Corporate Card Management: Guide for 2023
The realities of the modern business world require companies to keep a tight hold on their spend management.
We’re not just talking about how you track expenses or reconcile your debts; that’s basic stuff. No, we’re talking about the entire process, from deciding who has the spend rights to analyzing how business spending affects your cash flow and taxes.
The more your business expands, the more crucial (and complex) your expense management process becomes. Spending analysis allows you to correct imbalances, watch for fraud and employee theft, and prepare for regulatory filings.
However, it’s also a cumbersome, time-consuming process that, without the use of the proper platform, requires quite a bit of man-hours to complete.
Modern spend and card management needs to be more sophisticated, intuitive, and built on the needs of finance teams, accountants, CFOs, owners, and employees!
That’s why, at Pluto, we firmly believe in the power of proper corporate card management. Establishing clear policies, outlining appropriate spending limits, and designing airtight analysis protocols can keep your finances in check.
Modern Corporate Credit Card Programs
Traditionally, businesses relied on employee reimbursement for out-of-pocket expenses to facilitate team and department spending. While using employees to frontload business costs helps with float, it also creates potential hardships and liabilities.
Moreover, the process of submitting, reimbursing, and properly cataloging expenses is grotesquely time-consuming for your finance team.
In part, corporate credit cards were designed to take the pressure off corporate finance teams. They make expense management easier, simplify spending procedures, and digitize the bulk of your spending.
Managing corporate credit cards can get quite complex. Adding new cardholders, suspending or closing accounts, or untangling business and personal expenses could take hours of paperwork and phone calls.
But it does not have to be like that. At Pluto, we leveraged our corporate experience, had countless talks with our users, and came up with solutions to every bottleneck of card management.
On-demand corporate cards
For employees to be able to make business expenses, they will need a corporate p card. In our day and age, most of their spending will be online.
Pluto provides you with an unlimited number of virtual cards that can be easily issued right from the dashboard.
If a physical card is needed, you will go through the same simple process, and the card will be delivered to you in just a couple of days.
Receipt Capture and Expense Tracking
Corporate credit cards feed your business expenses into a centralized monthly report. With Pluto, submitting a receipt is as easy as taking a picture with your phone, literally.
When the expense is submitted, it is immediately reflected in the account report.
These reports provide each department head and finance team with the visibility needed to:
- Link credit card transactions to the right employee
- Crackdown on overspending
- Maintain business-wide cashflows
- Maximize efficiency
With Pluto, you can easily filter through various expenses, check which expenses are still pending, and see the details of that particular spending team-wide.
Corporate cards also provide businesses with the flexibility to take the approach that suits their needs. For instance, your business may assign corporate cards only to key employees and management or traveling employees.
Workers who make only occasional purchases can use Pluto virtual or pre-loaded cards with one-time or limited spend codes.
Ultimately: More Control
Aside from these perks, company credit cards allow you to maximize your data collection and improve your analytics.
You can use this information to curb unnecessary spending, generate insights, and even negotiate better rates with vendors.
But without a proper corporate card management program in place, it’s all too easy for the system to turn upside-down.
What is Corporate Card Management, and Why is it Important?
A corporate card management platform allows business leaders to proactively wrangle company expenditure concerns from multiple fronts.
But to keep everything running smoothly, you also need a well-designed corporate card policy that ensures you are not limiting employees in their work while you are tracking the expenses.
Using corporate cards for operational expenses allows your team to work more efficiently—no more complicated approval processes when buying an online subscription or plane tickets.
But to achieve the balance between flexibility and control, you must have a corporate card management policy. Good corporate card programs:
- Outline rules for use, such as where and how much employees may spend.
- Capitalize on issuer-provided controls to set spending limits.
- Monitor and analyze employee cash flow to minimize inefficiencies.
- Are quick to catch or counteract employee or outside fraud.
- Simplify real-time expense reporting.
- Save time and money by reducing or eliminating physical paperwork.
Above all, a responsible management program frees up resources, putting money back on your balance sheet.
Best Practices for Efficient Corporate Credit Card Management
The key to managing corporate cards successfully is setting expectations, communicating responsibilities, and setting controls for employee and employer accountability.
Whether you set card limits, lock and unlock cards, issue virtual cards, or code and track expenditures daily is up to you.
Just as long as you design a system that balances control and comfort.
Set Up a Corporate Card Policy
Your company policy should:
- Set expectations and communicate cardholder responsibilities
- Lay out eligibility requirements to receive a card
- Set spend limits for teams, departments, or specific expenditures
- Outline the process for submitting receipts
- Establish clear review and penalty processes for violating these rules
Written properly, your policy should ensure everyone understands their rights and responsibilities.
Decide Which Employees Will Get Cards
One of the most important components of managing your corporate cards is deciding who receives them.
At first, you may want to stick with assigning cards to upper-level management or department heads. But as your business grows, you may enact policies to permit other employees to receive cards conditionally or permanently, such as your sales team.
Ensuring your cards are in the right hands for the right reasons gives your employees a sense of flexibility and responsibility.
