It's surprising, but many organizations can't control their business spending. These companies fully understand how vital spend management is. But, because they don't have a good view of their spending, they simply can't monitor it. Often, large companies find themselves dealing with legacy tools and processes that don't give them complete visibility on spend. While smaller or growing companies pick up multiple tools to help them and end up with a disconnected view.
Business spend management with added clarity
Getting clear spend visibility starts with the way your business spends. If your company uses cash, you can't automate expenses, and you can't keep track of the spend very easily. Plus, each month ends with chasing receipts, trying to match them up with spend, and drowning in paper. Corporate cards can change all of this. Whether physical, virtual or connected to your employees’ digital wallet. Company cards and supporting software can give your business access to real-time spend data and better control via built-in spend compliance.
Company cards make sense. But, there are different options out there, so which card will work best for your company? Here's a brief rundown of each type of card.
Company cards: Debit cards
For a few good reasons, debit cards are often the number one choice for company cards. Here are just a handful of the pros and cons:
- Debit cards are quicker to issue. Your employees can be using them within days (even instantly for a virtual debit card)
- If you were one of our customers at Payhawk, you could set the limit for a debit card so that your employees don't overspend with company funds. And, by setting limits across your company cards, you'll have a good idea of what the spend will be ahead of time to support planning and cashflow
- The major disadvantage is that debit cards can run out of funds. But, if your employee is using our company cards and software, they can simply complete a fund request via the app and quickly receive more funds.
Corporate credit cards
The corporate credit card allows employees to make business payments when they need to use a credit line. Credit cards enable your company to use money belonging to the bank and pay it back later with a bit of interest. Using a credit card means the following:
- Your business may be able to spread payments over an extended period, rather than all at once
- If your employee has an unplanned expense that is over the threshold of the pre-loaded card, they will not be left out of pocket as the line of credit will cover it
- Your finance team will not have to worry about reimbursements
- Your finance team has good visibility over the spend if it's connected to payments and expensing software like ours at Payhawk
- Budget owners can set spend limits as necessary
- The biggest negative is interest, but companies can choose to pay off the credit cards regularly to avoid charges.
- It's not your company's money. So you can juggle the cash flow around what you have in the business vs what's going out to pay back the funds on credit cards.
Prepaid cards work kind of like electronic wallets. Companies can send money to them, and employees can use them as they need.
- Your business can top up the prepaid card as required
- Employees can only spend the money on the card
- Prepaid cards have a limited use generally as they aren't accepted everywhere your employees might need to pay (on Google for ads, for example) and sometimes can’t be used at ATMs
- Prepaid cards are most commonly gift cards which means your teams can only use them in a limited number of places
- You may have to pay a fee - and sometimes extra hidden fees - to the card issuer as you don't pay interest. At Payhawk, we're completely transparent about how much you'll pay. Check out our hidden fees calculator to see how much you might be spending on foreign payments.)
- You can issue prepaid cards for indefinite usage. This action lets employees treat them as a regular corporate card used for business expenses. And providing you're working with the right provider; your employees should be able to manage their cards through a connected app too.
One type of company card will fit your business better than another, depending on the size and stage of your organization. But success, just like in your PC theme park, is going to come down to understanding your spend. Learn how we helped German automotive chain ATU take control of their spending, including getting full transparency and a super positive employee buy-in.