Ultimate Guide to Corporate Credit Cards: Top Picks and Benefits

Corporate credit cards offer a business the chance to increase spending power, enhance expense management, and gain greater control over finances. In today’s fast-moving economic landscape, managing expenses is especially crucial, whether you run a large enterprise or a small startup. In this context, corporate credit cards have emerged as invaluable tools that empower companies to streamline their operations and enhance cash flow management.

Switching to a corporate card (sometimes called a commercial credit card) can be the smartest move you make. They provide employees with greater flexibility, help monitor expenses, and nurture supplier relationships.

In this article, we put the microscope on corporate credit cards, including the myriad of benefits, basic functionalities, top brands, expense management tools, and how they can be a game-changer for your company’s success.

What is a Corporate Credit Card?

A corporate credit card is a type of payment card issued by an organization for the purpose of covering business purchases. It enables staff to incur expenses on behalf of the business, without using their own money or personal credit score. 

These types of cards are distinct from personal credit cards as they are designed to streamline expense management, employee spending, and business finances.

Most major credit card companies provide corporate credit cards, including Capital One, Chase, American Express, JPMorgan, and Wells Fargo. Many of the larger brands direct their corporate credit cards towards large corporations with millions in annual revenue. This can make it difficult for smaller businesses to qualify.

Key Features of a Corporate Credit Card

Employee cards that classify as corporate credit cards, typically offer the following:

Spending Limits

Corporate cards enable a business to set spending limits in order to control the amount employees spend. This ensures compliance with company policy and prevents overspending.

Expense Tracking

Corporate credit cards come with features that allow for tracking and reporting expenses. This can include digital receipts, transaction records, and online expense management platforms. 

Employee Benefits

Corporate credit cards can offer employees certain benefits like rewards programs, travel insurance, discounts, rewards points, travel rewards, and more. These benefits can vary depending on the issuing bank or financial institution. 

Payment Responsibility

While staff uses a purchasing card for business expenses, the responsibility for repaying the balance lies with the business. Employees are generally not held responsible for any credit card debt, though they are expected to follow company spending policies. 

However, some terms apply, like when a card is used for unauthorized purchases. In this case, a company is liable to hold an employee responsible, whether that is through repayment or termination of employment. 

Expense Reports

Organizations can easily manage and monitor expenses made on corporate credit cards. This simplifies reconciliation and generating expense reports.

Vendor Relationships

Companies might negotiate better terms with suppliers and vendors by using corporate cards. This can result in better pricing, discounts, and preferential treatment for increased transaction volume. 

Data Security

A company can establish security protocols and measures for corporate credit cards, ensuring sensitive financial data is always handled appropriately.

Travel and Entertainment

Employee credit cards are often used for travel and entertainment expenses, including airline tickets, meals, hotel stays, and conference fees.

It is important to note that corporate credit cards are always subject to company guidelines and policies. Staff using these cards are expected to follow these rules and use the cards for business expenses only.

What are the Benefits of Corporate Credit Cards?

The advantages of a corporate credit card program can be viewed from two perspectives: the business and the employee.

For Companies

Enhanced Financial Controls

Companies can set spending limits on corporate cards, ensuring staff adhere to budgetary guidelines, and it also prevents overspending.

Expense Management

Corporate credit cards simplify spend management and the tracking of business expenses. Detailed transaction records and online platforms help to streamline the reconciliation and reporting process.

Reduced Personal Risk

Unlike business credit cards, corporate credit cards do not require business owners to sign a personal guarantee. This means that a business owner’s personal assets are not on the line should an employee misuse the card. 

Approval is based on a business credit score (among other factors), and everything is recorded on a business credit report.

Detailed Analytics and Reporting

Corporate cards offer robust reporting tools that enable a business to analyze spending patterns, identify trends, and make more informed decisions based on real-time data. Employees can also file expenses electronically, saving time on reports. This type of detailed data helps a business better manage spending habits and allocate resources more effectively.

Improved Vendor Relationships

Corporate cards help to establish better terms with vendors and suppliers. This leads to more early payment discounts and preferential treatment due to high transaction volume.

Additional Company Benefits

• Faster reimbursement and reduced administrative burden
• Setting rules for employee spending, like spending limits
• Travel-related perks like lounge access, discounts, and subscriptions
• Helps to eliminate foreign transaction fees
• Cash flow management with centralized expenses

For Employees

Flexibility and Convenience

Employees can make business-related purchases without using their personal funds. This makes the expense process more flexible and convenient. It also reduces any potential accounting issues.

