With so many corporate cards available for business expenses, how do you choose the most suitable one for your company?
The optimal solution is not to select a single card but a mix of different company cards.
To choose the right mixture, you need to identify and observe spending habits within your company. There is usually a card best suited for each situation.
Pay special attention to these three questions:
- What type of expense?
- Who is making it?
- How much and how often?
Corporate cards: the options at your disposal
Business expenses are costs incurred by employees for work. These expenses are reimbursed by the company.
Using personal cards for individual business expenses used to be the norm. But better options have made it a thing of the past. Fewer and fewer businesses opt for the lack of visibility, confusion between business and personal, risk of fraud, and time-wasting procedures that personal cards bring to the table.
Company cards are now a much more practical solution. But there are many, each with its own advantages and disadvantages.
The corporate card
The corporate card is an individual plastic credit card. You can choose to link it to the company account or to employees’ accounts. This card is especially beneficial at higher expenditure volumes, such as for regular business travel at larger companies.
Other advantages include:
- A system interfaced with your expense management software.
- Automation of reporting processes, bank reconciliation, etc.
- Improving management
- Insurance coverage included with the card: including travel insurance and reimbursement guarantees in the event of fraud
The virtual card
The virtual card is a dematerialized card. No plastic needed! A unique card number is generated for each payment.
This payment solution allows for greater control over spending: the card issued is valid for a single payment, for which the amount of the fee and the supplier are defined in advance. This makes fraud impossible.
When a virtual card is used, the company's account is debited. This means that the employee who makes the payment is not responsible for the costs. This makes it the ideal card for employees who are not corporate cardholders.
Virtual cards are also centralized with your information system and management tools, simplifying expense management procedures.
The lodged card
A lodged card is a dematerialized card, just like the virtual card. The card is lodged at an external service provider, such as a travel agency or SBT (Self Booking Tool). It can be used for all business travel booking expenses:
- Flight ticketing
- Train ticketing
- Hotel reservations
Its advantages include:
- Only one billing statement
- The only contact to manage is the service provider
- The service provider takes charge of multi-vendor management and advances costs.
- Only one debit per month.
The purchase card
A purchase card is a more traditional corporate bank card. It is a plastic card, non-nominative and backed by the company account.
The purchase card, although practical, has some limitations in terms of security:
- The control and visibility of expenditure are weak.
- Use is vulnerable to poor employee practices, such as sharing codes and passwords.
- Paying for individual expenses is not recommended as individual expenses must be reported manually.
So what card should you choose?
The optimal solution depends on the situation. While your employees are traveling, a corporate card is going to best equip them for flexible transactions on the go.
The virtual card makes it possible to pay for occasional expenses without investing in an expensive solution... but without giving up the benefits of centralized payment solutions, such as control and visibility of expenses.
In addition, the employee does not have to advance any expenses and does not have to worry about submitting receipts or issuing expense claims to be reimbursed.
This is very practical for employees who are not familiar with the company's expense policy: an occasional event does not involve any complications in terms of management.
But what about larger expenses with multiple suppliers? The most suitable payment solution is probably the lodged card:
- The employee does not incur any expenses himself.
- Payments are centralized.
- Multi-vendor management is simplified with a single debit and a single billing statement.
And what about non-current expenses, which are often less frequent but larger in volume?
- Office supplies
- Small computer equipment
These purchases are usually made by the purchasing or procurement department and are best managed with purchase and virtual cards.
Choosing your card
Catering in the workplace and outside the company
Individual catering expenses not covered by meal vouchers or tickets should be paid:
- with a corporate card if frequent
- with a virtual card if infrequent
Business travel expenses
Travel-related expenses are among the costs that generate the most management effort and transaction volume.
A mix of credit cards is recommended.
- Adopt a lodged card for your accommodation and transportation bookings
- Provide a corporate card to traveling employees
- Choose a virtual card to cover travel expenses for rare travelers.
Transportation costs (excluding business travel)
- Commuting costs
- Mileage and fuel costs
- Parking fees
- Public transport costs
- Bike rental fees
Some of these expenses can be reimbursed without the need for a company card. This is the case for the total or partial reimbursement of transport tickets and passes for public transport or bicycles.
Fuel costs may be covered by a fuel card, which is a type of lodged card.
Corporate cards are best used for common car and parking fees.
Fees for NICTs
NICTs, or New Information and Communication Technologies, are increasingly common professional expenditures, especially as more people work remotely.
These costs include:
- Internet subscription
Purchase cards or single-use virtual cards are generally the best options:
- Use the virtual card in the case of a one-off individual expense, such as a work phone for a new employee.
- Use the purchase card for non-individual expenditures like phones for an entire group of employees.