Corporate credit cards are a great tool for streamlining business spending and managing cash flow. However, they can lead to potential misuse without a sound credit card policy. Your policy should outline how your team can use the cards, who is eligible for what, and how your business will monitor any spend.
Effective business expense management is crucial for maintaining financial stability and maximising profitability. A well-crafted business credit card policy can provide the framework for companies to control their expenditures and ensure responsible spending practices.
A corporate credit card policy is a set of rules that outlines the dos and don'ts of using business credit cards within an organisation. It governs all the rules and regulations under which employees can use business credit cards to pay for business expenses.
Usually, a sound credit card spend policy will include information such as:
The policy aims to ensure that all employees understand their responsibilities when it comes to using the company's credit card and protect the company from any potential misuse of funds (such as buying personal items using a corporate credit card).
A clear policy helps set expectations around the proper use of business credit cards, which can help reduce fraud or misuse within an organisation.
Consider including these ten elements when designing a sound corporate card policy:
Creating your corporate card policy doesn't have to be complicated. And for many businesses, setting an effective card policy (and achieving better spending control using corporate cards) starts with these four steps:
Once you've nailed these four important steps, you'll have all the information you need to set up and distribute corporate credit cards to your relevant teams and individuals.
A comprehensive corporate credit card policy is integral to maintaining financial control within an organisation. Your policy should clearly define eligibility criteria for card issuance, set spending limits, and outline permissible expense categories. It's crucial to establish transparent procedures for submitting and approving expenses and strict protocols for reporting lost or stolen cards.
You should conduct regular interviews to ensure compliance and identify any misuse. Most importantly, communicate the consequences for policy violations clearly. By incorporating these elements, companies can foster responsible spending practices, minimise financial risks, and ensure that corporate credit cards are used effectively and ethically.
Here's a bullet-point summary of the key elements of an effective business credit card policy:
Implementing best corporate card policy practices is essential to maintain financial control and ensure compliance within your organisation. Here are some of the best methods to consider:
Take some time to create a comprehensive business credit card policy explicitly tailored to your organisation's needs. This work will save you from any headaches if issues arise, including improper use of cards, employee or vendor overspending, and human error.
Once you have your policy, it's time to bring in the experts, as your corporate card policies will only be effective if your team adopts them. Using a corporate spend management platform lets you automate a good chunk of work, from card issuance and controls to reporting and accounting system reconciliation.
With Payhawk, for example, the corporate cards and connected software mean that your spend policy is built right into the tool employees use to pay. This means that employees can stay compliant more easily and don't have to search around for their company's rules and regulations.
Payhawk customer Mercell explained how crucial built-in spend policies are to their business. Now, the finance team can effectively encourage compliance to company-wide regulations by implementing widespread policy adjustments.
Leon Steenbrink, CFO at Mercell Nederland explained:
My favourite feature is having the ability to assign spend policies to employees. I like it because it empowers employees to perform their job functions without having to ask for permission to spend money that they have already budgeted.
Ready to learn more about setting spend policies and controlling spend? Book a demo today.
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.