Consider Virtual Cards
You might consider issuing virtual cards when an employee may need one-time or limited access to a corporate card.
With Pluto cards, you can issue unlimited virtual cards in a matter of minutes and set spending limits as needed.
So the time from the employee request to delivering the virtual card credentials is minimal.
Set Budgets for Each Team and Department
Clear budgets take the guesswork out of reconciling your expenses and provide a “pool” of funds for teams to pull from.
These controls can help curb spending while still providing the funds your business needs to succeed.
Separate Personal and Corporate Expenses
When you design your budgets, it’s crucial to ensure employees know what constitutes a business expense and what doesn’t.
For instance, some companies provide generous food allotments for traveling employees, while others limit corporate card spending to hotel and transportation expenses. In this instance, employees purchasing their own meals would qualify as a personal expense.
You also want to clarify that employees can’t use their company cards for personal expenses that don’t relate to business. Even if they plan to repay you, it must be clear that the corporate card can not be used for these matters.
Have Limits on Cards and Spending Categories
Another way to crack down on corporate card expenses is by setting limits. With Pluto you can set limits when creating a new card, or adjust the limits on the go.
Review these limits regularly to make sure that everyone has limits that are sufficient to support them in their work.
Make Expense Reporting Simple
The card expense reporting process shouldn’t take you hours. Submitting an expense in Pluto is a matter of just a couple of clicks.
Drag and drop the receipt into Pluto, add a couple of details and that is it. This efficiency ensures that employees submit all their expenses on time.
Document Every Purchase – Digitize Receipt Management
When it comes to your expense policy, your corporate credit card statement isn’t reliable enough.
Mandating receipt uploads means that you can verify the accuracy of each transaction for internal and tax-related purposes.
But in the modern world, many vendors are moving away from physical receipts that tear, smudge, or blow away in the wind.
For these instances, consider setting up a corporate email address to provide all-digital vendors.
And for expenses that do generate physical receipts - Pluto allows you to simply take a picture of the receipt with your phone and upload it to the expense management system!
Monitor Employee Spending Habits
One enormous benefit of corporate cards is the sheer transparency involved.
Every transaction is recorded and automatically categorized, allowing you to monitor corporate card expenses using credit card statements. You can also use this information to identify overindulgent employees and limit any unscrupulous spending habits.
But don’t just wait for the statements to show up monthly. Pluto allows you to proactively set alerts, notifications, and monitor transaction activity, helping you catch problems before they snowball, such as “double-dipping.” (Submitting the same expense twice, by mistake or intent.)
Analyze Expense Reports Regularly
Another facet of corporate card expense reporting is regularly analyzing your reports.
With Pluto, businesses can sort expenditures by vendor, department, employee, or internal expense codes.
Sorting and analyzing your expense reports ensures that even if you have dozens of cards floating around, you can readily monitor and manage the ins and outs.
Integrate with Your Accounting Software
The best way to unlock your corporate cards’ potential is by integrating expense software with your accounting software.
Doing so feeds each corporate credit card expense right into your accounting log, saving hundreds of hours entering, verifying, and double-checking that your corporate card statements match actual business expenses.
Pluto allows you to integrate with all major accounting software.
- Efficient corporate card management requires you to use a platform that will allow you to have complete spend control and flexibility.
- This is where Pluto comes in – our platform provides you with all the features and tools necessary to fully manage your corporate card spending.
- A corporate card usage policy is another critical element to keeping spending under control – by setting clear guidelines on what can and cannot be purchased with corporate cards, you can avoid unnecessary expenses.
- Finally, effective communication and training for employees will ensure that everyone is on the same page when it comes to using corporate cards responsibly.
Corporate Cards FAQs
What is a Corporate Card Program?
A corporate card program issues cards to – and establishes rules for – employees who make purchases for a business.
These purchases can range from buying office supplies to airline tickets. Corporate card programs set guidelines for who can use a card, their spend allowance, and the expense reporting process, among other facets.
What is the Advantage of a Corporate Card?
Corporate credit cards offer multiple advantages, including:
- Eliminating cumbersome reimbursement programs
- Centralizing your expense management system
- Integrating expense tracking features to simplify taxes
- Restricting employee spend based on spend limits, vendors, or products
- Reducing potential delays in the reconciliation process
Plus, many corporate cards connect to accounting software to allow businesses to slash time and hours wasted on expense report management.
What is Corporate Card Expense Management?
Expense management refers to the systems that organizations use to track, review, and pay for business and employee expenses.
Keeping expense management processes tightly controlled ensures that businesses can reconcile their balance sheets.
These expenses include any purchases an employee makes to improve the business, from office supplies to business travel costs.
Often, modern expense reports reflect tons of digital items too, like subscriptions and cloud space.
What is Corporate Card Reconciliation?
The corporate card reconciliation process verifies that corporate card statements match a company’s general ledger.
Businesses rely on these processes to validate transactions, keep expenses reasonable, and prevent fraud. (Not to mention, reconciling the books is essential - come tax time.)
With reports that Pluto generates, the work is minimal. You issue corporate cards, put limits on them, and all the receipts and transactions are stored in the Reimbursement report.
