Our Love-Hate Relationship with Corporate Credit Cards

Honestly, we have mixed feelings about corporate credit cards— where you give five of your employees their own card, and one consolidated bill shows up each month—based on what we have seen over the years. If you are considering implementing a corporate credit card program, or even if you already have one in place, please read on. We want our readers to know what works and what doesn’t based on our experience.

Why we love them for your business:

• Clear end of month cut off. Rather than waiting for those five employees to submit expense reports for their own personal card, the monthly credit card statement includes most of the business expenses for the month in one place.
• Credit card rewards. Let’s face it, the points on those cards are great for your business. Whether you cash the points in for $25 gift cards as employee spot bonuses and holiday raffle prizes, or you use them to book travel to save costs, the points can add value.

Why we are nervous about them for your business:

• Lack of oversight. Too many CEOs are guilty of never looking at the credit card bill. And in many cases, their designee isn’t giving the task the appropriate weight to do a thorough review.
• Overpaying. Auto-billed charges to your credit card are often overlooked since the amount/vendor is taken for granted as a ‘regular or recurring vendor for our business.’  Ownership of those vendors and the services they provide is often an after-thought, and too many times you are paying for a service you no longer use.
• Documentation. Submitted receipts and explanations for each charge often isn’t a priority to your staff since it has no consequence (remember the employee is not out of pocket).  Not collecting detailed information about each charge, creates two major problems for your business:
  • Charges billable to your clients are never billed, or are not billed timely.
  • Review of the receipt allows the CEO’s designee to review a charge and validate its reasonableness in amount and utility.

One way to help alleviate some of the cons of having corporate credit cards is to collect data through an online expense reporting tool such as Tallie or Concur. These systems ensure completeness, help support a paperless work environment, and give employees an online tool to get it done.  For more information check out our blog on AP Expense Report Automation.

We support our clients using these programs for the positive reasons outlined above, but we want you to go into it eyes wide open.