I’ve never worked at a job where I had a business or company credit card. Never having had one I don’t know all of the nuances and terms that come with having one. Francis sent some of his explanations of commonly used terms over to me, which I am sharing with you with permission.
What is a business card?
A plastic business card is a payment tool that allows you to:
• carry out payments related to commercial, main and executive activities of the company.
• have control over employee spending.
• make accounting simple and transparent because banks provide you with reports which show the amount spent on the operation, currency, time, place of purchase, the card number, etc.
• reduce or even eliminate the turnover of accountable cash.
• optimize currency control, because in the transaction the spent funds are converted into the currency in which the account is opened.
The two most common kinds of cards are:
• Debit. They are inseparable from the account of the company;
• Credit. Each bank sets its own size of limit and defines the terms of repayment.
Corporate plastic cards are issued by legal entities. They are issued to certain people. The person is not responsible to the bank, that role belongs to the company. When you decide to open a business account, you must check with the bank and learn about the conditions on which they are granted. Making the right choice can be challenging, but reasearching the best credit cards Effectify offers will help you out.
There are advantages to having this type of card.
• The possibility of cash withdrawals and transactions in any currency.
• Binding multiple cards with individual limit for each to the account of the company.
• Payment of travel expenses. If an employee is sent abroad, the need for currency declaration eliminates. In this case, it’s especially convenient to have a credit card with a business class chip for the remainder.
• The transfer of the spent money on other cards.
However, there are some drawbacks as well.
• They are not accepted by all stores.
• An employee, who has returned from a business trip, needs to provide numerous receipts, checks and tickets.
Another advantage is that a business card offers protection from exceeding expenses. A legal entity, that owns the primary card, has an ability to control holders’ ability to spend money. To do this, select one of the following:
• Set the amount, agreed with the Bank, which the employee can withdraw per day or per month.
• Thanks to bank records it’s possible to control when and where the money was spent.
• Order individual named ones to the authorized persons. Then the control and protection of a plastic card are facilitated by the fact that no one else can use it.
Tips for using plastic business cards
1. To save money on corporate plastic card with a chip in case of loss or theft, you need to make sure it is covered by insurance.
2. If employee is leaving on a business trip abroad, issue a card in the currency of that country.