Who is Responsible for a Company Credit Card?
From a legal and liability standpoint, employers and businesses are responsible for all expenses charged to a corporate credit card.
That said, businesses may outline use cases in which an employee is responsible for repaying their own charges, such as when they make personal purchases on their employer’s dime.
Find out how much your business can save with Pluto
Discover your savings with Pluto's Cost Saving Calculator and take control of your expenses. Unlock cost-efficiency now!Calculate Now
Learn how Pluto is helping Keyper to eliminate petty cash spending and optimize spend managementRead More
At Pluto Card, our mission is to assist businesses of all scales make well-informed choices. To uphold our standards, we follow editorial guidelines to guarantee that our content consistently aligns with our high-quality benchmarks.
STOP Wasting Time & Money
Let Pluto do all the heavy lifting, so your team can focus on things that actually matter and add to your bottom-line. A 15-minute call will be enough for us to show you how Pluto can help.
You may also be interested
Efficient Receipt Management For UAE Businesses
Collecting, storing, and otherwise managing receipts is essential to a well-oiled expense reporting machine.
Each receipt serves as confirmation of payment processing between yourself and the customer or vendor. You also need expense and sales receipts to file taxes and maintain your peace of mind.
Unfortunately, while saying receipt management is easy, the whole process itself is daunting. Tracking hundreds, thousands, even millions of employee and customer receipts leaves loopholes for fraud and misreporting.
Physical expense receipts are especially susceptible to being lost, damaged, or fading with time.
Fortunately, there’s a better way to do it: digital receipt management with Pluto.
- Automate more of the expense management process
- Reduce the risk of fraud and inaccuracies
- Create more efficient workflows and financial departments
- And overall streamline modern business operations
While you probably can’t eliminate 100% of paper receipts from your workday, you can still improve your process with an increasingly-digital footprint!
What is Receipt Management and Why Do You Need It?
Receipt management is the process of collecting, tracking, and storing business receipts.
Traditionally, receipt management is handled by internal finance teams. These employees collect various receipts, track costs in your accounting software, and store them for later. If necessary, the accounting team will also manually sort each expense.
A well-run protocol helps businesses:
- Simplify employee reimbursement programs
- Track and report tax deductions
- Provide proper proof during a tax audit
- Streamline expense reports and budgets
- Combat internal fraud and inauthentic chargebacks
- Avoid eating repair or replacement costs for items under warranty
- Calculate and improve long-term profitability
But there isn’t just one kind of receipt management system. Today, businesses have to wrestle with printed receipts, e-receipts, and even (gah!) handwritten receipts.
The mix is frustrating for businesses that have to follow several procedures just to reconcile the books.
Difficulties of Manual Receipt Management
Today, there are three basic ways to handle receipts directly:
- Manual receipt management involves handling, tracking, and storing paper receipts
- Digitization receipt management scans physical receipts to digitize the tracking process
- Digital-only receipt management is used for online or digitally generated receipts
While many businesses are moving toward digitization and digital-only receipts, some businesses are stuck in the dark ages. (The kind that involves typing physical receipt information into a digital spreadsheet.)
And as we’ll see below, manual entry strategies come with some…problems.
Easily Lost or Damaged Receipts
Perhaps the most obvious problem with physically tracking expense receipts is that there’s so much that can go wrong. Lost, damaged, or faded receipts make the business expense tracking process that much harder.
Even if the employee who spent the money doesn’t drop their receipt, it’s possible for paperwork to get lost on a desk somewhere. And if you need to find a receipt two years later? Better hope it was filed properly and hasn’t faded completely.
Consumes Human Resources
Manual receipt management is an extremely hours-intensive process.
Your financial team has to collect invoices, type their data into your accounting software, and double-check their work. Then, they have to reconcile business expenses against company credit card statements and track down potential instances of fraud or misreporting.
Not only does this require a lot of time, but it also impacts employee productivity. Every hour an accountant spends tracking receipts is an hour of productivity lost elsewhere.
Leaves Room for Human Error
Aside from the time and human resource cost, manual receipt management presents the potential for human error. And unlike on the product line or in customer service, every reporting mistake risks an unfavorable tax audit.
Even the simplest receipt management and tracking process involves several steps from collection to reconciliation. Every stage is an opportunity for an employee to get distracted, mistype a name or number, or duplicate entries. In bigger cases, they might even duplicate a payment, costing you more money.
And even if you catch the mistakes before they’re submitted, that’s more human hours wasted double-checking and correcting completed work.
Increases Fraud and Misreporting Risk
The risk of fraud is higher in manual receipt management programs, and instances of fraud may be harder to detect. Types of fraud that commonly crop up in expense reporting include:
- Inflated claim amounts
- Claiming personal costs on the business’ dime
- Submitting expense reports twice
- Falsifying “proof” to claim for money that wasn’t spent
Unfortunately, manual receipt management makes these kinds of fraud more likely and difficult to catch. For example, if the employee who authenticates receipts is committing or permitting the fraud, it’s harder to detect until after you’ve lost money.
Over time, even small acts of fraud can have massive financial consequences.
