Using credit cards to cover company spending and employee expenses comes with unique drawbacks, which can leave businesses open to loss or fraud.
Credit cards give teams a quick and convenient way to cover everyday expenses. They’re a familiar payment method that can be used online, and in most shops, restaurants, and petrol stations. But using credit cards to cover company spending and employee expenses comes with unique drawbacks. As well as a lack of visibility and spending limits, employees often share credit card details to get purchases made, which can leave businesses open to loss or fraud.
Many businesses issue credit cards to only a few of their staff. This can make it more difficult for those without a credit card to purchase essentials – like equipment or software – that they need to do their day-to-day job. Employees often resort to sharing card details via email, text messages, or post-it notes. Then individuals waste time tracking down pieces of easily misplaced paper, asking around to see who last had the card, or trying to find someone who has a copy of the details. And if you’re managing a hybrid team, this becomes even more tricky.
Every person who shares card details might share them with someone else, who might share them with someone else. Before long, it’s difficult to know who has access to your card details and how they are using them. Every time the details are shared, they might fall into the wrong hands, leaving you open to theft and fraud.
When using credit cards, managers can’t set detailed spending limits beyond the credit limit. So, they can’t decide which merchants or types of spending credit cards can be used for. If the business doesn’t have a robust approvals process in place, employees might need to get spend sign-off via lengthy back-and-forth emails, to confirm what they can buy and how much they can spend. This inefficient manual admin wastes everyone’s time.
Even if spending is agreed, managers don’t get full visibility over exactly what’s being spent until month end. Perhaps the price of an item changes or a team needs more software subscriptions than they originally thought. For many reasons, employees can end up spending more than was expected.
And even after they’ve made a purchase, they still need to deal with admin. Employees often waste time saving receipts so that spending can be reconciled. And finance teams spend hours at month-end sorting through every purchase. In short, credit cards don’t give managers visibility or control over what employees are purchasing, and they generate piles of paperwork.
With spend management platforms like Soldo, there’s no need to share card details. Managers can issue pre-paid cards to every individual or team to cover regular spending. And if there’s a last-minute ad-hoc purchase that’s needed, temporary card numbers can be issued instantly for online purchases.
It’s easy to set different spend limits for individual cards. Whether that’s daily, weekly, or monthly limits or restricting cards to specific kinds of merchants or kinds of spend – like fuel. That means employees can’t got over budget. They can only spend the amount that’s been pre-loaded onto the card.
What’s more, finance teams don’t need to wait for month-end to get a complete view of spending. With Soldo’s web console, they can see spending in real-time, so they know exactly what’s been bought as it happens. Soldo’s automated system removes the need to save receipts. Instead, employees snap a photo of their receipt with the Soldo app at the point of purchase. That means, finance teams don’t need to waste time chasing up lost receipts or missing information when it comes to reconciliation.