It’s hard to think back to a time when corporate cards were reserved for a handful of senior executives, issued as part of a promotion package. The rise in online spending and growth of employee autonomy has democratised access to the company card – with everyone now keen to manage their own transactions.
But while channelling more purchases through corporate cards should make business spend easier to manage, there’s a risk that democratising access can lead to companies losing control over the decisions team members are making.
To avoid this issue, Yordex has released a new white paper: How to revolutionise your company card management, looking at how organisations can use smart company cards to better manage cash flow and business spend decisions. Here are some of our key findings…
Embracing an individual card environment
One of the most common day-to-day challenges that companies face is keeping track of who put each transaction through on the corporate card in order to reconcile purchases, collect the right receipts for VAT calculations and accurately manage company spend.
To solve this problem, rather than trying to maintain authority over a handful of cards, company bosses should be looking to issue each employee with their own, individual smart card, which staff can request based on their own requirements and budget. This can either be a standard physical card, or, if employees need to make a specific online purchase, finance teams can issue virtual cards which expire automatically when used.
This approach makes the approval process much quicker and smoother, as employees don’t have to ask every single time they want to make a purchase, and smart cards automatically track each transaction back to the appropriate member of staff – saving significantly on administration.
Making every employee accountable for spending
Moving to a 1:1 company card system doesn’t just make spend control easier for finance teams; it makes employees more accountable for their decisions, encouraging them to take responsibility for the way money is spent.
Many businesses are unwittingly impacted by ‘accidental overspends’ because no single person is in control of corporate cards; for example, subscriptions automatically renew when they are no longer needed. Equally, if many people are using the same card for different reasons, it can be difficult to spot erroneous transactions – whether accidental or through fraud – until much further down the line.
Under an individual smart card system, employers have the power to control the remit of each team member’s spending, but employees still feel valued and trusted to make their own purchasing decisions within those agreed parameters.
Seeing – and acting on – the bigger picture
The biggest company-wide benefit to individually issuing cards is the impact it has on spend management.
Expenses only account for 5-10% of an organisation’s total spend, but if finance teams are having to chase missing receipts or process and reimburse purchases made on personal cards or with cash, they can take a disproportionate amount of time and effort to manage.
Powerful new-generation company cards are integrating with smart spend management solutions, enabling businesses to control all types of spending holistically. Any transactions made on individual company cards are logged in real-time, and their associated paper trails automatically synching with accounting systems. This enables finance teams to build an accurate picture of company cash flow as purchases are made, rather than having to wait until the accounts are reconciled at the end of each month.
More importantly, up-to-date visibility over company spending empowers senior personnel to make agile business decisions, based on real-time data. It’s a scenario where democratising access to company cards improves authority and strategic capabilities – rather than having the opposite effect.
For more insights download our white paper: How to Revolutionise your Company Card Management.
Yordex has developed a smart spend management solution with integrated company cards, which reduces the cost of spend management by 60-70%. Book a demo to see how our solution works.