Contributes to Employee Dissatisfaction
For many companies, employee reimbursement programs contribute both to the need for manual receipt management – and to employee dissatisfaction.
Think about it. In a modern, tech-savvy business world, why should employees have to pay out of pocket, ever?
Virtual cards and online-based businesses have all but eliminated the need for an employee to front your expenses.
But if you’re still stuck doing manual receipt management, chances are, your employees are still submitting reimbursement tickets. (And grumbling about the time it takes to get paid back.)
And that’s not even touching on the frustration, tedium, and headaches manual receipt management programs cause your high-paid finance teams.
Jacks Up Business Costs
Together, all these factors paint a picture of increased business costs.
The time and human resource cost to track, reconcile, and store receipts.
The human and financial cost of detecting and counteracting fraud.
Even the maintenance costs for your printer and filing cabinets.
Every dollar spent on manual receipt management is a dollar sucked from office parties, growth, or your bottom line.
Benefits of Digital Receipt Management
It’s easy to see the costs that manual receipt management impose. Fortunately, there’s a simple solution: digital receipt management.
In short, digital receipt management involves using digital copies of receipts in your expense reporting strategy. Digital smart receipts are easy – simply integrate them into your accounting software and let automation take you away.
But even physical sales receipts can be digitized, Pluto allows you to digitize your receipt very simply - through your phone.
Incorporating such technology means that even paper receipts fold neatly into your overarching digital strategy.
And as you’ll see, the process comes with tons of benefits.
Increases Integration Potential
A massive benefit of digital tracking is the sheer integration potential. Most receipt management tools, from receipt scanning devices to receipt tracking software, easily mesh with your existing expense reports system.
From there, you can automate mindless tasks and set up occasional human checks to ensure the system works as intended.
Fewer Costly Errors
Another way that a digital receipt management program saves costs is by reducing employee errors. Digital receipts should meld seamlessly into your tracking system – no surprises there.
But even processing physical receipts is cheaper and easier.
With their mobile phones, employees can scan receipts and upload them instantly. From there, Pluto categorizes the information and adds it to the overall report.
While employees may spend a second filling in any blanks, increased automation greatly reduces the risk of input errors.
Reduces Risk of Fraud
Less human interference means your financial system is more resilient to fraudulent activities. Pluto improves speed and accuracy while digitizing the receipts.
That leaves fewer opportunities for fraudulent claims.
Uploading physical receipts means less physical space is needed for storage. That can save you on storage costs and reduce desktop and file cabinet clutter.
And because everything’s digitally maintained, you’ll still meet or exceed your tax authority’s required financial record storage period.
Not to mention, just finding your records will be easier than ever!
No person or business enjoys tax season. But digital management makes the process at least a little easier.
Because all of your information is stored online, it’s easier to access and export receipts as needed.
When tax time or the dreaded audit comes around, your data will be well-organized and easily accessible.
More Efficient Expense Reporting
Traditional receipt management is a costly, time-intensive, error-prone manual process that used to be necessary. With modern tools, businesses can streamline the entire financial structure of their organization.
No more lost receipts or worrying about fraud.
Less time spent inputting and double-checking data, and more time helping your business grow.
All these positive benefits will improve efficiency – and even bring smiles to your accountants’ faces.
Like using a virtual corporate card, digital receipt management speeds up the reimbursement process.
Since everything is tracked and verified electronically, it’s easy to set up an automatic or streamlined reimbursement protocol.
Putting Your Eco-Friendly Foot Forward
Lastly, any step your business can take toward going paperless is good news for the environment.
Cutting down fewer trees and reducing printer ink usage are laudable goals that can decrease your environmental footprint.
Not only will you enjoy cost savings, but you’ll feel better about doing business in an increasingly eco-conscious world.
8 Tips for Efficient Receipt Management
Digitizing your receipt management strategy is just the first step toward expense report success. To ensure you’re operating at maximum efficiency, consider the following tips.
1. Use Pluto App
The first step is to get Pluto and start managing your spending digitally.
While you’re moving toward digital efficiency, your vendors aren’t required to follow. Keeping the proper tech on hand ensures you can digitize any paper receipts that come your way.
Pluto allows you to take a picture of the receipt, upload it to your expense and just like that the reconciliation process is done!
2. Save Your Receipts
While you can set up secure digital folders to store all your digital originals and copies - Pluto does that for you!
Just take a picture of the receipt, upload it to the app and that is it.
3. Ensure High-Quality Digital Format Uploads
There’s no point in uploading and saving documents if you can’t read them.
Before tossing your physical copies, make sure you can clearly read the essential information on each receipt. (Such as the company name, date, purchased item(s), and amount.)
4. Categorize Submitted Expenses
Take some time to categorize your expenses (most businesses do this in chronological order). Pluto helps you with that, but just make sure to check the right category so the reporting stays in top notch condition.
5. Set Up a Simple Expense Report Strategy
Expense reporting is the backbone of any business’ financials. For prompt, complete reporting and tracking, ensure that you design a straightforward strategy.