Faster Reimbursement

Corporate credit cards eliminate the need for staff to wait for personal funds to be reimbursed. This gives them quicker access to business funds.

Travel Benefits

Staff can enjoy more travel-related benefits like travel insurance, airport lounges, and discounts on flights and hotels.

Rewards and Incentives

The majority of corporate cards offer rewards programs that enable employees to earn points, miles, and cashback on business-related purchases.

It’s important to note that the benefits of corporate credit card programs will vary depending on the issuer. Carefully consider business needs, policies, and card features before choosing a suitable option.

How Does Corporate Credit Card Spend Work?

For the most part, corporate credit cards function a lot like personal credit cards or small-business credit cards. A corporate credit card can be used to make purchases for a business and has the potential to earn rewards on corporate purchases. 

A company must make regular payments on the corporate credit card account, and they must be on time. Corporate credit card spend and payment history will both factor into your business credit score. 

These cards also come with features that small-business credit cards may not offer. This includes the ability to issue employee credit cards without having to assume personal liability for the charges. 

Corporate credit cards tend to come with access to accounting software and services designed to help a business manage a corporate line of credit. These cards are also known to offer discounts on common business expenses from popular retailers. Other perks may exist, like no annual fee, cash advances, gift cards, or point systems.

Who is Involved?

When it comes to corporate credit cards, everyone has their hand in the cookie jar. Several parties are involved in the process of corporate credit card spending to ensure transactions are conducted smoothly, expenses are properly recorded, and company policies are upheld.

The key stakeholders include:

Management and Leadership

This is where the concept of corporate credit cards is born. Company executives and management establish corporate credit card guidelines, policies, and spending limits. They provide oversight to ensure spending aligns with the company’s financial objectives and goals.

Accounting Department

The finance and accounting department then take the lead. They are responsible for a company’s financial resources, including corporate credit card expenses. This team will oversee expense reconciliation, ensuring accuracy in financial records and managing the payment of credit card bills.

Authorized Cardholders

Authorized employees who have been issued corporate credit cards are responsible for making business-related purchases. They adhere to company spending policies, maintain proper documentation, and accurately categorize expenses.

Human Resources

The HR department is often involved in the issuance and management of corporate credit cards. They determine who is eligible to receive a card based on roles and responsibilities. 

Credit Card Issuer

Also known as the provider, this is the financial institution that issues corporate credit cards and provides the associated credit line. They typically offer online access for cardholders to review transactions, set spending limits, and manage their account.

Additional Roles 

Other parties that may be involved in a corporate credit card program include:

• IT and security teams that ensure compliance and protect data
• Internal auditors to periodically review transactions and policies
• Treasury and cash management to monitor outgoing payments
• Travel and procurement departments to manage travel expenses
• Approval authorities for certain types of expenses

Step-by-Step Process

Corporate credit card spending works in a controlled and structured manner. Here is a quick step-by-step process:

#1) Issuance and Authorization

Companies issue corporate cards to authorized employees. Each cardholder is assigned spending limits that could be daily, weekly, or monthly.

#2) Purchasing

Cardholders use the cards to make business-related purchases like supplies, travel expenses, equipment, and more.

Transactions are made the same way as a personal credit card, including physical swipes, chip-and-pin transactions, contactless payments, and online purchases. 

#3) Expense Categorization

Many corporate credit cards provide the option to categorize expenses at the time of purchase. This helps in organizing transactions and generating reports. 

#4) Tracking and Reporting

Detailed transaction records are generated for each purchase. Cardholders are typically required to provide a description of the expense and its purpose, to aid in tracking.

Cardholders may also be required to attach documents or digital receipts for each transaction. This aids in expense verification and supports accurate recordkeeping.

#5) Expense Management Tools

Some businesses use software to manage their corporate credit card expenses. These tools enable employees to upload receipts, generate expense reports, and categorize expenses. 

#6) Extra Approvals

Depending on a company’s policies, expenses might need to go through an extra approval process. This ensures all transactions comply with company guidelines and are necessary for business operations.

#7) Reconciliation Process

The reconciliation process involves cross-referencing transaction records and credit card statements with a company’s financial records. This helps to identify discrepancies and resolve any issues in real-time.

