All the business card's secrets for managing company expenses
Business cards are increasingly 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 how exactly the business card works? What are its benefits? Does it exempt employees from having to prepare expense reports?
We 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 granted to employees, whose use is strictly reserved for company-related expenses.
It is particularly used by employees whose travels are part of their recurring assignments, and where there are many expenses to be advanced.
This nominative card can be used to pay for :
- transportation expenses,
- mileage expenses,
- mission expenses related to business travel,
- NICT-related expenses such as software subscriptions, etc.
Generally, the company enters into 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 :
- directly from the company's account,
- or from the employee's account.
How the business card works
The business card works just like a conventional bank card. It can be used to pay for purchases, except that it cannot be used to withdraw cash from an ATM.
It's one thing to give your employees a bank card, but how do you make sure they respect the limits imposed by your spending policy? We understand your concern. After all, it's the company's bank account. You can set spending restrictions (maximum limit, geographical zones, 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 him or her to receive the reimbursement before the bank debits his or her account. It's also 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 efficient expense reimbursement and management system in place. This is the case with the Spendesk solution, which centralizes all means of payment (payment cards, expense reports and invoices) in a single tool. Its payment cards are secured and connected to the solution, enabling the company to customize the parameters of each card and obtain real-time visibility of purchases. In addition, each employee can track his or her balance and spending history.
Differences between a business card and a corporate card
Most departments refer indiscriminately to business cards and corporate cards. There is no real difference between the two; it's more a question of the term used.
However, some sites do qualify the term. 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 more out-of-pocket expenses
One of the most obvious advantages for employees is the fact that they no longer have to pay in advance for business expenses.
As these can be high if the person spends a lot of time on the move, it's a real relief to be able to pay the expenses necessary 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 expense limitation
For the company's manager, accountant or CFO, being able to set spending limits automatically and in line with policy takes the worry out of the equation.
What's more, it's possible to customize the parameters for each card, and therefore for each employee, according to their specific needs (geographical area, days of use, limits, etc.).
Visibility on expenses
The Business Card gives you real-time visibility of all your expenses.
Connected 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 expenses on a regular basis, 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 distribution of your budgets. Connected with an intuitive mobile application, and a web-based management console, it offers real-time control and visibility.
Simplified business travel
Managing expense accounts for business travel is an additional mental burden for employees. Between :
- being careful not to spend more than authorized,
- being careful not to lose receipts for reimbursement,
- or wondering when all those out-of-pocket expenses will be reimbursed.
With the Business Card, employees on the move no longer have to worry about all this, and can make the necessary expenditure with complete peace of mind.
Fighting 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 behavior causes the company to lose money by reimbursing expenses that are not due, and can generate a loss of up to 5% on annual revenues (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 purchasing
Online purchases are particularly sensitive, as the risks of piracy are very real and increasing every year.
To counter this, consider single-use virtual cards. They give you the assurance of buying online with a high level of security! Each time you make a purchase, you generate a card with your own personal 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 in the course of his or her duties,
- 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 accounting 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, despite all the associated advantages, a business card doesn't absolve the company of the need to manage its expense accounts in parallel. That's why (as mentioned above) it's a good idea to have a tool that automates expense management as much 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