Bank Business Credit Cards for Corporate Expenses, Why Not?

Introduction

Effective expense management maintains operational efficiency and ensures financial stability. I’m saying this from personal experience.  
 
A few years ago, an employee used a bank business credit card allocated under his name to pay for several tooling accounts for the business.  

When this employee left the company, we were in a difficult situation. We scrambled to track down the accounts linked to that card so we could retain our accounts and data.  

This incident highlighted the urgent need for a more strategic approach to expense management and I'd like to stop you from encountering the same struggles.

11 challenges with using bank business credit cards for employee expenses 

Business credit cards are issued by financial institutions and are typically in the name of the company but assigned to individual employees. Some examples include Barclay’s business credit card, a Santander business credit card or free bank business credit cards for business expenses. 

These cards come with strict credit limits that you need to contact the bank to adjust. The distribution of bank cards for business expenses typically reserved for department heads, poses a significant challenge:  

1. Increased manual work: This often leaves employees with the task of manually filing expense reports which wastes time. Another time-wasting case scenario includes trying to locate a card that may be with a Department Head on their vacation.
   
   
2. High costs: These issues lead to delays and increased costs, slowing the expense management process. One solution could be to issue business credit cards to more people, but it is not always realistic.
   
   
3. Higher complexities: The process of managing receipts for business credit card transactions is far from efficient, adding to the complexity of the situation.
   
   
4. Risk of lost data: Employees using business credit cards must provide proof of purchase for every transaction. But who has not misplaced a receipt or pulled it out of a coat pocket only for it to have become illegible?
   
   
5. More time on receipt management: Some points of sale no longer issue receipts, except on request. This makes business credit card receipt management more annoying.
   
   
6. Increased frustration:  The strict rules make managing business credit card receipts frustrating and inefficient and give employees the feeling of mistrust.
   
   
7. Complicated compliance: The delayed arrival of card statements further complicates charge disputes and compliance checks.
   
   
8. Delayed insights: Real-time oversight is crucial for finance teams to promptly identify and address problematic spending patterns, underscoring the necessity for a solution.
   
   
9. Unenforced company policies: Because the card statements arrive long after the purchases, contesting charges is difficult. How do you tell an employee who spent company money in good faith that they will not be reimbursed due to the small print in the policy?
   
   
10. No way to detect anomalies: Besides, Finance teams need real-time oversight of spending to flag problematic patterns. That is difficult when the card statement only comes in monthly. It is even harder to react quickly and efficiently to suspicious or out-of-policy charges.
    
    
11. Higher employee turnover: Waiting for monthly statements hinders their ability to react quickly and efficiently to suspicious or out-of-policy charges. Even if a purchase is out of policy, that conversation can lead to disgruntled employees. Creating higher turnover and, ultimately, higher costs.

The solution: A modern corporate credit card 

Modern corporate credit cards issued by expense management software providers offer a safe, convenient and easy-to-use card management platform. 
 
They allow for flexible setting of card limits and real-time reporting. It seamlessly integrates with your existing setup of accounting and travel expense management tools and processes.  

They are linked directly to company accounts and offer a more streamlined and controlled approach to managing business expenses.  

These cards: 

• Are connected to a central company account and are typically managed through an expense management platform.  
• Allow for real-time tracking of transactions, automatic categorization of expenses, and easy reconciliation. 
• Provide clear visibility into spending patterns and help prevent unauthorised or unnecessary expenditures.

The benefits of Mobilexpense business credit cards

1. Mobilexpense business credit cards are fully controlled by you. Not a bank.  
2. Get real-time insights into spending. No need to wait for bank statements. 
3. They can be used to make payments both online and in-store, recurring or one time, making them practical and easy to use for everyone in your company.  
4. Easily order, freeze, block and manage all business credit cards online, without having to contact the bank. 
5. With Mobilexpense cards, enjoy a 0% mark-up on foreign exchange when travelling internationally. 

Moreover, if an employee leaves, the company retains control over the card and its associated accounts, ensuring continuity and reducing the risk of financial discrepancies. 

Use case: 

Recticel and Conbit are now masters at using Mobilexpense business cards to manage employee expenses. 

Recticel chose Mobilexpense because of the ability to integrate with their multiple business credit card providers, travel providers, and other providers such as fuel cards, car rental agencies, mobile phone service operators, and a VAT recovery agency. 

By consolidating a wide range of spending into Mobilexpense, Recticel has reaped the rewards, achieving a staggering €1 million in savings.  

These savings are not just a number. They represent simplified administration, reduced spend management, and the empowerment of employees to use tools with built-in savings, all while enhancing the traveller experience. 
 
Read more in our Recticel Case Study: