What Are Employee Credit Cards?
Employee credit cards are charge cards issued to employees by their employer. The cards allow the employee to purchase goods and services as they would with any other credit card except that the charges are billed to the employer’s account. The employer typically has the ability to set parameters that could limit spending, purchase categories or time periods within which the card can be used.
What Are The Pros Of Employee Credit Cards?
- Ease Of Expense Tracking - Employee credit cards give employers real time access to every transaction made. Combined with limit setting tools, employers have much more control over expenditures compared to petty cash funds or monthly expense reporting.
- Fewer Accounting Procedures - Employee credit cards save time for both the employee and the accounting department as they remove the need for expense reports, reimbursement checks and data entry tasks. All transactions are recorded upon card use which automates several accounting functions.
- Reward Programs - Many employee credit cards come with rewards programs that offer cash back systems or other perks. As these benefits increase with card use, paying for business expenses using the card can result in valuable bonuses.
What Are The Cons Of Employee Credit Cards?
- May Encourage Spending - It’s possible that an employee may feel more inclined to spend when their credit card charges don’t end up on their personal statements. Without an explicit expense account policy or adequate spending controls, credit cards may make it easier for the employee to make unnecessary purchases.
- Potential For Employee Misuse - An employee credit card may tempt an employee to make personal purchases on the business account. Without adequate monitoring, spending policies and card controls, there is the potential for employee misuse or outright fraud.
- Credit Card Theft - As a company issues more employee credit cards, the chances that they go missing or the card numbers become compromised increases. Although purchases made with stolen credit card numbers rarely result in the victim being charged, the breach of security can create a hassle.
Emburse Employee Credit Cards
The Emburse expense management system now supports employee credit cards. If you’d like to learn how your company can take advantage of these latest offerings, contact Emburse for a free demo today.