Same-day submissions, fewer Excel sheets, and faster reimbursement protocols will improve efficiency and attitudes. Better yet, invest in a quality expense and receipt management software.
Or even better - start with Pluto, we have a free package. It will allow you to completely digitize and control your spending, while keeping your reporting in the best possible shape.
6. Establish Accountability
A top-notch expense reporting strategy only works if people use it.
To ensure your protocols are followed, emphasize and encourage accountability. Keep all managers and supervisors up-to-date with company spending and card policies and remind them to disseminate that information appropriately. Follow up with employee expenditures as needed.
7. Run Regular Internal Audits
Regular expense report audits help businesses track receipts fraud, clear up discrepancies, and streamline inefficiencies.
Take time each month or quarter to check for fictitious or overblown expenses or troubles with your expense reporting strategy.
Pluto allows you to run real-time reports at any given moment for any period of time.
8. Switch to Virtual Corporate Cards
Virtual corporate cards make managing receipt tracking even easier. Not only can you digitize the entire process end-to-end, but corporate p cards give you greater control over your expenditures and tracking.
Sure, you can’t prevent vendors from handing you physical receipts. But you can greatly minimize instances of employees walking in with a big stack of thermal paper to scan in.
Pluto offers unlimited virtual cards which will book all your expenses right into the dashboard!
- Proper receipt management is key to running a financially successful business.
- While manual receipt management reconciles physical copies, it’s increasingly unnecessary in an increasingly digital world.
- Digital receipt management simplifies the collection, reconciliation, and storage process.
- Digital tracking also reduces fraud potential, time and financial waste, and increases employee satisfaction.
- Digitizing your expense reports pairs nicely with digitizing your own payments with virtual corporate cards.
Why A Legacy ERP Is Not Enough For Modern Procurement Teams
In today's fast-paced business environment, most organisations rely on Enterprise Resource Planning (ERP) systems as foundational tools to manage and integrate various business processes. ERPs traditionally offer a broad spectrum of functionalities, assisting in handling essential operations such as procurement, data management, accounting, and supply chain management.
ERP systems provide a comprehensive suite of software functionalities to enhance and optimise various aspects of business operations. Over time, these systems have evolved, shifting from on-premises solutions to cloud-based platforms. However, organisations still face challenges when implementing ERP solutions across their enterprise.
One significant aspect often overlooked in ERP systems is their limitation regarding financial operations & intelligence. ERP solutions primarily focus on improving business processes and management but do not directly handle monetary transactions or provide financial products. This necessitates the integration of external financial institutions and banks with ERP systems.
Moreover, traditional ERP systems struggle to keep pace with the dynamic demands of modern procurement, particularly in the ever-evolving supply chain environment. Today, ERP systems need to be more proactive, incorporating features like real-time analytics and flexible processes to meet the ever-shifting requirements of procurement. Adapting to these changes is essential for businesses aiming to enhance their procurement efficiency and agility.
ERP Systems vs Procurement Solutions: How Are They Different?
ERP systems were initially designed to automate business processes and offer insights for internal controls, while procurement solutions comprehensively manage the ecosystem.
A P2P or a procurement solution is primarily built to meet an organisation's procurement and supply chain needs, an arena always problematic for traditional ERP.
Innovative organisations are now adopting leaner and cheaper solutions for their procurement processes. These tools can deftly handle specialised tasks and yield instant results.
Limitations of ERP
Factors like market volatility, evolving work dynamics, and shifting supply chains have made it challenging for businesses to integrate their procurement processes into their current ERP systems. Hence, it is vital to use specialised solutions to cater to dynamic business processes.
But before exploring the benefits of specialised solutions, let us consider the limitations of ERP:
Long Implementation Duration that Impedes ROI
Customising legacy ERP to meet procurement or supply needs is a hassle. It contributes to a longer implementation duration lasting several months. Customisation projects are resource-intensive. That makes a fast ROI virtually impossible to achieve.
Moreover, businesses must hire ERP consultants or trained partners for the implementation. The success rate and the implementation duration heavily depend on the expertise of such third parties.
With many companies already strung tight regarding capital, implementing legacy ERP to function as procurement systems may prove counterproductive.
Expensive Implementation and Maintenance
Legacy ERP licenses come at a high price. Depending on your software, ERP implementation costs can range from $150,000 to $750,000.
Moreover, procurement processes almost always require extra modules that can further increase costs. It also includes the additional burden of maintenance costs and training employees to use the software.
Failures To Meet Business Goals
The success rate of ERP implementation is dwindling. Recent studies from Gartner indicate that the failure rates of ERP implementations can exceed 75%. McKinsey, a reputed global consultancy, supports this claim as it quantifies the failure rate of all digital transformations to be higher than 70%.
One famous example is Hershey's ERP implementation failure in 1996 as they set out to replace their legacy IT systems with an integrated ERP environment. They chose SAP's R/3 ERP software, and an implementation time of 48 months was recommended, which was later cut down to 30 months. The result - a $10 million investment leading to a loss of $150 million in revenue, a 19% reduction in share price, and a 12% loss in international market share.
