Company credit cards can be lifesavers for businesses, offering convenience, helping manage expenses, and keeping cash flow smooth. But while these cards seem straightforward, there are a few little-known facts and hidden details that can impact how you use them.
If you're running a business or just using a company card, understanding the ins and outs of company credit cards can save you time, reduce headaches, and make your financial management easier. Here’s a look at some surprising things you may not know about company credit cards—and why they matter.
- What are company credit cards really for?
- Company credit cards aren’t all the same
- Expense tracking isn’t automatic—but it should be
- Company credit cards can impact business credit
- Not all expenses may be covered—and it can get costly
- Why Budgetly is the smart choice for managing company card expenses
- Benefits of using Budgetly for company card management
- Empower responsible spending with corporate cards
1. What are company credit cards really for?
Company credit cards, sometimes called corporate cards, are issued to employees to make purchases on behalf of the company. They streamline spending on everything from travel and client meals to supplies and subscriptions. While they're widely used, it’s not always clear to employees (and sometimes business owners!) what these cards are meant for and how they differ from personal credit cards.
A company credit card is strictly for business expenses, which not only helps keep finances organised but can also be a critical part of tracking spending, staying compliant with tax laws, and keeping personal and business finances separate. This separation is especially important for accounting and tax purposes, helping to avoid issues that arise from mixing personal and business expenses.
Key takeaway: If you’re an employee with a company card, check in with your finance team about specific spending guidelines and policies. Knowing the do’s and don’ts can save everyone a lot of hassle when it comes time for expense reporting.
2. Company credit cards aren’t all the same
Not all company credit cards are created equal, and understanding the differences can make a big impact on how you manage company finances. Depending on your business’s needs, you might choose between:
- Corporate cards: These are issued by banks to larger organisations, often requiring a credit review and having specific spending limits and controls for each employee.
- Small business credit cards: These are similar to personal cards but are issued in the business’s name and may come with benefits like cash back on purchases, expense categorisation, and higher spending limits than personal cards.
- Prepaid corporate cards: Prepaid corporate cards are payment cards that allow companies to load a set amount of funds onto the card for employees to use on business expenses. Unlike traditional credit cards, prepaid corporate cards don’t involve borrowing; instead, they’re pre-funded by the company, giving employees access to a specified budget without the risk of overspending.
It’s worth researching options and considering what best fits your company size and spending patterns. Choosing the right type of card can make a big difference in convenience and financial management.
Key takeaway: Look closely at what each type of card offers before deciding. Larger companies might benefit from corporate cards with more control features, while smaller businesses could find small business cards or prepaid corporate cards to be more flexible.
3. Expense tracking Isn’t automatic—but it should be
While company credit cards simplify purchases, they don’t necessarily make expense tracking a breeze. Many employees assume that using a company card means expenses are automatically tracked and organised. However, without an expense tracking tool, managing and reporting expenses can still be a hassle.
Employees are often required to manually report expenses, which can lead to forgotten receipts, delayed reports, and time-consuming back-and-forth between finance and employees. Even worse, mistakes in expense reporting can lead to inaccuracies in financial statements and potential compliance issues.
Using an expense tracking tool that integrates with company credit cards can automate the reporting process, making it easier for employees to submit receipts, and for finance teams to review and approve expenses. With automation, employees simply snap a photo of their receipts, and the expense is categorised and uploaded in real time.
Key takeaway: Consider pairing company cards with an automated expense tracking tool to reduce manual work and improve financial accuracy. Budgetly offers tools that simplify tracking for both employees and finance teams.
4. Company credit cards can impact business credit
Most people think of credit cards affecting personal credit scores, but few realise that company credit cards can impact business credit as well. This is especially true for small business cards, where the business owner’s credit is often linked to the card.
If a company card is misused or payments are missed, it can impact the company’s credit rating, making it harder to secure financing or favourable credit terms in the future. Conversely, responsible usage of company cards can help build strong business credit, benefiting the company in the long run.
For business owners, it’s essential to establish policies and educate employees on responsible usage to protect the company’s credit score. Regularly reviewing card statements and keeping payments on time can help maintain or improve business credit over time.