#8) Expense Reports

It’s up to the employees to compile expense reports. This includes a summary of all business-related transactions made with a corporate credit card during a specific period. These reports are typically submitted to the appropriate department for review and approval. They also help to facilitate spend analysis and forecasting.

#9) Payment and Reimbursement

The business pays the credit card issuer for all approved expenses incurred by staff and corporate card users.

#10) Ongoing Monitoring and Analysis

A business may conduct periodic audits of card spending to ensure compliance with company policies and identify any areas of misuse.

They can also run reports to analyze spend patterns, trends, and other data derived from card transactions. This helps a business make more informed decisions about budgeting and resource allocation.

Risks Associated with Card Spend

When it comes to corporate credit card spending, there are some risks involved for both companies and employees. It’s important to be aware of these risks in order to implement proper controls and strategies. 

Some of the key risks involved with corporate cards include:

Fraud and Misuse

This is the number one risk for corporate cards. Lack of oversight and weak internal controls can lead to rogue spending. Staff can misuse the card for personal expenses or engage in unapproved activities. 

Employees may intentionally or unintentionally violate company spending policies, like exceeding spending limits or making unauthorized purchases. 

Vendor Disputes

Disagreements or miscommunication with vendors regarding payments made with corporate cards can lead to payment disputes and even harm the relationship long term. 

Data Breaches

Anytime you store sensitive financial data, there is a risk of data breaches. This can lead to theft of credit card information or, worse, potential identity theft. 

Late Fees

Failing to make timely payments on credit card transactions can result in late fees and accrued interest, leading to additional costs.

Lack of Visibility

Inadequate tracking and reporting can prevent a business from identifying spend patterns and making more informed decisions. If documentation is not properly managed, there can also be a lack of transparency in how funds are being used.

Additional Risks

• Employee overspending and budgeting issues
• Non-reimbursed expenses if expense reports are not submitted on time
• Dependency on individual cardholders can cause disruptions if they leave
• Tax and regulatory compliance issues result in inaccurate reporting

Top Corporate Credit Cards of 2023

Now that you have a brief understanding of corporate credit card management, it’s time to examine some solutions. Here are the top corporate credit cards of 2023:

Tipalti

Tipalti offers a business card solution called Tipalti Card that is available in physical and virtual card formats. It integrates with one of the most comprehensive global financial automation systems, offering cash-back rebates for every dollar spent.

Tipalti Card provides finance leaders with an effective mechanism to manage business spending, cut costs, and bolster profitability. Achieve full control over card spend with automatic reconciliation, with top-tier ERP integrations, managing all types of expenditures in one spot.

The Tipalti Card solution is distinctly designed to handle card-based transactions within the Tipalti ecosystem, introducing exclusive benefits that are specific to card-based payments. 

You also earn a cash rebate for every dollar spent using the Tipalti Card. The more transactions you make, the more cash back you earn.

Key Features

• Employee Friendly: create cards on-demand with robust controls and approvals
• Control Spend and Reduce Fraud: Spend limits, vendor limits, approved categories
• Pre-approve Purchases: Card request approval workflows
• Auto Reconciliation: Reduce manual workload
• Centralize Spend: Manage all payment methods in one place

Airbase

Airbase provides a virtual corporate credit card solution that can be used with single or recurring payments. The platform is SOC 1 and 2 Type II compliant, meaning every single transaction is secure and meets the highest industry standards.

Airbase users enjoy a controlled and streamlined process, where all card details sync to your general ledger. The brand offers unlimited cash back across all your categories of spend, with zero promotional periods. 

When team members generate a virtual card for one-time or recurring payments, a full AP audit trail is generated. This eliminates the hassle of overspending and reduces overspending.

Key Features

• Unlimited cash back on every dollar spent
• All transactions automatically sync to GL
• Spend management tools like payment scheduling
• In-depth reporting and analytics features
• Automatic fraud detection alerts

Coupa

Coupa enables companies to take control of spend and eliminate one-time supplier onboarding by paying with a virtual corporate credit card. Businesses can pre-approve card spend, automate reconciliation, and reduce invoice processing volume, all with one simple solution.

Teams can focus on more strategic tasks with the Coupa virtual credit card. Enjoy the benefits of paying with a card, without the inefficiencies of a physical card. It can never get lost or stolen, for one.

