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 maximizing profitability. A well-crafted corporate 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 for using corporate credit cards within an organization. It governs all the rules and regulations under which employees can use corporate credit cards to pay for business expenses.
Usually, a sound corporate card 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 corporate credit cards, which can help reduce fraud or misuse within an organization.
Consider including these ten elements when designing a sound corporate credit card policy:
Creating your corporate credit 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 essential steps, you'll have all the information you need to set up and distribute corporate credit cards to your relevant teams and individuals.
Take some time now to create a comprehensive corporate credit card policy explicitly tailored to your organization's needs. This work will save you from any headaches if issues arise related to improper use of cards, overspending by employees or vendors, and human error.
Plus, consider bringing 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 spend policy is built into the tool employees use to pay. This means that employees can stay compliant more quickly 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 favorite feature is having the ability to assign spend policies to employees. I like it because it empowers employees to perform their job function 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.