22 Sept 2022
4 min read

The importance of effective corporate card management

Trish Toovey - Content Director at Payhawk - The financial system of tomorrowTrish Toovey
Woman withdrawing money at ATM using Payhawk's corporate card.
Quick summary

Managing corporate cards effectively can help you gain true visibility over company spending. It’s not just down to cards though, the supporting software is key.

Table of Contents

    Complete visibility over spend is crucial — it's what will enable your organisation to scale up rapidly.

    Although businesses already understand the importance of spend management, many just can't get their hands on that vital visibility. This missing link could be down to legacy systems holding them back. Or perhaps a card choice based on rewards rather than one supporting accurate, trackable, real-time spending.

    If your business uses generic business credit cards without supporting expense management software, you're already creating more work for your finance teams — and employees. Finance teams likely have to pin down specific payments made by everyone in the company through just a handful of cards. And employees need to remember to collect and submit paper receipts so the payments can be matched when it comes to month-end.

    If you're currently using prepaid cards, you'll be facing a different set of problems. You'll notice they have limited use — you can't always use them where you want to, i.e., pay for Google ads, and you might also find you're limited from withdrawing cash out of ATMs.

    You need to find a card that suits your business model and supports how you operate daily. And you need flexibility and visibility.

    Save time & take control with corporate cards from Payhawk

    Debit cards vs prepaid cards vs credit cards

    There are many options, so which should you choose? First, you need to understand which would suit your organisation best — which card will deliver the most value to your teams and which card will give you the deepest insights into company spending.

    Company cards have the potential to remove unnecessary red tape inside your organisation (while still supporting governance and control). And these cards can give much-needed power to your frontline staff — provided they're supported by efficient expense management software.

    Real, effective spend management, including company cards and expense management software, means your employees no longer have to run to your CFO or finance department to get approval for company card use. Instead, they can simply spend within the limits you set for each team or department as finance manager or CFO. This is particularly helpful as your company scales.

    Debit cards

    You can choose to have virtual or physical debit cards — the former is much quicker to get hold of — in fact, it's instantaneous. Employees have access to the card on the same day. You can set custom limits for debit cards, so spending can't get out of hand, which helps you maintain a healthy cash flow.

    Unlike a credit card, a debit card relies on funds directly from your business bank account, which means you can run out of money. Here, you might benefit from tighter spending limits or stringent approval workflows for all purchases.

    Company credit cards

    Credit cards are the perfect solution for businesses who want to access a line of credit rather than rely on their own funds. But be aware of the interest charged on these kinds of cards — it’s one more expense you’ll need to closely monitor. But you can quickly repay the money lent on credit cards to avoid unnecessary fees or charges.

    Prepaid cards

    Pre-loaded cards work exactly like the company credit card you’re used to, but instead of using credit, you’re spending directly from company funds. And you can issue both physical and virtual prepaid cards. But employees can’t spend indefinitely, budgets are easily changed as necessary, and each payment is traceable to every employee, making card management super simple.

    The main difference between a prepaid card and a debit card is that not all merchants accept payments from prepaid cards, limiting your ability to spend freely. Learn more about the difference between credit cards, prepaid cards, and debit cards.

    It's not just about the type of card you have; you need the software to match

    The type of card you choose is important — crucial. But as previously mentioned, you also need the right software to support it. Without the right technology, you can't get visibility over spending, and you can't set limits, introduce card controls, and report on spending accurately.

    In a recent Harvard Business Review Analytic Services report, in association with Payhawk, ​​64% of business leaders said finance departments should work more on "analysing financial data to make recommendations on the organisation's high-level business model and strategy." But how can finance teams hope to do this without a) good spend visibility and b) productive time away from chasing receipts and inputting manual spend data.

    You still need a solution to help you deliver good on those business growth objectives, release your finance team from the shackles of time-intensive, non-value-adding activities, and encourage them to take a more strategic and proactive approach to grow the organisation.

    P.S. at Payhawk, all our cards are Visa Commercial Cards. This means they're the most widely accepted card globally when compared to Amex and Mastercard.

    The benefits of managing spend limits and bulk cards policies

    As your organisation grows, so do your expenses and the number of people who need to spend. Using their own personal cards should be a thing of the past — it creates more faff for them and more admin for your finance teams.

