Top benefits of giving employees a business credit card
Quick insights
- Business credit cards provide benefits to the company as well as the employees using them.
- These cards allow businesses to streamline expense tracking and eliminate reimbursement processes.
- Employees using business credit cards reap the benefits of added security protections as well as not having to consider how much cash they have on hand when making work-related purchases.
There are many benefits for companies who want to provide employees with their own business credit card. They not only help businesses track spending and build credit, but they also give employees the ability to more easily and securely make work-related purchases. This article explores several reasons why giving your employees a business credit card is beneficial for them and may make good business sense.
What is an employee credit card?
An employee credit card is a card issued by a financial institution and is designated for business expenses. It functions like a personal credit card but is meant exclusively for work-related purchases made by employees of the business. Aside from the benefits that businesses get from having credit cards, there are several reasons to consider issuing business credit cards to your employees.
Reasons to give employees a business credit card
Business owners are often looking for ways to streamline expenses and improve cash flow within the business. Giving your employees a business credit card accomplishes both those objectives. These cards also give employees a way to make work-related purchases without having to use their personal funds, thereby transferring that spending power to the company and helping it build credit.
Streamline expense tracking
Business credit cards allow for a more streamlined expense tracking and reimbursement process. Instead of reconciling employee expense reports and issuing reimbursements for business expenses on personal accounts, business cards provide a central place to track and review transactions. This eliminates the need to manually review and approve reimbursement requests.
Monitor employee spending habits
When business expenses are in one central place, you can get a clear picture of how company funds are being used in real time. Many business credit cards come with better tracking and reporting features than personal credit cards, giving business owners a better sense of cash flow across the business. Business card accounts also provide real-time expense categorization and spending analysis, which may lessen the need for employees to answer questions about purchases they made months ago.
Guardrails are also built in to offer added protection to business owners and employees using the cards. Many business cards allow for spending limits, collectively or for categorized expenses, giving business owners built-in controls on employee spending. This also gives employees a reliable way to avoid overspending with their card. Budgeted amounts can be built into the card’s spending limits.
Earn cash back rewards
Business owners who allow employees to make purchases using their personal accounts are missing out on rewards. When employees make purchases using a company credit card, those purchases help the company earn rewards, such as cash back.
Business credit cards can include discounts on business related expenses like office supplies, cable, internet, and phone services. Some cards can even offer rewards for digital advertising letting you benefit from making business purchases.
Travel Benefits
Depending on the company card, it may include travel benefits that your employees wouldn't have otherwise. Card travel benefits may include car rental insurance, travel insurance, airport priority lounge access and cell phone protections. Consider how enhanced travel protections can be seen as an employee perk for card users.
In summary
There are many benefits both employees and business owners receive when using business credit cards. Chief among them, your employees get the benefit of not having to submit reimbursements and wait for funds to be deposited in their account. In addition, many cards come with added security protections and could possibly include travel perks. By streamlining the purchasing, reporting and tracking of business expenses under one spending account, both employees and business owners could reap the benefits of business credit cards.
