Jul 17, 2020
5 mins read

Corporate Credit Card or Expense Reimbursement? The Pros and Cons.

Expense Management
Quick summary

Expense reimbursement has been the default way to manage company expenditure for a long time. Although it has its benefits, the increase and democratization of spending among companies led to the introduction of the corporate credit card. Nowadays, organizations, whether large or small, use both methods. The question is, which of those is right for your business, and are there any alternatives?

Table of Contents

    When making a choice about managing your company expenses, it's essential to identify your priorities and make a proper risk assesment when it comes to each option. That is why we created a comparison of the business credit card and the expense reimbursement that takes all essential factors into account.

    Advantages of a corporate credit card


    When an employee goes on a business trip, the company covers all travel expenses. If the firm relies on reimbursement management, however, employees would have to not only account for every expense they make but also make sure they have enough funds to cover their expenditure. Recent data indicates that businesses spend roughly $1,425 for every employee they send on a business trip. This makes expense reimbursement unreliable since an individual is far more likely to run out of funds.

    Instead, using a corporate card allows individuals to rely on company money. At the end of the day, it is much more convenient when people do not have to worry about having insufficient funds to pay for their night stay.


    Another advantage of the corporate card is that it saves time that usually goes for the tedious reimbursement process. The bigger the company, the more time consuming it will be to double-check each expense report and pay back each employee. Companies can easily avoid the draining of internal resources to process reimbursement and reporting by introducing a corporate card. They will get all statements directly to an accountant vs the cardholder. Moreover, by empowering employees to use company funds, the firms have removed the need for paying back employees altogether.

    Monitoring spend

    Issuing corporate cards for employees allows businesses to easily track spending. For example, there are companies that use virtual cards to pay in all major Ads platforms such as Facebook, Google, Yahoo, Bing, and others. Since employees are using company funds, managers can easily track campaign expenditure with a budget and spend limits on each card. See how Payhawk clients use our product to manage their advertising spend.

    Improve spend visibility & control with Payhawk corporate cards

    Why do some companies stick to expense reimbursement?

    The corporate card seems like an attractive option, but why isn't everyone carrying a business card then?

    Lack of trust

    People are far more likely to trust something that they can control. The reality is that companies are afraid to let employees using company cards because they don't trust individuals to comply with the company’s spending policies. Expense reimbursement, on the other hand, ensures that every expense is approved in advance. Payhawk ensures that employees comply with spend policies without using expense reimbursement.

    Lower capital risk

    If your company relies on reimbursement, that means that it is far more unlikely to overspend. When employees' wallets are the primary source of spending, they are far more unlikely to indulge in spending or cross the line between personal and business expenses. Using out of pocket money also avoids the risk of a stolen corporate card, which is another threat to any business. Just for 2019, the value of annual "Lost or Stolen" fraud losses on UK-issued debit and credit cards was 100 million GBP. On the other hand, if an employee loses their personal credit card, this will not harm the business in any way.

    The other capital risk when using a corporate credit card is the accumulation of debt & fees. When you think of interest rate, annual fees, and foreign transaction fees that most banks charge, this is another extra baggage that companies have to carry. See what hidden fees your bank might be charging your business.


    One of the common mistakes that companies make is sharing a corporate card among several individuals. This is done so that the company does not pay for additional cards. The problem is that in these scenarios, companies don't have a way of proving who is the one spending. On the other hand, out-of-pocket expenses are always coming from an individual, which removes the ambiguity aspect of a shared card.

    Payhawk - Best of Both Worlds

    Fortunately, there is an alternative that combines the advantages of both options.

    With Payhawk, your company will have access to corporate debit cards paired with expense management software. Here's how we fit into the comparison:

    • Each of our cards is tied to a business spending policy that ensures the necessary control measures. Overspending is not a part of the equation.
    • Payhawk is a reliable option for travelers since it allows individuals to request funds directly from our mobile application.
    • Payhawk saves time that is typically spent on doing expense reports, matching expenses, and keeping track of spending.
    • Every card is issued to an employee that is solely responsible for its usage. With Payhawk, you can add an additional cardholder for just 1 euro.
    • We still offer the option for expense reimbursement directly from our platform.
    • You can automate outstanding bill payments and pay reimbursements owed to employees with SEPA transfers directly from Payhawk.

    Interested in the right expense management solution for your business? Ask your questions anytime HERE or schedule a demo with the team.

    Boris Angelov - Principal Product Manager at Payhawk - the spend management solution of tomorrow.
    Boris Angelov
    Principal Product Manager

    Boris has a diverse product background from launching finance products to bringing payment programs to life. He is currently leading the Spend Controls product area focusing on enterprise features that bring visibility and control to finance teams.

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