Corporate credit card policy - Best practices and guidelines

Company credit cards seem to be a good solution when you have a small number of employees or when CFOs or managers are managing business expenses. But, the disadvantage with company credit cards is that they are normally reserved for a select group of people, including CEO, a few executives & sometimes office manager. 

When employees need the card, they must track it down and borrow it every time they need to make a payment. This creates a hassle for employees who need to spend, reducing their productivity.

However, a corporate credit card program for small businesses or large enterprises eliminates this issue, as each employee can have their own card. This removes the burden of borrowing the card and fosters a sense of belonging. It’s also more secure, as you can track who made the payment, when, and why.

With company credit cards employees have to wait long hours or maybe a day or two to get the approval with no record of approval provided. A corporate card has the unusual advantage of allowing employees to make transactions up to a certain amount per month without requiring approval.

Good corporate cards suppliers make it easy to keep track of approvals within their system. When an employee runs out of funds, the finance teams has the option of increasing the spending limit or approving employee requests for funds.

The manager is notified and has the option to approve or decline the request. The employee then makes the payment and presents the receipt as evidence of purchase. As a result, fostering a healthy spend culture with smooth approval workflows.

As company credit cards are not made specifically for businesses they don’t give the finance team the option to know in real-time where company money is going. They can only keep a track of who is spending how much and analyze costs after the monthly expense statement is sent to the cardholder or CFO.

Wherein, corporate expense cards feed transactions the moment you make it. A finance manager can log in at any moment to see all the company expenses, divided by team, category, and more. And not only this can also see complete spend analytics of company spending in real-time.

You don't need to spend hours reconciling payments as everything is available every time you need it. This gives you the room for effective spend control and keeps an eye on anything that isn't in line with your policies.

If one thing employees dislike or perhaps even hate is the reimbursement process. It leads to extra admin work where they have to save and submit tons of receipts and prepare a report for out-of-pocket expenses. 

But with the new level of spending that comes with corporate cards, expense claims can be eliminated. As every employee will have funds pre-loaded in their cards, they don’t have to spend their own money and file expense reports for reimbursements.

The use of corporate or company credit cards makes the accounting process a laborious task. As finance team has to review card statements, reconcile them with the receipts, update the ledger to record revenue and expenses, and look for missing documents if any. Each month, the same process has to be repeated.

Wherein smart card providers, seamlessly sync the expenditure information in the system with accounting software such as Xero, Quickbooks, Netsuite, Deskera & MYOB. With a single click, you can just export it & upload all your expenses into your selected accounting tools. It not only saves time but also automatically reconciles data & ensures data accuracy.

To make sure that employees use the cards effectively and safely, the corporate policy manual should include the following statements:

● A cardholder must not use the card for personal expenses unless mentioned.

● To prevent fraud and theft, a card should only be used by an employee whose name is authorized on the card.

● Employees should keep the PIN and card safely for security purposes.

Setting approval requests inside approval policies allows you to double-check the details of the fund’s requests made by your employees. It makes the process streamlined and accessible.

You might set approval requests for all expenditures or simply when an employee wishes to spend more than a certain amount. This approval process is essential in evaluating when corporate credit cards should be issued to employees, ensuring they are allocated to those with legitimate spending needs.

At Volopay we have a multi-level approval policy. Approval policies on Volopay allow admins to delegate approvers based on the specific payment range of transactions. 

As every employee has their cards, it’s essential that they also have their set budget limit to pay for expenses. Spending limits can be set by managers, finance heads, or even the CEO. 

These spending limits must be based on different categories of expenses. For example, set different monthly budgets for marketing, office supplies, subscriptions etc. This spending limit should be decided based on your need and budget for specific categories. 

Volopay smart cards have built-in spending rules and policies wherein you can change the spending limit or add more funds to employers’ cards directly from the cards view in the expense platform.

You can not only set employee spending limits but can also set purchase restrictions by department and merchant type such as only the marketing team can pay for subscriptions. Make sure that you include even the smallest of purchases that are permissible for employees to make in your document. Because these small expenses take a big toll on your budget.

Sometimes out-of-policy expenses can occur just because employees are not aware of the purchase restrictions, as not mentioned in the policy document. Volopay helps you set purchasing restrictions. With Volopay smart cards, purchases not covered by the policy are blocked.

If you're looking to explore more about corporate credit cards and other card options, such as P-cards, check out our detailed blog on P Card vs corporate card: Which is best for your business?