Key takeaway: Treat company credit cards responsibly, just like personal credit. Establishing clear usage guidelines and making timely payments will benefit your business credit in the long term.
5. Not all expenses may be covered—and it can get costly
When using a company credit card, it’s important to remember that not all expenses are eligible for reimbursement. Each company has its own policy on what’s allowed, and making purchases outside of this policy can mean out-of-pocket expenses for the employee. Misuse of company cards not only inconveniences employees but can also lead to unwanted costs, such as fees or penalties, for the business.
Some common exclusions in company credit card policies include personal expenses, excessive meal costs, and expenses that exceed daily limits. Before using your company card, be sure to understand your company’s expense policy to avoid paying out of pocket for unapproved expenses.
In addition, not following the rules can raise red flags for the finance team, leading to more scrutiny of expenses and potentially impacting the trust level between employees and management.
Key takeaway: Be aware of company policy on eligible expenses. Budgetly’s tools can help establish and enforce spending guidelines, making it easy for employees to know what’s covered and what’s not.
Why Budgetly is the smart choice for managing company card expenses
Managing company cards can be a lot easier with the right tools. Budgetly instantly issues prepaid corporate debit cards for your teams, with physical and virtual options available. Here’s how Budgetly can take the hassle out of company card management:
1. Real-Time Expense Tracking
Budgetly’s expense tracking feature allows employees to log expenses in real time. All they need to do is snap a photo of the receipt, and Budgetly automatically categorises it, so there’s no need to worry about losing receipts or delaying submissions. This real-time tracking ensures that finance teams have a clear picture of spending, helping with cash flow management and budgeting.
2. Customisable Spending Limits
With Budgetly, you can set custom spending limits for each employee or department, helping to control costs and prevent unauthorised spending. These limits can be adjusted as needed, giving your business the flexibility to scale and adjust policies based on current needs.
3. Automated Reporting and Reconciliation
Forget about manually sifting through credit card statements at the end of the month. Budgetly provides automated reporting, which saves time for finance teams and ensures accuracy in expense reconciliation. This feature also helps managers track spending patterns, making it easier to adjust budgets and identify areas where cost savings can be made.
4. Clear Expense Policies
Budgetly allows you to create and enforce clear expense policies, so employees know exactly what’s covered by the company and what’s not. With these guidelines in place, employees can feel confident about using their company credit cards within approved limits, avoiding confusion and out-of-pocket expenses.
5. Seamless Xero integration
Integrate Budgetly with Xero or your existing accounting software in one click. Sync your data effortlessly and ensure consistency across all your financial platforms.
Benefits of using Budgetly for company card management
Empower your employees with real-time issuance of corporate prepaid VISA cards and say goodbye to petty cash, endless paperwork and waiting on the big banks.
Time Savings
Automated tracking and reporting reduce time spent on admin tasks for both employees and finance teams.
Improved Financial Accuracy
With real-time tracking and automated categorisation, your financial reports stay accurate, reducing errors and discrepancies.
Enhanced Transparency
Employees and managers have a transparent view of spending, which builds trust and helps enforce accountability.
Better Cash Flow Management
With all expenses tracked and categorised, finance teams can manage cash flow more effectively and adjust budgets as needed.
Stronger Compliance
Customisable spending limits and policies help ensure that expenses comply with company guidelines and tax requirements.
Empower responsible spending with corporate cards
Company credit cards are essential tools for modern businesses, but they come with their own challenges. By understanding the ins and outs of how they work—and using smart solutions like Budgetly to manage them—you can make company cards work for you, not against you.
With Budgetly, your team can enjoy the convenience of prepaid corporate cards without the usual headaches of tracking, approvals, and reimbursements. From customisable policies to real-time expense tracking, Budgetly streamlines every step of company credit card management, helping your business stay organised, efficient, and financially savvy.
So, if you’re ready to simplify your company’s credit card management and improve your financial processes, give Budgetly a try. It might just be the tool you’ve been waiting for to make your business spending smarter and simpler.
Corporate credit cards aren’t your only option in expense management. To learn more about how Budgetly works, download our eBook, Managing Expenses with Budgetly. Alternatively, schedule a demo with us today to find out how we help businesses make expense management easier.
