When it comes to the corporate world, it’s vital for companies to know how they spend their money and have a tight hold on their budget and spending management. That means you need corporate card management to control who has a company credit card, how much they spend on the card each month, and records to ensure proper accounting for the debt incurred on the card for tax purposes.
Spending management doesn’t just refer to expenses or debts, but the entire process from spending to the expense management process and more. Here, we’ll provide you with everything you need to know about corporate card management – a great way to manage your cash flow and keep your expenses in check.
What is corporate card management?
It’s essentially a platform that allows businesses to take care of any expenditure concerns. Either than using the platform, however, it’s also important that companies have a well-designed corporate card policy. With good corporate card management, companies will not only be able to save time and money by reducing physical paperwork but also simplify real-expense reporting, monitor overall cash flow, and outline rules as to how much employees can spend and more.
Best practices for efficient corporate card management
For efficient corporate card management, you would need to not just set expectations, but also communicate responsibilities and set controls
Decide who gets a card in the company
It’s also important that you decide who in the company gets a corporate card. Most of the time, corporate cards are only assigned to upper-level management or department heads. In some instances, however, there may be policies in place that allow other employees to receive these cards.
Set up criteria for who gets a card to avoid conflict. Employees should have a consistent need to make authorized purchases otherwise, it’s easier to handle reimbursements through a different system. The more cards in circulation, the more opportunity for abuse or theft by unscrupulous means.
Look at virtual cards
You could also look at virtual cards as employees may only require a one-time or limited access to a corporate card as an alternative to a corporate credit card.
Make sure that you set a clear budget so that you’re able to manage your expenses better. By having these controls in place, you’ll not only be able to better curb spending, but also provide your employees with a pool of funds to cover legitimate expenses.
Incorporate limits on cards and document purchases
Make sure that you set limits on your cards and as a part of your expense policy. Each user should have a limit for each month to help you keep a handle on your expenses. Also have employees update receipts to verify the accuracy of each transaction. Instead of physical receipts, however, try to incorporate digital receipts so you won’t have to worry about smudged or torn receipts.
Not only should you set monthly spending limits, you should offer training before issuing the card so employees know exactly what expenses they can charge and how to file a monthly report catagorizing their expenses.
Monitor spending habits
Something else that’s incredibly important is monitoring the spending habits of employees. Every transaction should be both recorded and categorised for not just transparency purposes, but also to allow you to use the credit card statements to monitor corporate card expenses and record them accurately for tax purposes and to file reports with investors.
With this information, you are better able to monitor and curb any excessive spending habits that your employees might have.
Effective corporate card management
It’s important that you incorporate an effective corporate card management system. By doing so, not only will you be able to manage your cash flow and budget better, but it also makes it far easier to ensure that employees have healthy spending habits.
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