, companies can plan for a single, regular payment. This allows for more predictable and manageable budgeting.
3. Strategic Business Spending
Many cards offer rewards or cash back on purchases, providing an opportunity for companies to earn as they spend. By aligning card use with the reward structure, companies can optimize their expenditure and reap more value from routine business transactions.
4. Enhanced Employee Trust
Issuing corporate credit cards shows that the company has confidence in the employee’s judgment to make business-related purchases. This empowerment not only boosts morale but also encourages responsible spending, benefiting both the individual and the organization.
5. Streamlined Accounting Processes
These credit cards streamline accounting processes by automatically recording all transactions. This eliminates the need for manual data entry or reconciliation of receipts. This can simplify tasks such as preparing financial reports, conducting audits, and calculating taxes.
6. More Control over Company Spending
With these cards, employers can set individual spending limits and restrict the types of purchases that can be made. This helps ensure that corporate funds are used appropriately and responsibly, thereby diminishing the risk of misuse of company resources or fraud.
7. Fraud Protection
Most of these cards come with built-in fraud protection measures. This includes real-time alerts for unusual activity and zero liability policies for unauthorized transactions. This means that even if the card gets lost or stolen, your company isn’t responsible for fraudulent charges.
8. Simplified Travel Reservation
Having credit issued by the company simplifies travel reservations for employees who no longer need to use personal cards or seek reimbursement for work-related trips. Many of these cards also offer travel perks like insurance coverage and airline lounge access.
9. Boosts Employee Morale
These cards can demonstrate a level of trust and responsibility given to the employee by the employer. Moreover, employees appreciate not having to balance work-related expenses in their personal accounts, which can relieve financial stress and lead to increased job satisfaction.
10. Easier Budgeting and Forecasting
With consolidated expense data, it’s simpler to track where money is going regularly. This visibility not only promotes financial discipline in spending but also provides accurate, real-time information for more precise budget forecasting and strategic planning.
It’s clear that corporate credit cards offer a host of benefits for businesses. They can simplify expense management, improve organizational cash flow, and streamline accounting processes.
Not only that, they can foster trust and boost staff morale by empowering employees to make business purchases independently. Are you ready to reap these benefits for your company?
Consider implementing corporate credit cards into your business strategies today.