Corporate cards are a great way to mana your spending, control expenses, eliminate petty cash, and, most importantly - give your employees the freedom to focus on their work without any blockages.
But for everything to work smoothly and for everyone to know how to use your corporate cards, you must establish some ground rules.
What is a Corporate Credit Card Policy?
A corporate credit card policy entails the protocols and terms and conditions of use associated with a company credit card issued in an employee's name. A company credit card policy protects businesses and companies from unauthorized payments and inappropriate use by outlining the repercussions and consequences of such actions.
Why Do You Need a Corporate Credit Card Policy?
In the same way, companies have a travel and expense policy; they have a corporate card policy. A company credit card policy is set in place to ensure all company cards are used for authorized and permitted business purchases.
In a corporate credit card policy, the guidelines, responsibilities of the cardholder, dos and don'ts, and repercussions of misuse are outlined. This ensures that all business finances are regulated.
While it is important to have a corporate credit card policy, Pluto takes the extra step to ensure all transactions and purchases are pre-approved, regulated, and permitted by:
- Creating Pluto cards that can only be used with specific vendors
- Setting daily, weekly, or monthly limits on cards
- Having an approval workflow to make sure the necessary departments are approving all transactions
Which Employees are Eligible for a Corporate Credit Card?
It is essential to note which job roles are eligible for a company credit card to protect your business against accusations of favoritism or discrimination.
A company can decide whether all employees, c-suites, or department heads are eligible for corporate credit cards.
Typically, companies only give executives, VP levels, C-suite, and salespeople access to company credit cards. However, there are situations where employees who are not eligible for a company credit card may have to pay for business-related expenses, such as plane tickets. In this case, the employee would ask their manager to pay for such an expense with the corporate credit card, or they will have to pay using their personal credit card or cash and file a reimbursement, which will be reimbursed with the next paycheck.
With Pluto's expense management platform, a company does not have to worry about corporate credit card eligibility or the hassle of employees filing reimbursements.
Using Pluto's platform, the business will have access to unlimited corporate cards, meaning any employee can be issued corporate cards with spend limits, approval workflows, and category-specific purchases. This results in no overspending and knowing all transactions are pre-approved and authorized due to the card only being accepted at allocated vendors.
Suppose an expense is made using cash or a personal credit card. In that case, the employee can snap a picture of their receipt and have it approved on the spot with Pluto's Whatsapp reimbursement feature, making it easier for finance teams and employees to sort through reimbursement receipts!
What Does a Corporate Credit Card Policy Contain?
When creating a corporate credit card policy, the credit cards intended to be used, the credit card provider's requirements, and the company's needs should be known.
In most cases, corporate credit card policies include the following points as part of their corporate credit card policy:
Employee Credit Card Agreement
When issuing a corporate credit card to employees, an employee credit card agreement must be signed to ensure that employees understand the card belongs to the company, regardless of the employee's name on the card.
The agreement will also state that the company credit cards can only be used for business-related expenses, where the company can investigate charges, if necessary.
Permitted Types of Expenses
The types of transactions that can be made should be stated clearly in the company credit card policy: work-related expenses only. These include, but are not limited to:
- Meetings with clients
- Work-related travel (e.g., flight ticket, accommodation)
- Educational material
- Software subscriptions
- Legal document expenses
- Business meals
While tending to the above is a good way to ensure company credit cards are being used for business-related expenses, Pluto offers cards that can only be used for specific vendors, such as fuel cards, to avoid mishaps or fraud.
With these policies and procedures in place, employees should note that if an instance occurs where the company credit card is used for non-authorized transactions, personal expenses, or cash withdrawals, they will be faced with disciplinary action.
The disciplinary action could result in the following:
- Cancellation of the company credit card
- Withdrawal of corporate credit cards privileges
- Recovery of funds from employee's salary
- Termination of employee contract
In some cases, an employee cardholder may incur an expense that is not usually permitted under the company credit card policy. To be able to do so, the company credit card policy should indicate how the cardholders can apply for an exception and get permission for such expenses.
While doing so, the company should also outline specific transactions that can never be made using the company credit card.