A business can use the Coupa virtual credit card to pay one-time suppliers, while automating manual coding and reconciliation. 

Key Features

• Unlimited cash back with longer payment terms
• Optimize working capital and extend DPO
• Gain greater control and visibility, eliminating P-card spend
• Automate approvals and reconciliation to reduce manual tasks
• Reduce invoice processing volumes in one spot

Bill.com

Bill.com offers a virtual card for businesses to earn rewards and better manage cash flow. Pay vendors by credit card, even when they don’t typically accept them. Defer payments can give the AP department more time to settle debts and free up cash flow.

When a business uses the Bill.com virtual card to pay vendors, they can collect all their favorite perks, like points, miles, and rebates. Reduce errors and cut down on manual data entry with automatic syncs and integrations with leading accounting software platforms. 

Automate everything from capturing invoices to streamlining approvals. Decide which bills you want to pay by card, and add your Visa, Mastercard, American Express, or Discover. Bill.com will charge your card for the payment (industry standard of 2.9% transaction fee) and then pay the vendor via check, ACH, or virtual card. 

Key Features

• Pay vendors who don’t normally accept credit cards
• Earn unlimited rewards like points, rebates, and miles
• Increase efficiency and save time by automating the payables process
• Freedom to pay how you want, using credit card, ACH, wire, etc.
• International card payments will deposit in vendor’s account

Ramp

Ramp offers an all-in-one corporate credit card that gives an organization a fast and easy way to manage expenses. The business card also offers expense management software with smart limits, controls, and more.

Ramp is one of the fastest-growing business card solutions on the market. Gain full visibility on all your spend with one intuitive platform, from paying invoices to managing disbursements vs. reimbursements.

Say goodbye to expense reports with mobile receipt capture and automated receipt collection. Limit expenses on any physical or virtual card to empower employees to spend responsibly and within the budget. 

Key Features

• 20x higher credit limits than traditional options
• Designed for teams of any size to meet multiple business needs
• Issue additional physical and virtual cards at no extra cost
• Lock any card and restrict spend with precise control
• Seamless receipt capture with highly rated mobile app (iOS, Android)

Navan 

Navan is an all-in-one corporate credit card and expense management solution designed to let you slice and dice expense data with unprecedented granularity. The system enables a business to increase spend control, run robust reports, and drive cost savings.

Gain real-time control and visibility, while eliminating the need for expense reports. Navan helps a business increase productivity and compliance, while strengthening employee relationships. Track expenses right as they happen and make expense management your superpower.

Accelerate month-end close with instant reconciliations and reduce manual work. Navan automatically captures, categorizes, and reconciles all transactions.

Key Features

• All-in-one travel, corporate card, and expense management solution
• Issue corporate cards or link existing card data
• Eliminate out-of-policy spend before it happens 
• Built for continuous close with automated reporting
• Proactive policies to monitor trends and uncover savings

Expensify

The Expensify corporate credit card helps track and manage expenses, whether you are a business of 1 or 1,000. Streamline the job of finance with a business credit card that completely automates expense tracking. Import and account for all company expenses without lifting a finger.

Gain control and insight over company spend while saving your team time and money. There’s a 1% cash-back rebate on every swipe with no fine print, minimums, or restrictions. New cardholders also get double cash back within the first three months.

Concierge Travel bookings include free travel safety services like medical advisory and emergency transport, available exclusively for Expensify cardholders. Teams can only spend money that’s in the business bank account. Your company decides whether to settle payments on a monthly or daily basis.

Key Features

• 1-2% cash back on every swipe with no restrictions
• Save 50% on your monthly Expensify bill
• Get approved in seconds and set up in minutes
• Smart Limits feature for better control over employee spend
• SmartScan program to receive IRS-guaranteed e-receipts

How to Choose the Best Corporate Credit Card for Your Business

Choosing the best corporate credit care involves looking at several factors that align with business goals, operational needs, and spending patterns. 

