The right credit card for employees.
In medium-sized and large companies in particular, it is not uncommon for employees to be provided with their own credit cards. It allows freedom of payment on business trips and on customer appointments, as well as transparent accounting of expenses.
What are the advantages of credit cards for employees?
Such a credit card has decisive advantages for both parties. Employees do not have to make advance payments for business expenses, as would be the case with a private credit card. In addition, the availability limit ensures that customers can, for example, entertain customers at business lunches or book flights at short notice without having to briefly contact the accounting department. For companies, however, it is crucial that many tasks from complicated advance payments are eliminated thanks to credit cards and cashless payments.
The travel expense report is simplified by documenting the card sales, which saves time and reduces the expenditure of the accounting. Furthermore, neither employees nor companies have to “advance” costs incurred. Instead, these are recorded in the course of credit card sales and then paid on the balance sheet date, usually once a month, from the connected account.
Both employees and the company continue to receive a higher level of transparency through the credit card , since the expenses incurred are documented and recorded in a transparent and unadulterated manner. Possible private expenses can therefore be quickly separated from business expenses. Employees keep a constant overview of their available “expense account”, while the company and employees can even benefit secondarily from the expenses – for example by collecting points, cashback or bonus miles.
Employee credit cards also usually offer the option of conveniently monitoring all cards at a glance and, if necessary, blocking them. In some cases, the companies even get greatly discounted conditions by purchasing several credit cards for several people from the same bank or from the same provider. This results in advantages in the overview, expenditure processing, accounting, profitability and control in equal measure.
What type of credit card should companies use?
A prepaid credit card is not suitable for employees. This would negate many advantages. Instead, it must be a fully-fledged credit card, which ideally also has good conditions for payments and cash withdrawals abroad, provided that employees are more frequently traveling on business trips outside of Germany.
The extent to which the full credit card is available depends on many factors. The position of the employee plays a key role, but also how often and intensely they have to do business. As a rule, field staff always need a higher level of availability than those who work permanently on site at the headquarters.
Cost structures for employees
As always in day-to-day business, the principles of profitability should also be observed when issuing credit cards. Companies have the great advantage that they usually apply for and maintain several cards, since several employees must have a credit card at the same time. The larger purchase volume can bring advantages in terms of conditions. It is important to ensure that fees are minimal or none at all, both domestically and abroad. Depending on the position of the employee, different models can sometimes be selected.
Which additional services are interesting?
From the point of view of companies and employees, it is important that no liability arises in the event of loss or theft, in particular because corporate credit cards usually have a higher credit limit than those in the private environment. Furthermore, the credit cards should “reward” sales made at least in one way, for example via a cashback or various bonus programs. Such reimbursements can be particularly worthwhile, especially since credit cards are used more frequently and with higher amounts.
It is also advantageous if policies are still included, for example travel insurance for business trips abroad. It is obvious to consider such policies, after all, the company can then “save” the purchase of separate insurance policies for employees if they are already covered by the credit card.
A credit card should still have a special feature for employees if it is used for both business and private use: credit card providers sometimes allow a division into private and business sales, which gives a better overview of the billing, while at the same time the benefits of one for all expenses Bonus program can be tasted. This also makes later expense reporting easier. In some cases, so-called co-branding cards, for example from the airlines, still allow free upgrades to a higher seating class. Such advantages can make the conclusion and use of the credit card more attractive.