How Small Businesses Can Benefit From Business Expense Cards
- Written by: NewsServices.com
Your expense management strategy might be good enough for your current needs, but it can certainly be better. One of the best ways to improve your spend management process is to integrate business expense cards.
As its name implies, a business expense card is a debit, prepaid, or in some cases, a credit card that works similarly to a traditional business credit card, except with a few differences.
In contrast, a business credit card is a card that bills any expenditures made with it to a primary card. That primary card is usually where the business funds are stored. So, when one employee spends USD$100 on supplies, and another spends USD$10 to get a ride, the primary card will incur a USD$110 expenditure. Put simply, employees share a single bank account.
Though corporate credit cards are helpful, they come with disadvantages, such as inefficiency. Not all employees will carry one. It’s usually management that does, like the CEO, office manager, and team leaders.
When an employee needs to pay for something, they’ll have to make a request to management. After paying, they submit the receipt to the manager or finance team. The finance team will then make a manual record of who paid and why and who authorized the payment. SMS is sent to someone who will approve a payment.
However, the problem is that management is generally too busy to oversee payments properly. Chances are they’ll just hand over the card, expecting employees to follow the company expense policy. This can get confusing and messy at some point, leading to expense mismanagement.
Thus, if you want to have control over spending, you can go for business expense cards or virtual corporate cards from a subscription service like Weel. Unlike credit cards, business expense cards offer limits, allow you to view real-time data about expenditures made, and come with management software or an application.
While some may argue that they’re ideal only for corporations, they’re not. They’re also a reliable spend management tool for small businesses.
- 1. Setting And Adjusting Limits
Using the spend management platform, you can put and adjust limits on your employee’s expense cards accordingly. That means no more overspending, which is a common occurrence with business credit cards.
Furthermore, since each card has a limit, you can allow selected employees to spend more than others. Your office managers, for example, should be able to spend more than a receptionist.
- 2. Reducing Downtime Due To Insufficient Funds
Though it’s practical to adjust limits to business expense cards, it can sometimes cause issues. For instance, you may set the limit too low, so an employee may not be able to complete certain transactions. Additionally, they might not have enough funds.
Insufficient funds can cause downtime, which is especially damaging if the transaction is important or urgent. Business expense cards can prevent this kind of problem.
In the event that an employee is unable to make a transaction due to a low limit or insufficient funds, they can simply call management to make adjustments. Through the platform, management can easily top up their business expense card or increase the limit.
- 3. Monitoring Payments In Real Time
If you’ve always relied on traditional credit cards for business expenses, there’s a good chance you’re familiar with mystery payments. These are basically expenses on your credit card bill that you aren’t aware of. Legitimate or not, they can cause stress since you’re unable to determine where your business budget is going. A business expense card can help in this regard.
With the corresponding software of your business expense card, you’re able to get detailed information about each transaction. Hence, you no longer have to worry about mystery payments.
Once you get your business credit card bill, you’ll know what each expense corresponds to. In addition, if the information you see on the platform isn’t enough, you can refer to the receipts. The platform allows employees to capture snapshots of receipts, and these images will be compiled into the platform. With these features, expense record-keeping will become easier.
- 4. Issuing Virtual Cards
Nowadays, it’s vital that employees hold virtual corporate cards, which are designed for digital purchases or expenses. These cards let you buy items online, make payments to subscriptions, and perform other online transactions.
Once you register an account with a subscription service, you can issue multiple virtual corporate cards and gain access on the same day.
- 5. Establishing An Approval Flow
To avoid financial blunders, an approval of the expenditure is necessary. And business expense cards boast this feature. With their software, you can set up an approval flow to ensure any major expenses go through you first.
Closing Thoughts
Spend management is a significant part of a business. Unfortunately, some people have the misconception that what works for large corporations may not work for small businesses.
Daily Bulletin