Here are a few quick tips to help you leverage cloud spend management and make a more informed decision:

1. Assess Business Needs
   Determine why your company needs corporate credit cards. Is it for travel, tracking expenses, vendor payments, or general operations? This will help you narrow down the exact features that are the most critical.
2. Evaluate Spending Patterns
   Analyze the company’s spending patterns. Where are the most expenses concentrated? Look for cards that offer rewards and benefits tailored to these patterns.
3. Consider Credit Limits
   Determine the appropriate credit limits for different employee roles. Some may need a higher limit for travel expenses, while others can manage with a lower limit.
4. Rewards and Rebates
   Look for a corporate credit card that offers cashback, rewards programs, points, or travel-related benefits that align with business needs.
5. Accepted Locations
   Check the card’s acceptance network to ensure it’s widely accepted both domestically and internationally, especially if your business involves transactions globally.
6. Fees and Interest Rates
   Compare transaction fees, annual costs, late payment fees, and any other charges associated with the card. Also consider the interest rates in case of carrying a balance.
7. Integration with Accounting Software
   If your business already uses accounting software, make sure the corporate card you choose integrates seamlessly so you can track and monitor expenses.
8. Security Features
   Choose a card solution that offers robust security features like account monitoring, fraud protection, and liability for unauthorized transactions.
9. Employee Training and Education
   Choose a card that comes with educational resources on responsible card usage, policy adherence, and reporting procedures.
10. Review Terms and Conditions
    Carefully read through all terms and conditions associated with the card, including payment deadlines, interest rates, and any applicable penalties.

Additional Features to Consider

• Expense tracking and reporting features to facilitate expense management
• Flexibility and customization for spending limits and virtual cards 
• Responsive customer support by the credit card issuer
• Card issuer reputation with strong security measures

If needed, a business should consult a financial advisor or expert to assist with comparison shopping. They can give you personalized recommendations based on business needs and priorities.

How to Get a Corporate Credit Card

Obtaining a corporate credit card involves a series of steps for both the company and the employee. Here are a few ways to prepare for a corporate credit card:

For a Business

#1) Develop a Need

Determine why your business needs a corporate card and identify the specific departments and roles that require a card. Also, consider the purposes for why they are needed and what they will be used for.

#2) Create a Policy

Create a corporate credit card policy that outlines things like:

• Card usage
• Spending limits
• Documentation requirements
• Reporting procedures

Make sure these policies align with company goals and objectives.

#3) Choose the Issuer

Research and select a financial institution or credit card issuer that offers corporate credit card programs. Consider factors like benefits, rewards, fees, and customer support.

#4) Negotiate Terms

Work with the card issuer to negotiate terms that match business needs. This can include setting spending limits, defining rewards programs, and agreeing on fees.

#5) Set Up Controls

Implement internal controls that will help to monitor and track card usage. This should include spend tracking, approvals, and regular audits.

#6) Communicate the Program

Inform employees about the new corporate credit card program, the policy, and any procedures they must follow. Provide training to cardholders about expense reporting and responsible usage.

For the Employee

#1) Understand Company Policy

Employees should familiarize themselves with the corporate credit card policy, including categories of expenses, spending limits, and reporting requirements.

#2) Submit Application

If required, employees must submit an application to request a corporate credit card. This may involve providing personal and employment data.

#3) Adhere to the Policy

Staff should only use corporate cards for business-related expenses as outlined in the policy. They should avoid using the card for any personal expenses, as this can complicate accounting and create issues of misuse.

#4) Keep All Receipts

Employees should maintain accurate records of all transactions made with the corporate credit card. This includes keeping any required documents and digital receipts.

#5) Submit Expense Reports

Team members must follow all company procedures for submitting expense reports, including details and documents for each transaction. Expense reports should be submitted on time and in accordance with the reporting schedule.

By following these steps and adhering to company policies, both the business and the employee can effectively manage card usage and contribute to streamlined expense management.

FAQs

Summing it Up

As a business grows and evolves, the strategic use of corporate credit cards remains a vital tool. It helps to streamline expenses, enhance financial control, and facilitate further growth.

The advantages of a corporate credit card range from the potential for earning rewards to simplified expense tracking, cash flow management, and boosting employee confidence. 

There are various types of corporate credit cards available, but it starts with closely examining your business needs. Find top features that align with these goals and then explore the latest developments in expense management.

By carefully considering the insights and recommendations provided here, a business can harness the power of corporate credit cards to optimize financial operations, leverage accountability, and drive sustained growth.

When companies automate their AP processes, many select software solutions that only meet basic requirements. You need the right type of tools to support your corporate credit card program. Read more in The Ultimate Accounts Payable Survival Guide, to help you stay organized.