With such massive costs and periods involved in achieving numbers from legacy ERP solutions, using specialized procurement systems can make achieving business objectives far easier.
Lack of analytics and insights
ERP systems often fail to deliver the necessary analytics and data for effective operations. Managing vast volumes of data within these systems can be daunting. Challenges include ensuring data quality, the lack of real-time insights, limited data analysis capabilities, and integration issues with other software applications.
Poor User Experience
Many ERP systems require makeshift solutions to modify their functionality according to user demands, leading to frustration with end-users.
Legacy ERP systems are notoriously complex, making them challenging for end-users. Frequently, users must navigate between multiple interfaces, hindering productivity and adoption.
Furthermore, the lack of mobile apps and scattered functionalities exacerbate the issue—problems that a dedicated procurement solution can readily address.
Complex User Interfaces
ERP systems offer enterprise-grade capabilities, yet their inherent complexity and poor user experience pose significant challenges. Users often struggle with confusion, as traditional ERPs are overly intricate. The need for add-ons further exacerbates the complexity, as these additions must seamlessly integrate with the existing ERP system. This constant juggling of different user interfaces not only hampers productivity but also hinders widespread adoption.
One of the most disappointing aspects of legacy ERP systems is the lack of in-built communication channels. ERP systems struggle with establishing themselves as a medium of dialogue between internal business users and external suppliers, as they are not accessible from outside the business network. It tangles communication channels through unnecessary phone calls and scattered information exchange lines.
They are also severely limited in their capacity to maintain supplier pipelines, requiring most data to be entered and managed through several spreadsheets.
Urgent reports, design changes, and other important information cannot be communicated promptly, which may lead to losses. It leads to unnecessary time consumption and inaccuracies.
Solving ERP Issues with Dedicated Procurement Solutions
Addressing the limitations of ERP systems, organisations are increasingly turning to dedicated procurement solutions to streamline their purchasing processes and enhance efficiency. These specialised solutions offer advanced analytics, real-time insights, and improved data quality, making it easier for businesses to manage their procurement operations effectively.
By integrating dedicated procurement solutions with their ERP systems, organisations can bridge the gap between data management challenges and their need for comprehensive procurement intelligence, ultimately driving better decision-making and cost savings.
Addresses Overspending Issues
Integrating P2P software with ERP can prevent overspending in procurement. By harnessing ERP with eProcurement solutions, you can efficiently assess expenses across purchasing categories.
It allows you to manage budgets and increase savings. Moreover, integrating procurement solutions with ERP simplifies procurement management by automating approval processes.
Boosts Vendor Collaboration
Vendor collaboration is one of the most essential aspects of procurement. Keeping them informed of the relevant business operations helps avoid miscommunication.
By integrating procurement solutions with ERP systems, buyers and suppliers can access real-time data, empowering them to make informed decisions. This integration brings advantages such as:
- Enhanced collaboration: Seamless collaboration between buyers and sellers, achieved through transparent access to purchase orders, invoices, and receipts.
- Supplier empowerment: Suppliers are empowered with real-time insights into payment statuses via a supplier portal, which enables sound financial planning.
- Stronger buyer-supplier relationship: Heightened transparency nurtures and strengthens the critical relationships between buyers and suppliers, a fundamental cornerstone for any successful business.
- Improves Scalability and Flexibility
As businesses expand, stakeholders must seek platforms that can swiftly adapt to increased operational demands and changes in the operational cycle.
Procurement software provides essential features like mobile and remote access that most businesses require to scale operations. It also allows businesses to create highly specialised and efficient platforms, saving money, time, and human resources.
Helps Eradicate Duplication Issues
Procurement solutions can help connect all departments to ensure office supply orders are placed through a centralised system. They help share real-time data across tech, IT, finance and accounting, HR, sales, and marketing teams. It helps prevent duplicate purchases by coordinating buying across departments. Improved coordination also allows teams to maximise discounts and negotiation opportunities while saving time, money, and effort.
Reduces Procurement Errors Through Automation
Specialised software can help organisations optimise deals, accelerate processes, and reduce errors through automation. It helps allocate repetitive and simple tasks to the system rather than to users.
For example, businesses can automate their supply ordering with this technology. Automation helps set limits to ensure timely orders, prevent shortages, and follow any restrictions they have in place.
Handles Compliance and Risk Management Issues
Managing procurement-related risks and complying with regulations can be pretty challenging. An ERP-procurement integration empowers the software to handle compliance matters and mitigate risks during procurement processes, even involving multi-currency transactions.
Supplier Performance Management
Managing supplier performance during the procurement process can be quite challenging without the right tools at your disposal. However, by integrating procurement software with an ERP system, you can simplify collecting and analysing data related to supplier performance.
This valuable information encompasses delivery times, product quality, and responsiveness, enabling you to decide whether to maintain or end supplier relationships.
Inadequate inventory management can result in too much or too little stock. These outcomes affect working capital and operational efficiency. One practical approach to tackle this problem is integrating procurement solutions with ERP systems. Such integration offers benefits like:
- Real-time visibility into inventory levels, allowing for monitoring.
