What to consider when choosing a corporate card program

Expense reports shouldn’t feel like another job—chasing receipts, waiting on reimbursements, and dealing with surprise expenses slow down your team and disrupt cash flow. A corporate card program streamlines spending, giving your employees a hassle-free way to pay. 

More businesses are adopting these programs to simplify reporting and enhance security, but there are several to choose from. This guide will explain the essentials of corporate card programs and some factors to consider when you’re making this important choice.

What’s a corporate card program?

A corporate card program allows businesses to issue credit cards to employees for work-related expenses. These cards help companies track spending, reduce the need for traditional reimbursement procedures, and simplify financial management. They’re commonly used for business travel and client entertainment but can also be useful for office purchases. For example, if your company planned an offsite meeting, you could monitor employee expenses in real-time during the trip. This would give you visibility into costs like accommodations, supplies, and unexpected charges.

Benefits of having a corporate card program

A well-managed corporate card program offers several advantages, including:

• Simplified expense tracking: Real-time tracking eliminates the need for employees to submit receipts manually. Many providers also offer integrations with expense management software, making financial reporting more straightforward.
• Improved cash flow management: Corporate cards help businesses manage cash flow effectively by extending payment cycles. Instead of paying upfront, companies can use the card to settle expenses once the statement is due.
• Enhanced security and fraud protection: Built-in fraud detection and spending controls allow businesses to take immediate action to prevent financial loss. if suspicious activity occurs.
• Easier employee expense management: Giving employees corporate cards makes accounting easier by reducing paperwork and eliminating reimbursement delays. Transactions are recorded in real-time, so businesses stay organized and keep  accurate financial reports.

Types of corporate cards

These are some of the most common corporate card options.

Individual liability cards

With individual liability cards, employees pay the balance. They use the card for business expenses and then submit an expense report for reimbursement, subject to company approval.

This card is ideal for companies that want employees to be accountable for their spending while still using a business credit card.

Corporate liability cards

Corporate liability cards place the financial responsibility on the company rather than the employee. The business pays the card balance directly, ensuring employees don’t have to cover expenses out of pocket. 

This option is ideal for companies that frequently pay for travel, client entertainment, or operational costs. It also reduces administrative burdens, as employees don’t need to go through a reimbursement process.

Virtual cards

Businesses can issue virtual (digital only) cards for online expenses, like subscriptions or supplier payments, and set limits to prevent unauthorized spending. Having everything online provides an extra layer of security since they can be easily created, restricted, or deactivated as needed.

How to get a corporate card for your business: 3 steps

Follow these three steps to set up a corporate card program.

1. Assess the company’s needs

Before choosing a corporate card program, identify the primary reasons your business needs one—this will help you avoid unnecessary fees or restrictions. Consider whether employees will use the card for travel expenses, office supplies, client entertainment, or all of the above. You should also evaluate how many employees need cards and determine appropriate spending limits.

2. Research different providers

Research various providers like banks, fintech companies, and business card providers. Check their websites to compare their interest rates, annual fees, and card rewards for businesses. Ask your bank's representative for tailored options if you already have a business banking relationship.

Look for options that offer corporate credit card management tools, such as expense tracking, fraud protection, and seamless integration with your existing accounting software. Reading customer reviews and speaking with providers also helps you make an informed decision.

3. Apply for the corporate card program and set limits

Once you’ve chosen a provider, apply for the card directly through them. You’ll be asked to provide your company’s financial details, like your revenue and credit history. The provider will issue the card, which will run on platforms like Visa or MasterCard. 

When setting up the program, define the scope of your credit based on your company’s budget and employees’ spending needs. Decide who gets a card and set appropriate limits to prevent overspending—these help manage cash flow and ensure responsible use of company funds.

Factors to consider when implementing a corporate card program

To ensure the success of your corporate credit card program, follow these best practices.

Spending controls and limits

 In addition to credit limits, providers can allow companies to set custom restrictions, such as blocking specific merchant categories or limiting daily transaction amounts.

Expense tracking and integrations

Choose a corporate card program that works with your accounting software for real-time expense tracking. Engine’s dashboards and reporting provide businesses with clear insights into spending patterns, helping them budget effectively and reduce unnecessary costs.

Security and fraud protection

Corporate card programs have built-in security features to protect against fraud. Options like virtual cards requiring tiered sign-ins for activation, spending alerts, and AI-powered fraud detection help safeguard your funds. Many providers also allow businesses to set up automatic notifications for unusual spending activity.

Manage your corporate card program with Engine

A corporate card program is valuable for managing business expenses, especially in travel-heavy industries. 

Engine provides an all-in-one platform to help companies manage travel costs and improve financial controls. Our platform works with your corporate card program so you can strategically maximize rewards, simplify financial management, and reduce the workload associated with booking and paying for travel.

Start leveraging the power of corporate cards with Engine for smarter, more efficient financial management.

FAQ

Do corporate card programs benefit remote or distributed teams?

Yes—virtual corporate cards provide a secure solution for online transactions that are issued for specific purposes, such as software subscriptions or supplier payments. They can be managed and monitored in real-time, making them a flexible and secure option for companies with employees working from various locations.

How can I ensure my team is using their corporate cards responsibly?

Establish clear policies and spending limits based on employee roles to ensure responsible use. Regularly monitor expenses through integrated software or reporting tools and provide training on appropriate usage. Alerts for unusual spending patterns or exceeding limits can also help keep spending in check.

How can I avoid hidden costs associated with corporate card programs?

There are many hidden costs that can be an unwelcome surprise for your company:

• High interest rates
• Late payment penalties
• Foreign transaction fees
• Cash advance fees 
• Overlimit fees
• Penalty fees for returned payments 

To avoid these, pay off balances on time and choose providers with competitive fee structures. If your employees are using their cards in another country, make sure you approve the current exchange rate. Make sure the card’s terms and conditions are clearly communicated to your company’s cardholders.

Can employees use corporate cards for personal expenses?

No. Employees should only use corporate cards for work-related expenses to avoid fraud and simplify expense reports. Many companies have strict policies to ensure personal spending doesn’t mix with business expenses. 

Some programs also have mechanisms, like custom spending controls or transaction categorization, to prevent misuse and simplify cost monitoring.