Corporate Card: Definition, How It Works, and Applying For It

Keeping costs in check, no matter the size of your company, is the key to making it big. That’s why many businesses, from established giants to fresh startups, are turning to corporate card.

These cards not only make managing expenses easier, but also give employees more freedom and keep your cash flow flowing smoothly.

Let’s dive deeper into corporate card in this article – we’ll cover the different types, how they work, and how to get your hands on them.

What is corporate card?

Corporate card are like special credit or debit cards given to employees for work-related stuff. Think travel expenses or office supplies.

No more using personal money or cards for work stuff. Corporate cards make it easier for both employees and the company to keep track of expenses.

Types of corporate card

When it comes to managing business expenses, corporate card offer a powerful tool for both established companies and those just starting out. These cards come in two types: credit and debit.

1. Corporate credit card

For companies with a solid track record, corporate credit cards provide a convenient payment solution. Employees can make business purchases directly with the card, streamlining the process and minimizing the need for out-of-pocket expenses. These cards often come in two varieties:

• Individually Liable: Employees pay the bill upfront and are then reimbursed by the company. This fosters responsibility and can be ideal for certain purchases.
• Corporate Liable: The company takes direct responsibility for settling the bill, offering a simpler approach for routine expenses.

2. Corporate debit card

Corporate debit cards offer a different approach. Linked directly to the company’s bank account, these cards eliminate the need for credit lines and interest charges. They’re generally easier to obtain, even for companies with limited credit history.

Here’s the beauty: responsible spending with corporate debit cards doesn’t impact the company’s credit score and avoids the risks of overspending or debt accumulation.

How corporate cards work

Corporate cards function similarly to personal credit or debit cards, but with additional features tailored for business transactions.

1. Expense management

Corporate cards empower employees to handle business costs, like travel expenses, without relying on personal funds. This translates to simplified expense tracking for the company, with detailed reports generated for effective budgeting and informed financial decisions.

2. Tailored spending controls

Companies can establish individual spending limits for employees based on their roles or departments. This ensures employees have the resources they need while maintaining control over overall company spending.

3. Seamless integration with accounting systems

Many corporate cards integrate seamlessly with popular accounting software. Transactions automatically synchronize, eliminating the need for manual data entry and minimizing the risk of errors.

4. Virtual cards for online transactions

Some corporate card providers offer virtual cards specifically designed for online transactions. These virtual cards utilize unique, one-time codes, providing an extra layer of security for online purchases.

5. Easy management with mobile app

To complement the convenience of corporate cards, many providers also offer mobile applications accessible through smartphones. Employees can manage expenses, view transaction history, and submit purchase receipts directly from their smartphones.

Applying for corporate card: a step-by-step guide

Obtaining a corporate credit card requires some groundwork but can be a game-changer for managing expenses. Here’s a breakdown to help you navigate the process efficiently:

1. Designating a team lead: Designate a responsible team member (think financial officer or authorized manager) to spearhead the application. This point person needs the authority to finalize financial agreements for the company.
2. Needs assessment: Time for some self-reflection! Clearly define why your business needs these cards. Who will be using them, and for what purposes? Identifying your spending habits will guide you towards the features you need most in a card.
3. Market research: Not all cards are created equal. Research different issuers and the features they offer. Compare terms and find the perfect match for your business needs.
4. Business credit check: Maintaining a healthy business credit score is crucial. Before applying, ensure your credit history is accurate and address any discrepancies.
5. Document gathering: Compile all the necessary paperwork, including your business license, financial statements, and tax identification number (TIN). Remember, different cards may have varying requirements, so double-check before you start.
6. Application submission: Fill out the application form diligently. It might require personal details of the applicant (financial officer or owner) alongside your business information. Submit the application to the chosen issuer. Buckle up, as the approval process can take anywhere from a few hours to a few weeks while they assess your financials and credit history.
7. Cardholder agreement review: Congratulations on the approval! Before you start swiping, carefully review the cardholder agreement. This document outlines crucial details like handling disputes and unauthorized charges.
8. Account management system implementation: Establish a system for managing your corporate card account. This includes tracking expenses, generating reports, and ensuring timely payments to maintain a good credit standing.
9. Card distribution with policy briefing: It’s time to distribute the cards to designated employees. Before handing them over, make sure each cardholder understands spending limits and company usage policies. Sales personnel, executives, and those with frequent travel or purchase needs are common card recipients.

By following these steps and ensuring proper documentation, you’ll be well on your way to utilizing a corporate credit card effectively within your business!

Conclusion

Equipped with comprehensive features, corporate cards offer a multitude of benefits that can transform your organization’s financial operations.

Before entrusting employees with corporate cards, it is crucial to establish clear spending guidelines. Define permissible transactions and set spending limits to ensure alignment with company policies and financial objectives.

Mekari Expense stands out as a compelling choice for businesses seeking a quick and effortless corporate card solution. This virtual credit card offers a suite of features designed to revolutionize expense management, empowering businesses with simplified expense tracking, enhance spending control, real-time expense insight, and robust security measures.

Embrace the future of expense management with Mekari Expense. Sign up today and experience the difference.

Referensi

Ramp. ”Research shows modern corporate cards bolster—not hinder—compliance”