How democratising corporate cards enables business to tap into a host of benefits

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We have entered the era of the employee experience. In efforts crossing industries and markets, we have seen regional companies work to accommodate diversity and inclusion, carbon-emissions reduction, waste management, and a range of others.

But while catering to workforce preferences, companies have also taken steps to assure their employees that they are seen as individuals.

Businesses now offer flexible work and better insurance coverage. Their sustained efforts to promote wellbeing, even going so far as to offer AI-powered nutritionist apps, have been well received by their employees.

Now enterprises look to the future, to the next wave of innovation that will enhance the employee experience. One potential addition is the corporate card, seen widely as an exclusive benefit reserved for senior executives at larger corporate entities. The company offers the executive what is essentially a line of credit for a range of uses — travel, for example, or entertaining clients — and pays the bill within certain agreed parameters.

But let us consider what might happen if we widened the use of corporate cards. Our world has changed. Employees across salary brackets face those changes on a daily basis.

Take fuel expenses as an example. Our data shows that staff fuel reimbursements for UAE companies increased by more than a third (38 per cent) between January and June 2022. Of the employees entitled to such settlements, not all will have access to a corporate card. And they will have to wait days, weeks, or more for reimbursement.

An overdue transition

Likewise, as travel volumes return to their pre-Covid levels, employees will need to book flight tickets, hotel accommodation, and pay for meals, taxis, and other related necessities. We should also consider software-as-a-service and the monthly subscriptions these services entail. Employees have no desire to be out of pocket, waiting for drawn-out approval workflows to process their claims. In the current economic climate, they would prefer their cashflow was not constrained by the act of doing their job.

So perhaps it is time that the corporate card made its overdue transition from the exclusive domain of the five-star brunch to the broader purpose of supporting the experience of all employees. Corporate cards have the potential to solve a lot of issues for organisations.

The fact that many fintech suites now cater for expense management is a sign that the corporate card can fill a gap. But to plug the gap, the cards themselves must change. In many cases, corporate cards are simply company-branded credit cards and employees are ultimately liable for any debt incurred. As such, we also often see finance departments asking for down-payments as guarantees to cover potential expenses.

If companies stick with these systems, or restrict corporate cards to only top-level employees, they potentially miss out on an opportunity to simplify their accounting processes, reduce friction between employees at different levels of seniority, and increase employee satisfaction in the short, medium, and long terms.

1. Simplified accounting

Every month, finance teams sift through reams and reams of receipts and forms to verify expenses claims and honour reimbursements. This legacy workflow is arduous, long, and error prone. By introducing a corporate card, businesses can smooth out the reimbursement process to ensure employees are not out of pocket whilst tracking any expenses in real time. The business retains control of how much they want to prefund in the cards. And they can set limits, at an individual card level, on how much can be spent under what circumstances, and also stipulate what types of items can be purchased.

For business-critical transactions such as client dinners and the purchase of SaaS subscriptions, the corporate card is also a way of ensuring that the business can fund the employee in any matters that have legitimately to do with business. With a personal credit card, circumstances may prevent such transactions and end up being detrimental to business continuity.

2. Real-time insights

Corporate cards that are defined and operated in the right way will deliver a new level of control to the finance team and each employee. Neither will now run the risk of having a slew of unforeseen expenses rack up. End-of-month bill shocks will be all but eliminated and everyone will be able to manage expenses more adroitly.

This is not a theoretical vision. There exist today new breeds of corporate cards that can be easily managed and monitored in real time via centralised dashboards. They offer instant visibility and significantly more control through real-time tracking. With this visibility, budgeting for each card’s limit is unnecessary. We can allow for a cash pool that fits the spending we are seeing, leading to benefits for cashflow.

We can see from the dashboard how and where money is being spent, so this allows us to gain an understanding of spending behaviour and plan for the future. And corporate-card platforms are not just passive dashboards. They can automatically send alerts to employees to warn them they are approaching their limits or inform them of unusual spending.

3. Enhanced employee experience

The modern approach to corporate cards leads to significant improvements in employee satisfaction. Employees are never out of pocket, and they never face the stress of personal liability when they cannot pay the funds immediately. The UAE is moving towards becoming a cashless economy. In such an environment, corporate cards make it easier for employees to pay for the goods and services they need to do their jobs.

Corporate cards -The right choice

Amid inflation, companies must carefully consider the card they choose. Prepaid options offer flexibility while mitigating risk. But if they choose well, then the act of extending the corporate card’s use to all employees will bring a range of benefits that will boost productivity in finance and increase wellbeing everywhere else.

Rob MacTighearnain is the CFO at Bayzat