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Corporate cards: Everything you need to know for efficient management

An ideal expense management is essential for the development of any company. This is not only useful for the purposes of fiscal activities but also allows for more rigorous and clear accounting.

For this very reason, the use of corporate cards is increasingly common in organizations around the world, regardless of their size, since these financial tools are used to optimize employee expenses, in a simpler and more comfortable way.

In the following lines, we will tell you everything about corporate cards, what types there are, how they can improve expense management, what benefits they offer, and their advantages, among things that are really important.

What is a corporate card?

Corporate cards are a financial product that is increasingly used by companies to manage and control the expenses of their employees in a simple and comfortable way.

With these financial devices, companies avoid giving cash advances to executives for travel and entertainment expenses. In this way, there is better control of the company’s expenses, which is essential to protect the finances of the organization.

Likewise, this type of card provides the customer with great advantages, among which are hotel and car rental offers, as well as preferential treatment in certain airlines and an important group of additional services.

It is worth mentioning that these cards are completely free and have great flexibility in payment methods.

What are the types of corporate cards?

Banking entities provide their customers with different types of corporate cards, which can be classified according to their payment method.

Here are some details:

  • Debit: This implies a payment method very similar to that of any type of debit card. In addition, the company allows its employees to make direct use of the organization’s resources.
  • Credit: This allows the company to advance to the employee the resources required for the company’s representation expenses. Subsequently, the company must cancel the said loan.
  • Service: with which it is possible that the company has a temporary line of financing. Thus, when that period expires, the organization must pay the total resources that have been spent.
  • Prepaid card: which contemplates that the company incorporates a number of resources in a device and assigns it to its employees, in order for them to cover their expenses. Once the worker has used the money, they will not be able to get any more credit from that card.

What are the benefits of corporate cards?

The use of corporate cards offers customers endless benefits, which we will mention below:

1. Employee autonomy and better cost control

The administrative departments of the companies no longer have to waste time canceling entertainment expenses, managing office purchases, or processing refunds for purchases made with personal cards. 

Corporate cards allow company managers to empower their employees with the use of one payment instrument, without the requirement to open an account with multiple holders. Furthermore, if a virtual card is used, it is no longer necessary to issue multiple physical cards.

This instrument, whether physical or virtual, allows users to cover their representation expenses autonomously, as well as pay office requirements and hire services. However, the finance team can gain agility, by virtue of the linked services that are offered by the new fintech companies.

And it is that company cards from now on have support from online systems, with the use of some management platforms, with which it is possible not only to issue as many cards as necessary but also to be able to view all disbursements in real-time.

In the same way, corporate cards offer the possibility of establishing the use that should be given to each device, through the customization of limits, and spending policies and conditions, according to the profile of each holder and the policies of each company.

In this way, purchases that are essential are financed through a very convenient way of payment, while limiting the danger of transactions that have not been authorized.

2. Separation of personal and business expenses

Thanks to the use of corporate cards, it is very easy to separate personal expenses from the commercial or operational expenses of each company.

And it is that each management platform offers the possibility of applying a policy of expenses and very specific limits, for which they indicate to the employees what types of payments must be covered by business cards.

The detailed account statements allow for the detection and management of any personal expenses that were to occur. The idea is to be able to eliminate them from corporate accounts, which will allow clarity in all disbursements.

3. Simplifying refunds

Corporate cards allow employees to no longer have to resort to their credit cards, or their own resources to cover all professional expenses.

Those responsible for the administration area also do not have to spend time tracking, reconciling receipts, and organizing, in order to reorganize reimbursements to workers.

Furthermore, one of the benefits offered by corporate cards is that all expense reports, or at least the vast majority, can be centralized in a single account, with the use of as many business cards as necessary. 

Each of them may even have a disbursement limit, as well as very specific conditions, as required.

4. Centralized management and automated reconciliation

Corporate cards allow you to have a global vision of operating costs, but this task can be very difficult when expenses are distributed among several bank accounts and credit cards.

Below we point out some important aspects of this point:

  • Corporate cards allow you to centralize all expenses in a single account.
  • The financial manager will have the opportunity to be aware of each of the payments and consumptions in real time, both personal and company.
  • The management is much more fluid and efficient since the disbursements of all the workers appear in a single monthly account statement.
  • Tracking is much simpler when reconciliation is automated.
  • Through mobile applications that are associated, the owners of each card have the opportunity to photograph and send the consumption receipt at the same time.

5. Expenses in detail

We already said it, but it never hurts to repeat it. Making a separation of personal expenses makes it possible to have better control of disbursements and what is invested in each item, in order to better organize accounting.

As is known, most business cards incorporate expense reports, which can be downloaded directly into accounting software.

Added to this is the very certain fact that they allow for better tax control, that is, natural persons are not required to pay taxes for occasional expenses resulting from work activities.

Companies have the possibility of obtaining benefits as a result of disbursements that represent tax discounts.

6. Better financial conditions

Corporate cards, unlike personal ones, always have better credit conditions, including lower interest rates and longer payment terms.

However, corporate cards have a much higher quota than personal cards assigned by financial institutions to employees.

7. Build and improve your credit history

A well-managed corporate card is a very good reference against financing institutions when it comes to accessing other points and services. And is that organizations can know the monetary flow that is flowing through a person’s account, with which they have the possibility of measuring the ability to pay.

Now, a very important factor is that it is necessary to maintain a good credit history. So, payments must be on time.

In addition, the instrument makes it possible to maintain constant payment through automatic payment tools and monthly expense reports, thanks to which it is possible to maintain better control and order, in relation to the day-to-day finances of the company.

8. Much faster procedures

Processing corporate cards is usually a faster process, unlike obtaining a personal one. In principle, the bank or financial entity that issues it is aware that it is working with an institution that is registered with the commercial authorities of the country that issues it.

Also, it is very certain that there will be much more stable accounts and financial statements to support the request.

In this way, if an employee has the possibility of receiving a business card, in principle they will have the guarantee of the company, which is clear about their income, and therefore, they have references that are sufficient to know if they deserve the benefit.

9. You will get personalized benefits

Corporate cards allow you to obtain personalized benefits and have no fewer advantages than personal ones when it comes to benefit plans, discounts with miles when traveling, discounts on car rentals, or preferential rates in lodging centers and flights.

Even many corporate cards give the opportunity for rewards that generate a significant impact. Sometimes the rewards have to do with cash and special discounts or credits on future purchases.

10. Worldwide coverage

Corporate cards offer the possibility of paying what is needed at the time it is required, regardless of the country in which the user is located.

Similarly, business cards offer the possibility of making payments and transactions in a few minutes, while taking advantage of the benefits that the card provides.

Disclaimer: The information in this article is provided for general education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. It is not intended to be and does not constitute financial, legal, tax or any other advice specific to you the user or anyone else. TurtleVerse does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.



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