What is a business expense card and what are the benefits for an employer?

If you keep hearing mention of business expense cards and are not quite sure what they are, you’re in the right place to learn more. In this blog, we’ll explain the purpose and capabilities of a business expense card, and the benefits it can provide for you as an employer.

What is a business expense card?

A business expense card is a credit or debit card that’s set up to be used by employees, specifically for paying business expenses. They’re becoming increasingly popular in businesses of all sizes, because the costs of business expenses go straight onto the card, without employees needing to spend their own money and claim back their spend.

Expense management can be a frustration and distraction for firms of all sizes and all sectors. Paper based receipts, manual data entry of claims and unreconciled spend can all cause a headache for finance teams. 

The financial values are not necessarily huge, but the pain, delays and re-work caused by manual expense management can have a disproportionate impact for firms of all sizes.

How does a business expense card work? 

Business expense cards come in different ‘flavours’ - credit, debit or pre-paid. They operate in the same way as other cards in the market, and the way in which they are used and accepted is identical. 

The key difference is that employers have control over what types of spend are permitted as well as purchase limits. For example, Expend Mastercards can be used anywhere, anytime - but limits can be set, for example, to restrict spending online, at ATMs, or on non-working days. The cards can also be customised to specific employees, depending on their business spend needs, and have real time tracking for up to the minute visibility and control.

How are business expense cards issued to employees? 

Not all of your employees will be regular claimants of personal expenses.  If you have a large operations team, for example, they may have a few one-off purchases on an ad hoc basis, compared to a busy marketing team that have regular software subscriptions and event costs to pay for.

Sales teams, cross site training staff and managers are likely to be mobile and make business related purchases - for travel, meals, entertainment or business supplies. 

Business expense cards are set up and tracked through easy-to-customise expense management software, allowing you to monitor and manage expense spend. This means that it’s quick and easy to set spending limits and spend categories for different employees, according to your company’s expenses policy.

Can business expense cards improve financial control?

Yes. Business expense cards provide employers with better control over their business spending, with preset limits and restrictions for employees who use them.

Firms of all sizes can also benefit from the transparency and oversight provided by detailed transaction records and analytics. And technical features provide the ability to prevent unauthorised or out-of-policy spending.

How do business cards help to streamline expense management for my firm? 

Business expense cards simplify the tracking and reporting of employee expenses. The benefits are simple but powerful. Business expense cards eliminate manual expense claims and reduce time consuming paperwork, across your business.

The cards are fully integrated with expense management software for real-time monitoring and reporting of expenses. Control and reporting can be as granular as you choose, and with personalised spending allowances for each team member, they can use their allocated business expense card for daily, weekly, monthly, or one-off expenses. 

What are some other benefits of business expense cards?

Business expense cards well worth considering, to help financial control, streamline expense management processes and improve convenience for your employees. 

What do advocates of business expense cards say about them?

Moving to business expense cards can provide many benefits, but many business managers stick with traditional business expense management because they are familiar with it, and people like what they know. However, advocates of business expense cards will say they cannot understand why they didn’t make the switch sooner. 

Disclaimer: This is not legal, accounting, or tax advice - it's simply a guide. If you need help, check with your accountant or contact HMRC directly.