5 best practices for corporate credit card management

It doesn’t matter what type of startup you’re running: You need a foolproof way to track money spent by employees on behalf of your business. The larger your startup grows, the more complex this becomes. 

In some cases, businesses employ traditional employee reimbursement programs. In others, they turn to corporate credit cards. 

Corporate credit card programs best practices 

Over the past several years, corporate credit card programs have become more sophisticated, intelligent, and tuned in to the needs of business owners. From the ability to instantly issue virtual cards to setting smart controls around spending and credit card limits, to full-blown expense management systems, startups of all sizes can benefit from corporate credit card programs like Ramp offers.

This article covers the two most popular methods startups use to facilitate and track expenses and shares our best practices for controlling corporate card programs.

Corporate credit cards vs. employee reimbursements

Businesses typically manage spending by facilitating employee reimbursements for out-of-pocket expenses or issuing corporate credit cards to employees.

Employee reimbursement programs have been used for years by small businesses and large corporations alike. However, the process is complex, time-consuming, and cumbersome for everyone involved. Employees often front the business-related expenses on their personal credit cards, which add up quickly if travel or client relations are a large part of their job. Employees must track and file expense reports with managers, who review, approve, and pass them along to the finance department to process the reimbursement.

With a corporate credit card account, businesses can manage all employee expenses from a single platform with built-in controls and expense management systems. Finance teams and business leaders gain greater organizational visibility for who spends what, where, and why. Plus, employers can access perks and rewards, or accumulate points they can apply toward their business expenses. 

In some cases, businesses may take a hybrid approach. Companies typically issue corporate credit cards to key members of leadership leaders who are responsible for spending on behalf of the business. Employees who only require occasional reimbursements can use personal payment methods and follow the employee reimbursement process for reimbursement.

How do corporate cards make expense management easier?

Corporate credit cards allow the finance team and business leaders to proactively manage employee expenses in several ways.

• Set spending limits and enforce card transaction rules by employee or business unit

• Control approved merchants/vendors and locations of credit card transactions

• Request purchase approval before transactions take place

• Monitor cash flow via a single credit card platform

• Facilitate expense reporting process from within the business credit card platform

• Immediately issue credit cards to new employees, with instant access to virtual cards

• Limit fraud and misuse of business cards with built-in controls and proactive monitoring

Some business leaders shy away from issuing company cards to members across their organization for fear of losing control of expenses or misused funds. However, with a thoughtful partner and clear expense policy, businesses may find employing a corporate card program helps them save time, resources, and money as they grow.

5 best practices for managing corporate credit card use

For any corporate credit card program to succeed, a business must set expectations and clearly communicate cardholder responsibilities. At Ramp, we work with hundreds of companies of all sizes across every industry and have developed a set of best practices for managing corporate credit card use.

1. Create an expense policy

Before issuing a single corporate credit card to your employees, take the time to set up a company credit card policy and guidelines for your business. This expense policy should set expectations and clearly communicate corporate cardholder responsibilities from day one.  

Beyond keeping business expenses under control, a thorough corporate expense policy is important to implement and follow should your business undergo an audit. 

2. Set limits on spending

Work with team leads to set an overall budget and allow managers to allocate funds to teammates accordingly. Startups can more actively manage corporate credit card spending by setting limits on spending or usage at the team and individual levels. 

3. Monitor employee spending habits

Proactively manage employee spending habits by setting alerts and monitoring transaction activity regularly—not just when the monthly statement is delivered. This is especially important and helpful for early-stage startups and entrepreneurs with limited operating capital. 

4. Make your corporate credit card expense reporting easy

The simpler the expense reporting process, the more likely your employees will follow it. Investing in a spend management tool is a great way to streamline and remove friction from your expense reporting process. 

5. Sync directly with your accounting software

When a business implements modern corporate credit card management software, it can save finance teams considerable time and paperwork. Look at credit card integration programs with your accounting software and automatically pull through receipts and transaction categorization details. Your finance team or accounting department will appreciate the “last mile” data entry automation.