- Automated reordering process, reducing the burden on manual efforts.
For example, a supermarket chain can leverage sales data to automate the reordering of items, minimising waste and ensuring the availability of products.
Provides Analytics for Better Insights
By integrating procurement solutions with ERP, businesses gain a flexible data model capable of handling big data. It manages the data and offers valuable insights to enhance information generation, storage, and decision-making. Procurement software encompasses advanced spend analytics, supplier benchmarks, and comprehensive performance management.
Drastically Improves End-User Experience
Procurement solutions are built from the ground up, keeping procurement operations as the top priority. It helps avoid a cluttered, mismanaged UI that comes with legacy ERPs, enabling users to be more productive.
End-users can adapt to changes in the software much quicker, increasing efficiency.
Procurement and sourcing processes require a dedicated platform in 2023. Unlike legacy ERP, such dedicated solutions can handle complex sourcing and procurement operations. They ensure a streamlined and seamless flow of relevant information between internal business organisations and external suppliers, allowing all stakeholders to have complete project visibility.
The outcome of implementing a smaller yet far more efficient tool will facilitate faster time to market, subsequently letting you achieve your ROI at an expedited rate.
While customising an ERP may sound enticing, opting for an eProcurement solution is smarter.
Corporate P-Cards: How to Use Them for Maximum Advantage
P-cards can replace your corporate credit cards.
If you rely on credit cards, you would have 2-3 cards issued to the executives, which are shared with the employees. Though it seems a great method to ensure approval and budget control, it has many loopholes.
The finance teams are running after employees for receipts, employees are waiting on OTPs and approvals, and the CFO is not satisfied with the numbers.
You look for alternatives and land on p-cards.
P-cards (or purchase cards) are corporate cards you issue to your employees for business expenses. Then, be it purchasing a SaaS or making vendor payments, employees use it for all work-related spending.
What Is the Difference Between a Credit Card and a P-Card?
While both cards are used exclusively for business expenses, there are many differences.
Credit cards make expense management difficult, with no visibility into where the money is going. An executive shares a single card with their team, creating a chaotic financial situation.
The card owner struggles to manage a constant stream of payment requests. Employees are left hanging with delayed payments, waiting for approvals. Especially in bigger companies, finance teams struggle with reconciliation and zombie spending (which is when a company continues to pay for something that isn’t used anymore, or when it pays for services that former employees had used).
On the flip side, if you use p-cards, you can issue each employee a separate card for corporate expenses. Each card has a specific budget and restrictions to ensure control and facilitate approval without delays.
For instance, you issue a card with a $500 monthly limit, restricted to office supply vendors like "Office One."
In this way, you manage budget control and approvals without losing visibility or having to micromanage.
What Is the P-Card Process?
Moving from a credit card to a P-card isn’t complicated. Here is a step-by-step process of how you can provide your employees p cards and start using them:
Step 1: Generate Corporate Cards
The first step is to choose the type of card you want for your employees: physical or virtual. While a virtual card can be set up in under a minute, a physical card takes about 2-3 days to get delivered.
Physical cards work well for those who travel or have on-site jobs, making petty cash management easy. Contrarily, virtual cards support secure online purchases, such as buying SaaS tools or paying for digital advertising campaigns.
Once you decide whom to give a card and what type, set the budget and policies. You can incorporate the following policies to customize the cards:
- Specify the budget and replenishment frequency of the budget on the card- daily, monthly, or yearly.
- Define the purpose of cards by enabling only specific general ledgers (GL), labels, and tax codes.
- Switch on/off the ATM withdrawal option.
- Enable auto-lock for cards in case of receipt policy violation, where if the receipt isn’t attached in 7 days, the card is frozen.
All these customization options offer you better control without having to chase employees later. Deciding the budget, frequency, and vendors ensures that the card is used rightfully.
For instance, you would switch off ATM withdrawal for virtual cards that are meant for buying SaaS tools. Likewise, you can establish a monthly replenishment schedule to maintain sufficient funds while preventing excess spending.
Apart from this method, your employees can also request to activate the P-cards. They explain the card's purpose, after which the admin can approve/reject the request.
Now that the employees have cards in their hands, let’s see how you can better manage corporate spending with them.
Step 2: Manage Expenses Via Centralized Dashboard
Every expense on the corporate p-card is visible in real time on a centralized transactions dashboard. You get key information such as merchant name, expense category, card information, amount, and approval status.
Along with this dashboard, you get a dedicated tab for each expense where all its information is available.
You can review the key information such as receipt, department, merchant, date/time, expense category, etc. you can also download the receipt, approve/reject the expense, and check the activity log.
The activity log keeps track of all the conversations that have been happening with a particular transaction. Traditionally, companies use email and Slack, which makes communication messy. With this log, they can keep all their conversations and important information in one organized place.
Step 3: Create Approval Workflows
Approval workflows ensure that each expense follows a defined hierarchy for approval by the right stakeholders. You can customize them depending on different amounts, departments, and other factors.
It is a simple no-code system where you create workflows based on if-then rules.
