The mantra of business success lies in the fact that you must spend money to make money. Moreover, along with the growth of the business, the money management of the funds spent on employees, different client meetings, business travel expenses and other operating costs is a major task. It becomes complex to find out a simple way for expense management.
The most crucial way for a business to monitor their spending and keep a check on purchases made, is by issuing a corporate card. One might encounter grey areas that seem difficult to be managed along with signing up for a corporate card. This is why it’s imperative that any organization that uses a corporate card should follow a clear policy.
How must a corporate card be obtained, and what are the best practices to be followed by the companies and employees?
Ultimately, your company’s corporate credit card policies can be customized to fit your interests and needs. Here are some best practices & policies to be set from the organization’s side and followed from the employee’s side.
Obtain a corporate card.
- Firstly, you must be approved to issue a corporate credit card. A business needs to submit its tax ID number through which the credit card issuer will perform a background check of the company’s finances and credit score.
- Once an organization passes these checks, the company is clarified to issue a corporate credit card.
- Another unique feature of corporate credit cards consists of analytics tools that allows accountants, executives and managers working within a company to track how and when the employees spend the company’s money. Acknowledging the tracking features offered with a corporate card is crucial step.
Practices for companies:
- Use analytics tools – as mentioned above, a corporate credit card accompanies the analytics tools, providing an advantage to your business in tracking where, when and why an employee spends the company’s money. Best business practices in many countries are a prime example of how credit cards like corporate card singapore, are issued by firms to be spent by employees. Sorting helps companies track and monitor the transactions made through a card, even when many employees use a corporate account.
- Cardholder responsibilities – just like a company provides understandable and clear guidelines while establishing an expense reimbursement policy, it’s important that any organization must lay out strict rules for every employee using a corporate card. Any employee cannot use a corporate card for personal expenses. In addition to it, the only person who is eligible to use the corporate card is the one whose name is mentioned on the card.
- Limited spending – spending limits must be set for each employee according to their needs and employment status. For instance, an employee who is a high-level executive and travels frequently should have a larger spending limit as compared to a lower-ranking employee, going for an occasional coffee with the client.
- Easy expense reporting – to acknowledge a clear picture of how the company’s money is being spent, a corporate credit card policy must be accompanied by laws for employees to provide maximum information based on the expenses made by them through their corporate card, such as date of purchase, vendor and the purpose of spending.
Practices for employees:
It might be difficult for an employee to know how to use the card, where it is necessary to use the corporate card and keep the right track of all the information regarding the purchases made through the company’s corporate card, which the business can request at any time.
- Keeping track of receipts – Whenever you spend using a corporate credit card, prepare yourself to present all the details regarding your purchase. Remember the why, when, and where of the spending made through your corporate credit card. Keep track of your receipt as it will assist you in accomplishing this efficiently, and you can justify your expenses with concrete details.
- Learn the compliance regulations – as an employee, several organizations using corporate credit cards follow robust compliance policies with numerous rules and regulations to be followed. Acknowledging these regulations before utilizing the card will make it easy to perform the right spending according to the company’s guidelines. Also, ensure what expenses need special approval from your business organization.
- Practising extreme security measures – a corporate card consists of access to a good amount of money. Ensure to be stable and smart enough to report a loss or theft as soon as possible, if any mishap occurs to your card. Look after your corporate card, just as you would pay attention to your personal credit card.
Along with a corporate credit card comes the responsibilities in the hands of a company to efficiently monitor and track the money being spent on business operations. Moreover, a corporate card allows an employee to spend company’s money on important business expenses instead of spending from their personal bank accounts. Adhering to these practices will result in a well-run corporate card account and smooth sailing in spending your company funds.