Financial Tools Businesses Use to Save Money
In a business environment where companies are constantly seeking ways to use their resources to the optimum level, what businesses end up investing in are tools and strategies that help you save time and money or help you gain time and money.
Employee expense cards are one such tool that is quickly spreading across markets, within different industries, and in all types of businesses. These cards are a lifesaver for finance teams to distribute and control business budgets and at the same time give employees the flexibility to make business expenses without having to use personal funds.
What Are Employee Expense Cards?
An employee expense card is a type of payment card that is issued by a company for its employees to make business-related purchases. These cards can be debit, credit, prepaid or pre-funded cards. When a business wants to move away from the tedious process of settling reimbursements, they tend to look for better options such as these cards.
These are also synonymous with corporate cards that can be physical or virtual in nature. A physical expense card helps employees manage all their on-ground purchases that need to be done in person. Virtual cards help employees make online expenses in a much safer and more secure manner.
How Do Employee Expense Cards Work?
On a technical level, an employee expense card works similarly to any other type of payment card. But where these cards stand out from the rest is that you can issue individual cards for each employee. Previously, a business owner had to issue a credit card in their name or their company’s name and pass it around from one employee to another for business expenses.
These employee credit card expenses were hard to track in the sense that you didn’t know who was making the payments at all times. This could lead to confusion and a lack of accountability. And since there was only one card, every employee had to wait and coordinate with team members to get the chance to complete their purchases.
With employee expense cards, all these problems are solved as now you get to issue individual cards for each employee that they are accountable for. Just like credit and debit cards have a spending limit, these corporate cards also give you the option to set custom spending limits. The best part is that these limits and restrictions can be modified and adjusted as per your needs through the expense management system that these cards are linked to.
How is Employee Expense Card Saving Money for Businesses?
- Lower risk and errors – The purchases made through expense cards are automatically tracked in real-time and recorded in the expense management system that it is linked to. This eliminates the need for manual data entry in processing reimbursements. Even a small error in entering the data from expense reports can cause a huge loss to businesses and time spent rectifying them. Ultimately, expense cards reduce the risk of errors and fraud.
- Control over expenses – Using modern financial tools like employee expense cards gives you a lot of flexibility and control over how they are used. If the card provider gives you debit/prepaid cards, then by default you don’t need to worry about employees overspending. But even when a provider offers credit corporate cards, you still have the ability to set custom spending limits for each card that you issue, be it physical or virtual cards.
- Discounts and cashback rewards – Another way these cards help your business save money is through the various discounts and cashback rewards that they offer on purchases. The expense card providers set up beneficial cashback percentages so that you can earn money as you spend more. They are also aware of the different types of expenses each business needs to make; with this information, they partner with companies that are likely to be your vendors to create partnership deals and let you get your vendor’s services at a discounted rate.
- Low to no transaction fees – Expense cards generally have very low to almost no transaction fees associated with them as they function on better digital infrastructure as compared to traditional cards. Some providers may also offer really low markup fees and FX charges for international transactions that help your business save money when making payments to vendors or suppliers in different countries.
- Insights and data on employee spending habits – Since each transaction that occurs through an expense card is recorded in real-time on an expense management system, you get complete visibility and access to data on all the spending behavior of your employees and teams. This data can easily be interpreted through the system in the form of useful insights that helps you to make better strategic financial decisions and improve processes or implement tactics to save money.
What to Look for When Choosing an Employee Expense Card?
- Fees and costs – When looking to get employee expense cards for your business, you should consider the different fees and costs associated with implementing this financial tool across the company. Some providers might charge you fees on a monthly, quarterly, or annual basis to use their expense management ecosystem along with the cards.
- Rewards and perks – See whether the cashback program that a card provider has makes sense for your business or not. Also, check the perks you get with choosing a particular card vendor over others. Do not simply choose the provider that has the most amount of partnerships. Select the one that has partnerships with companies/tools that your business uses frequently to save the most money possible.
- Security and fraud protection – When it comes to financial matters, always check how robust a company’s security protocols are. They must have a stringent security system in place to make sure that your financial data is safe from any attempts of online fraud.
- Integration with your business management and accounting systems – The spend management systems that an expense card is linked to should be capable of integrating with other business systems that you may use such as ERP, HRMS, and accounting software. Having these integrated systems can help you process salaries faster and also close your general ledger efficiently.
- Support and customer service – If there’s any issue with the expense cards being used by your company, you should have access to prompt support and customer service from the card provider to resolve the issue as quickly as possible. Another sign of good customer service is that the company takes feedback from its customers to improve the product and cater to your specific needs.
Get Employee Expense Cards Today!
When it comes to managing employee business expenses, there’s honestly no better solution than expense cards at the moment. So if you’re looking for the best possible way to save money for your company and also optimize the way your teams spend their budgets, then you should look no further than getting corporate cards.