A custom approval workflow ensures timely and effective approval without having to run after dedicated team members. Each of them receives a notification as soon as the expense takes place, and they can approve it easily.
Approvals and employee reimbursement become easy with a frictionless workflow like this.
Step 4: Report and Reconcile Expenses
Integrating your cards with your accounting systems becomes the last step to facilitate reporting and reconciliation.
Once you integrate with your accounting software, you can enjoy complete visibility and control over your corporate expenses.
You get a dedicated insights window to track expenses and identify trends. You can add custom filters and export these for further analysis.
To understand the entire process better, book a demo and see how you can benefit from switching to a corporate p card.
Why Shift From Traditional Methods to Corporate P Cards?
Credit cards seem simpler, where a bank gives a few credit cards to share among the teams. But here’s why it doesn’t work:
- It is difficult to track who spends what, how much, and why.
- Employees wait for OTPs and approvals, delaying payments and reimbursements.
- The chances of zombie spending increase because the same card is shared. This also becomes one of the loopholes which leads employees to misuse the cards.
- The admins have to chase employees for receipts during reconciliation.
While these are just a few, relying on credit cards can cause chaos in expense management. Here are some reasons corporate p-cards are a more suitable option today:
No More Shared Cards
You ditch the whole system of sharing credit cards, which is the root cause of limited visibility. With corporate p cards, you can issue any employee a dedicated card for specific expenses.
So, if you issue Rashid from the marketing department a virtual corporate card for running Ads, he can not use it otherwise. He will be accountable for any unnecessary expenses beyond the specified budget.
This means more visibility and control over corporate expenses.
Easy Receipt Management
Corporate cards make receipt management easier with OCR technology in the following ways:
- Submitting expense reports at the end of the day becomes easier as it auto-populates all the information
- Uploading receipts in bulk upload with OCR handling the rest makes the process faster
- Detecting duplicate receipts becomes simpler as OCR eliminates the risk of manual errors
Apart from OCR, you also get the option to split the transactions to make the accounting process easier. Here, for each transaction, you can split the amount into a separate category, GL account, tax code, etc.
For instance, a $300 expense can be split into $200 for software purchases and the remaining $100 as consulting fees. Each will have a specific category, GL account, and corresponding tax code.
Corporate cards give more visibility and control over finances.
Although both credit cards and p-cards can have specific budgets, p-cards enable you to set specific policies and rules.
For instance, you give an employee a $1,000 monthly budget but restrict them to using the card only for office supplies purchases.
Similarly, you can set a $500 monthly limit for marketing expenses and restrict the card to "Ad Campaigns" and "Promotions," ensuring focused spending.
Another benefit is to assign monthly, yearly, and weekly budgets.
For instance, you can allocate an annual budget of $500,000 for the marketing department but assign a weekly budget of $10,000 for ad campaigns.
This facilitates flexibility for the teams to function better and gives the finance team more control over resource planning and allocation.
Receipt uploading becomes simpler when all you have to do is click a picture on WhatsApp and hit send.
After each transaction, employees get a notification to upload the receipts via WhatsApp. With this simple integration, receipt capturing becomes simple and fast.
Not only is the receipt captured, but stored under the relevant transaction tab with all its information intact. OCR makes it easier to extract key details and populate expense reports.
Admins can approve these expenses, and reconciliation becomes a breeze.
Eliminate Corporate Card Fraud
P-cards give you more control and security. From setting custom policies to raising alerts in case of duplicate receipts, p-cards ensure that employees don’t misuse the cards.
Additionally, the custom approvals workflows and dedicated activity logs reduce the chances of oversight. This system helps prevent unauthorized spending.
For instance, an employee tries to use the card for a personal expense, like an expensive dinner.
The custom approval setup will alert the admins. The active activity log with documented conversations will further ensure that no personal expense is charged on corporate cards.
Get the Most Out of Your Corporate Cards
Transitioning from credit cards to corporate p cards can be an exciting move. But to make the most of it:
- Set an expense policy outlining the guidelines that will govern the corporate cards. This practice will also become the pillar for a healthier financial environment to support internal control over financial reporting (ICFR) efforts.
- Understand the hierarchies in the company to create approval workflows accordingly. Find a balance between control and micromanagement. Managers should be informed about expenses without being excessively involved in them.
Do this right, and you will have better visibility and control over your finances. The employees will not be left hanging for approvals. The finance team will be at peace, and the CFO will have more faith in the numbers.
Modern finance teams save time & money with Pluto.
Get started today.
Join 2000+ finance professionals keeping up to date with the latest news & releases.
© Pluto Card is a Pluto Financial Services Inc. company 2023
The product and services mentioned on this webpage belong to Pluto Technologies Ltd (Pluto), a company incorporated under the laws of Dubai International Financial Centre (DIFC), Dubai holding commercial license number CL5294. Pluto is a financial technology provider and not a bank. Pluto provides certain facilities for the utilization of payment services through Nymcard Payment Services LLC under the applicable payment network and Bank Identification Number Sponsorship of Mashreq Bank PSC. This is pursuant to the license by Visa® Inc and is available for the residents of UAE subject to Terms and Conditions of use