The spending limits on a company credit card usually depend on the employee's job and level of seniority. The company credit card policy should clarify the card's limits when receiving a new card.
In general, businesses can choose to have limits established based on transactions per-item or on a cumulative basis. However, not all employees will have the same spending limits.
With Pluto, you can set spending limits on virtual or physical cards before issuing them to ensure that employee spending stays within their budget.
Temporary and Permanent Limit Increase
To get a limit increase on a company credit card, the cardholder must fill out a form stating why they need a limit increase on their card and whether it is a temporary or permanent limit increase. The form will then have to be signed by the employee's manager and sent to the company credit card provider for processing.
Although it is possible, the process of getting a limit increase on a company credit card may take quite some time. Pluto allows managers, administrators, and finance teams to increase limits on virtual or physical company credit cards in seconds.
A company credit card policy must show how approval requests work when using a corporate credit card. Usually, approvers are responsible for reviewing all transactions regularly. By doing so, the following is warranted:
- The transaction or expense adheres to the company credit card policy
- A receipt is attached to the transaction made
- The description of the transaction follows the details mentioned above
Pluto takes the extra mile to automate approval workflows and receipt reconciliation. With Pluto, all approval requests will be made through the Pluto platform, and receipts will be collected through Whatsapp as soon as a transaction is made.
Including the cardholder's responsibilities in the company credit card policy is an essential part of the document. The purpose is to describe how employees can ensure they use their cards appropriately.
It's important to include that:
- Cards cannot be used for personal expenses
- Cards must only be used by the cardholder to help avoid fraud
- Cards and PINs must be stored in a safe place
- Cards must be reported as stolen and lost as soon as possible
- Document all expenses and send monthly reports
Employees are expected to comply with the corporate card policy. If the cardholder violates the terms stated, disciplinary action will be taken against the employee.
The disciplinary action can include:
- Face a written warning for violating the corporate credit card policy
- Pay for the expenses yourself if you've used the card for any inappropriate use
- Lose the right to have a corporate credit card if you lose a receipt or violate the policy
- Suspension or termination of employment if you give the company credit card to unauthorized people or abuse the expense limits
- Loss of company card privileges if expenses are not submitted on time
- Legal action and termination can be imposed if prohibited purchases are made using the company credit card
How Can a Corporate Card Policy Prevent Fraud?
Globalization and remote work have increased the risks of card fraud and identity theft. A proper corporate credit card policy will minimize these risks and ensure that your corporate funds are safe.
With Pluto, it is effortless to set card limits in real-time, so decreasing the spending limit when needed can be done in a matter of seconds. This ensures that a card is not over-exposed. If the card details were compromised, the perpetrator would not be able to withdraw any big sums.
You can see all the cardholders from your Pluto dashboard and create additional cards if needed. This prevents sharing card details between the employees, as it is simply not needed anymore. The cards are used by authorized personnel, who are aware of the proper use and policies - further preventing any potential fraud and leaks.
Pluto allows you to create a card for a particular transaction, purpose, or project. This will enable you to allocate a certain amount of money that can be spent on the card, meaning the risks of any authorized charges, re-bills, or other online scams are non-existent.
In a bigger organization, petty cash can be an issue as it is easy to defraud. Even when used properly, it is a pain to keep track of. Petty cash is no longer a problem with Pluto corporate cards, particularly when you can issue as many corporate cards as you need with Pluto seconds (specifically 9 seconds).
The Value of a Corporate Credit Card Policy
Company card policies control employee spending, ensure compliance, and minimize fraud risk. It's even easier to maximize your results by integrating it with Pluto's expense management software.
By integrating with Pluto, you can:
- Issue unlimited corporate cards
- Digitize receipt reconciliation
- Reimburse in seconds
- Review all transactions in real-time
- Approve expenses in an instant
- Minimize the risk of employee fraud
A corporate card policy will help you to establish ground rules that will keep things running smoothly but, at the same time, will not limit your employees in their day-to-day work.
Ensure everyone who will have the card is aware of the rules. The great thing about using Pluto is that you can make your corporate card policy very simple, as Pluto has all the tools to manage your spending and keep everything under control.
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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