Company credit cards can be a challenge for SMEs without a dedicated finance team managing them. But with the right strategies in place, business owners and managers can use company credit cards to streamline expense tracking and control spending effectively.
Our outsourced bookkeeping experts share some practical tips to implement a company credit card system that works for your business, helping you manage your cards effectively and avoid common pitfalls.
Implementing a Company Credit Card System
Company credit cards can simplify the tracking of employee's business-related expenses . However, they come with their own set of advantages and challenges.
Pros of Using Company Credit Cards:
- Easy Tracking: All business expenses are on one card, making it easier to manage and track.
- Control: You can set spending limits and restrictions for different cardholders.
- Convenience: Employees can make purchases quickly without going through a lengthy approval process.
- Rewards and Benefits: Many credit cards offer rewards, cashback, or travel points which can benefit the company.
Cons of Using Company Credit Cards:
- Misuse Risk: There is a risk of personal expenses being charged to the company card.
- Overspending: Without proper controls, employees may overspend.
- Management Burden: Keeping track of multiple credit cards can be time-consuming.
How to Manage Multiple Company Credit Cards
If you have several employees with company credit cards, here are some tips to manage them effectively:
- Set limits for each cardholder based on their role and needs.
- Monitor transactions regularly to ensure compliance with company policies.
- Use expense management software that centralises reports from all cardholders, making it easier to track overall spending.
- Require all cardholders to submit receipts for their expenses. Digital receipt storage can simplify this process.
- Conduct periodic audits to ensure there is no misuse and to reconcile the expenses.
Make the Right Call with Your Company Credit Cards
With the right tools and policies in place your business can benefit from the convenience and efficiency of credit card usage without the associated risks.
No matter what stage your business is at, having a structured company credit card system can help maintain control over expenses and foster financial discipline among employees. Consider exploring outsourced bookkeeping expertise to manage your cards efficiently, giving you more time to focus on the things you do best.
Need help with managing company credit cards? Reach out to our Melbourne bookkeepers via the form below or explore our monthly bookkeeping services today.
