Has your company offered you a corporate credit card? Or, are you a business owner contemplating providing your employees with corporate credit cards? If so, learn more before making your decision. Corporate credit cards have their perks, and can impact how employees handle their expense reports.
What Exactly Is A Corporate Credit Card?
A corporate credit card is a card provided by a company to an employee for the payment of approved, business-related expenses. Often, these expenses are travel-related. These cards are typically issued in the company’s name, and display the name of the individual employee cardholder.
Businesses generally establish corporate credit card accounts by using a banking relationship. When negotiating this deal, the company’s credit is considered.
There are two main types of corporate cards. Individual payment cards render the employee responsible for submitting their own expense reports, based on company policy. The employer pays the issuer directly for any charges. With company-payment cards, the employer picks up the tab for all company-sanctioned charges. The employee would still be liable to pay the issuer directly for any unapproved or personal charges.
Perks Offered By Using A Corporate Credit Card
Employees can reap benefits when it is time for payment. With company-pay cards, employees never take money out of their personal accounts. This means that they can collect income on money by leaving it in their personal accounts.
Employees can also gain benefits when it comes to expense reporting. Electronic expense reporting can link the card purchases with corporate expense reports, meaning expense reports are automatically populated with all the transaction details. Employees will then only need to submit expense reports for expenses paid by cash or check. This can also assist businesses, as well. Electronic expense report systems may flag or identify expenses that are in violation of company rules or limits.
Lastly, an employee may be eligible for credit card rewards earned via the purchases they make on the card. Whether an employee can do so is normally dependent on the size of the company. Larger companies tend to allow their employees to keep any rewards earned on their corporate credit card, while smaller firms may use the rewards to offset annual corporate costs.
Corporate Cards Can Make Travel Easier
Corporate cards are often used for travel expenses, which means that cardholders may be entitled to benefits that can be enjoyed at airports and other similar locations. Cardholders may gain access to airport lounges. A corporate credit card can also offer protection against travel mishaps, including fraud. By carrying a corporate card, an individual is less likely to endanger their personal information. If anything does go wrong, the entire company’s travel program and the card issuer will be working to help the individual. Lastly, employees may gain access to insurance coverage because they are a cardholder.