    By giving each budget holder access to their own company card, they’ll never await a reimbursement again and instead spend the company’s money directly. Plus, your finance teams won’t be drowning under a pile of receipts.

    But don’t worry, just because they have a company card doesn’t mean they can run wild. In fact, having an expense card means it’s easier to keep tabs on what they’re spending. Employees have no choice but to adhere to the spending policies you put in place.

    At Payhawk, our spend policies allow you to keep spending under close control while giving all budget holders the freedom to spend within a framework. Pretty neat.

    Keep on top of multiple business subscriptions

    How many business subscriptions do you have, and how many of them are being fully utilised? Managing all accounts payable from a centralised location means you can oversee recurring payments across all departments and pinpoint subscriptions no longer used.

    As your organisation grows, the spending can easily become more prolific, and keeping track of which departments have which subscriptions can help you identify unnecessary or duplicate business subscriptions.

    Automating this process means less time wasted by your finance teams — instead, they can quickly detect overspending, eliminate cost creep, and uncover hidden costs.

    Limit admin burden

    The administrative burden put on financial teams is the old way of doing things — wasting time that could otherwise be spent on driving strategic business decisions and making all departments run smoothly.

    It’s clear that finance teams must focus on driving these efficiencies within the business and supporting departments in any way they can. This enables them to focus on the ultimate goal of scaling the business. But to free them up to add value, they need access to the right tools — technology and integrations, which is something your current expense management process cannot deliver.

    The good news is, software can remove this burden by automating repetitive tasks, such as collecting receipts, matching spend, and setting individual expense card limits.

    You can create different spending hierarchies

    Not everyone needs access to the same monthly budget — that’s why, with Payhawk, you can build various card policies for different hierarchies in the organisation or across different teams.

    Effortlessly set bulk card and monthly recurring limits and decide who can make ATM cash withdrawals from the same dashboard. These features are particularly useful as your organisation grows. No one has time to manage individual card budgets as your employee count reaches the thousands.

    Segment your teams by those who travel and require set monthly budgets, or allocate a recurring monthly budget to your marketing team. Analyse in real-time whether allocations are being met and freeze cards instantly if you spot suspicious ‘out of policy’ activity.

    Once your spend policies are set up, you can let them run automatically, which means saying goodbye to ambiguous spend reporting and hello to clearer money management. All while embracing proactive controls and governance and the benefits of bulk card and spend policy management.

    Create custom approval rules

    With Payhawk, there’s no delay when it comes to in-policy spending. You can create approval workflows to help manage your organisational structure, regardless of how complex your spend policies are.

    Setting custom approval rules means the right people can easily oversee spending when necessary. Add team leaders to the approval workflows to spread accountability and remove the burden from just one person when it comes to spending approval.

    Payhawk approval workflows can help support your business as it continues to grow, regardless of company or spend policy structure. You need software that’s there for your business as you set out to achieve ultimate spend visibility and flexibility in expense management.

    To sum up

    Choosing the right expense cards might seem trivial, but different types of expense cards come with different benefits. Finding the expense management card that suits your operational structure while delivering a seamless experience for all users — amongst your finance teams and budget holders is essential.

    And once you've decided on the type of expense card that suits your needs best, you need to ensure that it comes with expense management software. The supporting tech will enable you to analyse and manage company spend effortlessly.

    Without a deeper insight into who spends what, you can’t accurately predict cash flow, and you’ll never have a hold on company finances. Add to that the problems employees face with archaic expense management processes — software really can be the saving grace.

    Empower employees to spend effectively within a framework, empower team leaders to take accountability for team spending, and empower finance teams to let go of tedious manual tasks and embrace the future of automation.

    Book a demo to learn how Payhawk can help your organisation bulk manage spend policies and improve corporate card management.

    Trish Toovey - Content Director at Payhawk - The financial system of tomorrow
    Trish Toovey
    Senior Content Manager

    Trish Toovey works across the UK and US markets to craft content at Payhawk. Covering anything from ad copy to video scripting, Trish leans on a super varied background in copy and content creation for the finance, fashion, and travel industries.

    See all articles by Trish →
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