What are the benefits of corporate credit cards for startups?
Scale up your expense management process by using corporate cards. A smart and flexible card offers custom control, budget compliance, and cashback for recurring expenses.
Usage of corporate cards in managing employee expenses is increasingly gaining popularity. Corporate cards or Business payment cards are yet another expense management tool wherein funds are loaded by the admin for employees to make business payments or expenses.
Corporate cards act as a substitute for physical currency or cash payments. Each employee owns a corporate card that is linked to centralized software. Any ongoing or past activity made through the card will be displayed on the software in real-time. Employees are given corporate cards so they may pay for business expenses without having to pay out of their pocket or use the company credit card.
Corporate cards bridge the gap between employee spending and spend management software.
If the card's spending limit is reached, staffs can quickly request more funds by sending approval requests. The budget owner or the finance manager can deny or approve the request after verifying the details for the funds.
Paying for expenses with corporate cards eliminates the need for out-of-pocket expenses. And this avoids the process of filing those expense reports and waiting for reimbursements. Employees can upload the photograph of receipts directly into the system.
Limits on how much a cardholder can spend overall or per transaction can be set by a corporation. Accordingly, the ceiling amount for each card is determined. The admin can further limit financial exposure by adding restrictions for certain vendor categories, specific merchants, or countries.
Corporate cards eliminate the need to save those receipts in your shoe boxes or car rack. When you make purchases through corporate cards, you can upload your invoices to the expense management system. The physical verification of each expense is no longer required if payments are made through company-issued corporate cards.
The benefits of corporate cards do not cater to employees but also to the finance team
As corporate credit cards or simply business credit cards are linked to a centralized expense management software finance team can track & monitor real-time & analyze business spending across many divisions.
Corporate cards come with certain perks, but it depends on the platform and card provider. Perks range from cashback, gift vouchers, air miles, and discounts whenever you make B2B payments from corporate cards.
Whenever you make purchases from your corporate cards, it gets synced with the accounting software you use with all automated encoding. Thereby increasing its accuracy and reliability. And with this finance team can manage and reconcile payments easily.
Using a corporate card puts an end to receipt manipulation, and tampered bill amount finance teams can protect the company from fraud. The transaction history of each card will show the exact amount and spend category for each swipe. Hence, nullifying the possibility of fraudulent transactions.
Though business credit cards are the standard way to let employees pay for a wide range of business-related expenses, they come with several disadvantages. They create uncertainty, extra admin, and even fraud. The only advantage is that they work just like regular credit cards, so employees are quick to pick up and use. They may be the favored option but not the right fit for businesses.
There is no control over employee spending as you can't set spending limits on the card. And this might lead to an overdraft account, going over your spending budget, and making the company liable for the debt.
As there is only a single company card, every employee can not use it, and it creates a major hassle for everyone else who needs to spend. Why? Because you have to hunt down the card to make a payment or pay from your pocket and later file for those expense reports.
Being a physical entity, what if your card is lost or card details are stolen? It will lead to significant fraud risks & the loss of millions of dollars. Another fraud can be that the card might also be used for personal expenses by employees. It is challenging to detect such misuse manually.
Corporate credit cards don't provide visibility into your spending or give you detailed insights immediately. You will only be able to see your detailed list of expenses once the monthly expense statement is sent to either the finance team or the CFO. It isn't easy to track who is spending on what and how much.
Now, if employees have a single company card, they sometimes might have to pay from their pocket. And this means lots of receipts and invoices for your credit card purchases. It's a hassle for both employees to save those receipts and wait for reimbursements, and employees collect every receipt and match it with the card statements. And if receipts are missing, it's a nightmare to match those transactions.
Corporate cards are linked to your expense management system and generally involve a 7 step process.
- Get corporate cards for employees and distribute them to every employee.
- Set card settings like spending limits, approval workflows.
- Approve or deny funds requests.
- Attach paper receipts of corporate card purchases.
- Prepare and label transactions, verify information, and sync to your accounting software.
- Reconcile payments easily by accessing transactions and receipts from one single platform.
- Reimburse employees in a click.
Corporate cards work in 2 different scenarios:
Virtual cards: Virtual credit cards employ randomly generated numbers. Your card gets an expiration date and a security code, so you may use the virtual card number to make purchases online or through an app without ever taking your card out of your wallet or revealing your accurate account information.
Physical cards: Physical cards can be used to make purchases online, in-store, and in-app, and you can add them to mobile wallets.
Volopay's corporate cards are the best corporate credit cards for startups and new businesses to manage all their expense management needs. Volopay is a free solution to manage all your company expenses in real-time, so you never have to process another expense report. The perfect physical and virtual cards for all your business expenses!
- Unique cards for each budget
- Multi-tier expense approval
- Individual card analytics
For better overflow arrangement, each activity or budget is designated with a virtual card. The virtual card can also be created for a specific vendor like Google, LinkedIn, Facebook, etc. Volopay provides recurring card and these cards reset on the 1st of every month with the amount set as a limit when created.
Employees' cards are linked to a main virtual card, which displays all the activities made under the card's budget. Hence, whenever an employee creates a fund request, the total amount used will also be reflected in the main virtual card. This inter-linking helps in keeping track of expenses made for a particular budget.
After enabling the feature, a fund request approval will travel through a 2-level approval matrix. The first-level and second-level approver has to approve the fund request to make the request successful.
After the approval request is successful, the funds will be loaded into the employee's virtual card. This functionality helps understand how many times an employee has created a fund request and who the approvers were.
Employee virtual cards are enabled with a spending ceiling to increase expense policy and budget compliance. Any expenses incurred above the limit will not be approved unless manually approved by the approvers.
Volopay allows pre-approval of some expenses which are petty and recurring. That means certain expenses need not go through the approval process. But to prevent misuse of this feature, the approval is limited to a certain amount only.
Volopay's purpose-built business cards are enabled to make merchant or vendor payments directly to their bank accounts. Prerequisites like banking details need to be fed only once in our software. To make on-time payments, the software generates alerts to remind of the upcoming payments.
The employee's card used to make the payment can be tracked, and granular details like merchant name, product/service provided, etc., can be analyzed.
Employees can pay through their business cards while undertaking business trips. Payments include accommodation, meals, cab services, etc. An estimate of funds required will already be pre-approved by the admins, but extra fund requests can also be generated from anywhere.
Through Volopay's corporate cards, the traditional system of matching expenses and bank statements is discarded. The virtual cards automate and sync all the transactions in the software, thereby balancing the ledger accounts.
Our integrated accounting and card system match the receipt to its payment card. Any discrepancies shall be immediately adhered to. This makes employees more responsible for their card usage.
Allocating an individual card to each employee also increases the chance of employee dishonesty. But Volopay's smart card ensures protection against them with features like card freeze and block card. The card freeze feature allows the admin to stop all the ongoing transactions and subscriptions or temporarily suspend the card.
What if by just making payments, you can earn unlimited reward points? With Volopay, you can. Volopay's rewards program allows its employees to earn reward points in gift vouchers, air miles, and discounts on consumable brands. This helps in inculcating using corporate cards to make business payments.
Expense reporting tools, credit limits, and spend control, are some of the features you should look for while choosing the corporate cards. Discover more.
Corporate credit cards help your businesses to handle expenses efficiently with real-time reporting and much more.