What bank account are your employees' corporate cards connected to?
Do you prefer corporate or employee responsibility?
We have had the opportunity to set up corporate card programs in companies around the world. One trend is that companies are increasingly choosing to have corporate cards backed by the corporate account.
In other words, companies are choosing to be responsible for transactions, rather than placing the responsibility on employees. Why is this happening?
Choosing individual responsibility is based in an outdated value system
Why do some companies opt for individual responsibility?
The most common answer to justify backing the corporate card with the employee's account is that the employee would be more accountable for his or her spending.
Individual responsibility therefore addresses two concerns:
- The risk of fraud
- Delay in the issuance of expense reports
However, these fears appear to be based more on belief than on fact. Do you really know the rate of corporate card fraud or the rate of unprocessed receipts?
The belief appears to be unjustified. Today's technology allows managers to personalize corporate cards according to a wide range of parameters:
- Geographic limitations
- Expenditure ceiling by category
- Expenditure limits by type of merchant
- Limitations according to currencies
- Authorizations according to the cardholder's profile
and more.
This significantly limits non-compliant transactions. In addition, financial and accounting administrators see transactions in real time and are instantly alerted of potential fraud.
Do unrealistic fears of fraud and expense delays justify giving up a better-controlled corporate card program? By opting not to take responsibility for expenses, your company foregoes many benefits, including data transparency and cost control.
The benefits of corporate responsibility for your corporate card program
Contrary to popular belief, not only does corporate liability not increase the risk of fraud or delays in processing expense claims, but it also confers many benefits.
Expense control: The company tracks and controls expenses in real time. Visibility is total, while expenses remain opaque with individual accountability – until the expense report is issued. In addition, transactions are controlled thanks to the corporate card's customized settings (limits, payment terms). A non-compliant or fraudulent transaction is refused or reported.
Security for business travelers: Corporate cardholders are easily located in case of emergency.
Separation of business and private expenses: The solvency of employees is no longer taken into account when incurring professional expenses. There are no problems with blacklisted employees and everyone is able to receive their corporate credit card. The deployment of a corporate card program is then simplified and faster. Conversely, employees' personal cash flow does not suffer from the sometimes not inconsiderable expenses incurred during business trips.
Employee satisfaction and compliance: Shifting responsibility for expenses to the company relieves employees of a burden. No more anxiety about late expense reimbursements. In addition, managing mobility expenses is simplified with the corporate card. Satisfied employees have been shown to be more compliant with the current spending policy, with a higher compliance rate.
Transaction security : Corporate responsibility does not imply that a corporate cardholder should be held liable for any irresponsible behavior by a corporate cardholder. The company benefits from a "misuse" insurance policy that fully covers it in the event of a dispute.
Moreover, if the company opts, in addition to corporate liability, to debit the company's account, it benefits from another significant advantage:
A better adoption of the corporate card: Since employees do not advance the fees themselves, they prefer the use of the corporate card to their personal means of payment. Thus, expenses are traceable and it is easier to optimize budgets as they are incurred. The result: fewer expenses incurred outside the channels provided for this purpose, and therefore fewer surprise expenses discovered at the end of the month or which don’t comply.
