How to select the right corporate card for your business

From software and equipment to travel and services, the old axiom still rings true – you have to spend money to make money.

However, actually spending money as a company can be a tricky business. It creates the need for expense reports, spending management, financial oversight – not to mention physical cards that need to be properly administered and managed.

Fortunately, company spending cards can make this a much simpler and more streamlined process.

What Are Company Spending Cards?

A company spending card is a card specifically intended to cover company expenses. Like any other card, they have a card number, security code, and expiration date. They have a number of extra features and capabilities that make them much better suited for businesses though, such as employee spending limits and accounting integration. They can be prepaid or credit-based, depending on your needs and the solution you end up selecting.

Company spending cards were created to meet the challenges that growing businesses face when it comes to managing their expenses. Traditional credit and debit cards are too limited to work effectively for most companies. You’re typically only allowed a few cards at once – which are often distributed amongst senior level management – and you have little to no control over how your employees use them.

That poses several potential risks and the result is that businesses end up sharing cards amongst employees, or placing the burden of expenses on employees and reimbursing them later. Each of these creates a logistical nightmare that make expense tracking and reporting a major challenge. These challenges are what inspired the creation of company spending cards, which aim to tackle these problems with effective solutions.

CORPORATE CARDS VS. SMALL BUSINESS CARDS

Company cards come in two varieties: corporate cards and small business cards. As you can probably deduce, corporate cards are better suited to larger corporations that expect at least $250,000 in credit card expenses annually. On the other hand, small business cards are better suited to companies that are just starting to grow or accumulate less annual expenses.

Corporate credit cards are typically more difficult to obtain, as they are designed for clients that earn several million in revenue annually. These cards are also much more expensive to maintain, with high fees and interest rates.

Small business cards, on the other hand, can be used by businesses of all sizes, even those that are just getting started. These cards are less costly and have a simpler application process, all while unifying a business’s expenses and streamlining the way they handle employee spending. The choice of which card to go with comes down to your business’s unique needs, however, most companies will be perfectly suited with business cards rather than corporate ones.

How Company Spending Cards Work

To get set up with a company spending card, you’ll go through an application process that’s pretty similar to that of any other financial application process. Then, once you have your cards, you can preload them with as much money as you need and distribute them amongst your employees. These cards can be used for in-store purchases and online purchases, all while keeping the financial managers at your business in control of the spending.

What separates company cards from more traditional corporate solutions is the way they unify your company’s spending. Each card can be managed and monitored from a central dashboard. And since there’s no need to reimburse employees or to require them to report spending, you can easily track, control, and inform your business’s spending habits in real time. By streamlining your expense reporting and making your accounting needs much simpler, you free up your resources to focus on more important things, like growing your business.

Company spending cards can be used for things like general office expenses (office supplies, equipment repairs), software subscriptions, and travel costs for employees in the field.

The Pros and Cons Of Company Cards

In order to decide if company spending cards are the right option for your business, here’s a rundown of the primary things to consider.

PROS:

They scale with your business.
Unlike traditional debit and credit cards, company spending cards are designed to grow alongside your business. The right spending card will provide your business with the resources to promote growth in a sustainable way. They will empower your employees to make the purchases they need to do their jobs effectively, and are shown to increase employee engagement and satisfaction.

Increased financial security.
Keeping your company’s funds secure is, obviously, a top priority. There is a common misconception that distributing cards more widely leads to increased expense fraud, but in fact, the opposite is true. With real-time overviews and simple account management per card, it’s easier than ever before for financial controllers to monitor and track where money is being spent and by who.

Streamline your expenses.
This is especially important if your business is just starting to grow out of its “small business” title. The bigger your business, the more it’s likely to spend, which results in increased expensing duties. According to research carried out by Pleo, for a business with 100 employees, the cost of manual expense reporting is almost £30,000 a year – much of this cost is eliminated with an automated spending card solution.

CONS:

Losing company cards.
Forgetfulness is human nature, so the likelihood is that an employee will misplace one of your business’s cards at some point. When picking your card provider, make sure that they have a system in place that allows you to quickly lock and deactivate lost cards.

Complicated fees.
Depending on which provider you end up choosing, you could end up with complicated and exuberant monthly fees. Be sure to choose a company card provider that make payments simple and straightforward.

Choosing The Right Company Card For Your Business

Whether you’re a complete rookie when it comes to company cards or you’re thinking about switching from your current card provider to a better one, the path to finding the right option can be difficult to navigate.

The best way to make sure that you get the right company card provider for your business is to create a list of your must-haves before you start comparing your options.

Here are some of the features we think the right card provider should have.

✔ Cards For All Of Your Employees

You’ll find that as your business grows, having one or two company cards that all of your employees share can become a major hassle. When choosing a card provider, make sure to find one that offers unlimited cards for all of your employees – both virtual and physical.

✔ Simple Spending Limits

Managing your business’s expenses isn’t just about figuring out what you need to be spending money on, but also how much. The right company card should have flexible and easy-to-manage spending limits for each of your company’s cards. This helps facilitate the role of your financial managers and reduces the risk of overspending.

✔ Reliable Customer Support

Your card provider’s customer support should be just as reliable as their cards themselves. You’re depending on these cards for your business, so when an issue arises, it needs to be resolved as quickly and painlessly as possible. Be sure that the provider you end up choosing has a strong customer service team. Product reviews can be a good place to check this.

✔ Fraud Detection

While having several company cards is a great convenience – and oftentimes a necessity – more cards equals more opportunity for something to go wrong, like loss, theft, and even fraud. The right card provider should have systems in place to not only handle these situations when they occur but also reduce the chances of them happening altogether.

✔ Easy Management

A major advantage of company cards over traditional credit and debit cards is the ability to easily oversee and manage all of your business’s expenses and spending habits. Look for providers that have ample resources for managing your company’s spending.

✔ Accounting Integrations

One of the best things about using company cards is the unification of all of your company’s expenses. But what good is that centralization if you can’t use it? You don’t just want a card provider that offers their own software, but one that allows you to integrate with other services you already use. This can make the transition to a new company card even smoother.

✔ Fast and Seamless Set-Up

Moving to a new credit or debit card can be difficult enough for individuals; getting new cards for a company and all of its employees has the potential to be a serious headache. Opt for providers that have a fast and easy set-up process so that you can minimize the time and difficulty of transitioning into a new company card system.

How To Get A Company Spending Card

There are two primary ways to get a company spending card(s) for your business. The first is what we’ll call the “traditional” way: through a banking institution. Different banks will offer different company card solutions, though they’re typically more restrictive than other options – both in terms of who they give them to and what the cards are capable of.

The other option is through an independent provider, like Pleo. Opting for an independent provider means you’ll have significantly more options available to you, as well as more flexibility in how you use your company cards. Typically, with a solution like Pleo you could be set up as a new customer within a matter of hours.

Each option – and every provider – will have a unique application process, so compare your options carefully and decide which is best for the way you want your business to work.

Want to read more on creating a company expense policy that your employees will actually embrace? Check out this guide.