Last Updated on: Juni 3, 2024 at 7:28 am
When it comes to bisnis perjalanan, adopting a corporate card can be a game-changer for your organization. Corporate cards offer a streamlined solution for expense tracking, management, and control, significantly reducing the administrative burden on both employees and finance teams. However, despite these benefits, concerns about internal fraud and misuse often make executives hesitant to implement a corporate card program.
Corporate cards are frequently misunderstood, with many misconceptions surrounding their use and advantages. If you are contemplating whether to issue corporate cards to your employees for business travel, this article is for you.
Read on as we delve into the most common questions regarding corporate cards, helping you understand their functionality and the substantial benefits they can bring to your organization’s travel management.
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Contrary to common practice, personal credit cards aren’t suggestively intended to be used for your business-related expenses. Legally speaking, consider the vice versa for your corporate credit card, which your employee can’t use for their personal expenditures. So what do you need a corporate card for exactly?
It is a card that your company issues to your employees, keeping them as the authorized users for transactions. Its purpose is to facilitate finances related to company activities, such as travel management, entertainment, supplies, and other operational costs.
However, unlike credit cards, where the owner himself is responsible for the account; with corporate cards, the ownership and management remain in the hands of the company itself. This means that your organization has the right to set spending limits, monitor transactions and authorize purchases and payments for each card.
Keeping your business and personal expenditures separate is the gateway to keeping your finances in check. With corporate cards, you not only ensure this but also avail yourself of features tailored to your business needs. In fact, you might also enjoy rewards and incentives such as cashback on travel expenses or discounts on business-related purchases.
Obtaining a corporate credit card shouldn’t be difficult, given your company demonstrates financial responsibility and meets eligibility criteria.
It’s true that larger established companies qualify easily as opposed to smaller businesses or startups, which undergo a bit more security. But if you have your company’s credit history, revenue, and existing relationships with financial institutions in check – you’ve got nothing to worry about.
Also, keep certain documentation, such as your financial statements, tax returns, business plans, and details about the company’s ownership structure, in hand. To give your approval a far greater edge, try to incorporate clear internal policies such as an efficient travel policy, financial administration, and corporate card usage.
The only catch is that you must show your company’s creditworthiness. For that, make sure that every bit of information you provide is accurate and comprehensive.
Your company will be responsible for paying off the credit on a corporate card. However, while the company assumes liability for the charges, the employee to whom the card is issued is equally responsible.
Your corporate card program must ensure that employees use the card responsibly and in accordance with company policies. Misuse of the card, such as making unauthorized or personal purchases, needs to result in disciplinary action.
In a way, the corporate cards work the same way as the basic credit cards do. At the end of each billing cycle, credit needs to be paid off to avoid interest or worse, getting your cards revoked. Except that, in this case, you have to protect your company from being at risk.
Therefore, to keep things running smoothly, you need to ensure a system where bills are paid timely and your credits are all clear.
When it comes to credit points for every corporate card usage, companies need to establish clear policies regarding their ownership. A fair approach would be to divide a percentage of the score between the company and the employee in the form of assets and benefits, respectively.
A corporate or business debit card also caters to business-related transactions, except that with every transaction, the amount is immediately deducted from the company’s account. This way, there are no chances of debt or interest.
While both corporate cards and business debit cards are intended for a similar purpose – taking care of your company’s financial operations – they are indeed different in a few ways.
First things first, corporate cards work on credit transactions. This means that you are essentially borrowing the funds for a specified amount of time until the billing date arrives. On the other hand, business debit cards, as we stated earlier, call for immediate and direct deductions that don’t extend the available funds.
Speaking of, business debit cards have sending limits determined by the available balance in your company’s account. As for corporate cards, there is a preset spending limit that isn’t necessarily dependent on the existing funds.
That said, with business debit cards, you can best access basic transaction history. If you want robust reporting, expense categorization, and integration with expense management systems, corporate credit cards are a better option.
Travel expense management is one of many benefits of a corporate card, and with a platform like TruTrip, things get simpler than ever. Being an ally to both your company’s travel managers and travellers alike, TruTrip streamlines your financial management process while enhancing security and ensuring compliance. Our app offers customizable budget limits that revolutionize the way your company keeps business travel expenses in check.
Join us by integrating your card with TruTrip today for a business travel experience like never before!
TruTrip menyederhanakan pemesanan, manajemen, dan pelaporan untuk perjalanan bisnis tanpa kerumitan.