All the secrets of the business card for managing company expenses
Business cards are increasingly being used by companies as a means of payment.
You're tempted by the idea of equipping your employees with this type of card for business expenses, but you're wondering exactly how the business card works? What are its benefits? Does it exempt employees from having to draw up expense reports?
We'll reveal all the secrets of the business card in this article!
What is a business card?
Business card definition
The business card is a means of payment given to employees, to be used strictly for company-related expenses.
It is particularly used by employees whose travel is part of their regular duties, and where there are many expenses to be paid in advance.
This nominative card can be used to pay for :
- transport costs
- mileage expenses
- business travel-related expenses,
- IT-related expenses, such as the purchase of a software subscription, etc.
Generally, the company makes an agreement with a bank (LCL, Crédit Agricole, Société Générale, BNP Paribas, etc.) or a service provider to obtain business cards for its employees.
Expenses can be debited :
- either directly from the company's account
- or from the employee's account.
How the business card works
The business card works in the same way as a traditional bank card. It can be used to pay for purchases, but cannot be used to withdraw cash from an ATM.
It's one thing to give employees a bank card, but how do you check that they are respecting the limits imposed by the spending policy? We understand your concern. After all, it's the company's bank account. You should know that you can set spending restrictions (ceiling, geographical areas, certain days of the week, etc.) individually for each card.
If the card is linked to the employee's account, you can set up a deferred debit that does not immediately deduct the amount paid. This is much more convenient for the employee, as it allows them to receive reimbursement before the bank debits their account. It's a guarantee of peace of mind, as the debit can be deferred for up to 1 month after the expenditure.
Of course, this also applies if the company has an effective expense reimbursement and expense management system. This is the case with the Spendesk solution, which centralises all payment methods (payment cards, expense reports and invoices) in a single tool. Its payment cards are secure and connected to the solution, enabling the company to customise the parameters of each card and obtain real-time visibility of purchases. Each employee can also track their balance and spending history.
Differences between a business card and a company card
Most departments refer to business cards and corporate cards interchangeably. There is no real difference between the two; it's more a question of the term used.
However, some sites may qualify this. In this case, the business card refers to the system that debits the employee's account, while the corporate card refers to the system that operates directly on the company's bank account.
The advantages and limitations of a business card
What are the advantages of a business card?
No need to pay in advance
One of the most obvious advantages for employees is that they no longer have to pay upfront for their business expenses.
These can be high if the person spends a lot of time on the move, so it's a real relief to be able to pay for the expenses they need to carry out their duties.
With peace of mind, there's no doubt that your employees will be even more efficient during their missions!
Automatic limitation of expenses
For the company's director, accountant or CFO, being able to set spending limits automatically and in line with policy takes some of the worry out of the equation.
What's more, it's possible to customise the settings for each card, and therefore for each employee, according to their specific needs (geographical area, days of use, maximum limit, etc.).
Visibility of expenditure
With the Business Card, you get real-time visibility of all your spending.
Linked to your expense management solution, you can consult them in the system, so you always have better control over them, and consult the statement of expenditure regularly, which is also accessible to the cardholder.
This is what Soldoallows you to do , a truly tailor-made solution for SMEs that makes it easy to manage expenses with highly configurable business cards (physical and virtual) that can be assigned to a user, department or project, giving you agile control over the allocation of your budgets. Connected to an intuitive mobile application and a web-based management console, it offers real-time control and visibility.
Simplified business travel
Managing expense claims for business trips is an additional mental burden for employees. Between :
- being careful not to spend more than authorised
- making sure you don't lose the receipts you need to get reimbursed,
- or wondering when all those advanced expenses will be reimbursed.
With the Business Card, employees on the move no longer have to worry about all that, and can make the necessary expenditure with complete peace of mind.
Combating fraud
While not all your employees are fraudsters, far from it, many companies are affected by the phenomenon of false expense claims.
71% of French companies are affected by fraud.
Cabinet PwC (Global Economic Crime Survey 2018)
However, this type of behaviour causes the company to lose money by reimbursing expenses that are not due, which can lead to a loss of up to 5% of annual income (Oversight Systems 2017).
In addition, the company may be exposed to risks if an URSSAF inspection detects anomalies in the processes.
The use of business cards can alleviate these problems.
Secure online purchases
Online purchases are particularly sensitive, as the risks of piracy are very real and increasing every year.
To counter this, think about single-use virtual cards. They give you the assurance of buying online with a high level of security! For each one-off purchase, you generate a card with your own details, thus preventing piracy.
What are the limits of the business card?
The business card is an asset :
- for the employee, who has less to worry about when it comes to spending on his or her work,
- and for the company, which can keep better track of these expenses.
However, this system does not exempt the employee from having to produce expense claims and supporting documents, which the accounts department will then have to check and process - a process that can be very time-consuming!
So it's important to bear in mind that a business card, despite all the associated advantages, doesn't mean that the company doesn't need to manage its expense accounts at the same time. That's why (as mentioned above) it's advisable to have a tool that automates the management of expense reports and expenses as far as possible.
So, are you ready to switch to a physical or virtual business card for your company? Do you already use this type of service? Tell us about your experience in the comments section.
Article translated from French