All You Need to Know About Building Your Corporate Card Expense Policy

Written by
Alvin Ip
Last Modified on
December 19, 2023

For the longest time, expense reimbursement has always been the default method of managing company expenditure. But corporate business cards have changed the game. In most countries, founders in larger companies would distribute cards to key employees of the firm to spend on authorised business expenses. 

If you’re an individual employee, this may not be the best time for you to get a corporate card just yet. But if you’re at the stage of your business growth where you’re ready to scale and expand, now may be the best time. 

What are corporate cards and how do they work?

To build a policy around corporate card expenses, we need to understand the purpose and benefits of corporate cards for startups in the first place. For founders who have expanded their business exponentially, it’s impossible for them to handle each and every transaction for the company, considering the greater responsibilities they have to take care of. That’s where corporate cards come in. 

Business credit cards for startups can be used for just about any and every business expense (as long as they’re approved, of course). From transportation costs, business lunches, recurring software subscription fees, equipment upgrades—you name it. Since these cards are issued by the employer, the company’s name will be displayed on the card along with a designation for the approved cardholder. 

Typically, not all employees are entitled to a business credit card. Only those with high-level roles in the organisation such as managers, directors, or executives will be issued one. This ensures that employees no longer have to spend out of their own pockets and go through the tedious reimbursement process. 

Why do we need a corporate card expense policy? 

Having a policy in place for employees issued with their own corporate business card safeguards the company’s business expenses against fraud and abuse. It ensures that it will not be used for personal expenses and will only be used for official business on the company’s behalf. This will apply to all corporate business card holders and approvers of the cardholder’s acquittals. 

Things to include in your corporate card expense policy 

When creating an effective and concise policy, the following information should be included (but not limited to):

  • Start date of corporate credit card policy 
  • Eligibility requirements of cardholders 
  • Description of the type of credit card issued 
  • General terms of use 
  • Responsibilities of cardholders 
  • Specified spending limits
  • Allowable purchases 
  • Expense reporting requirements
  • Process for reclaiming corporate credit card expenses
  • Consequences of corporate card misuse
  • Contact information of policy manager

Corporate Business Card Policy Best Practices 

  • Evaluate who has access to your cards 
  • Define the spending limits 
  • Streamline the approval process 
  • Utilise business spend management software

1. Evaluate who has access to your cards

Choosing who has access to your corporate credit cards is the first step in this process. Policy managers have the liberty to choose from the following options: 

  • Only employees with seniority levels will get a card 
  • All employees get access to a corporate card 
  • All employees will be issued with their own corporate card, but with restricted spending limits 

Decide on the policy option that works best for you and your business and ensure that it ultimately meets your needs. 

2. Define the spending limits

The next step in developing your corporate card expense policy is setting spending limits for employees. In every organisation, there won’t be a one-size-fits-all spending limit. Again, it’s all about finding what works best for your business and team members. For instance, you can set tiered limits based on seniority, or perhaps on a per-item or cumulative basis. 

Along with setting spending limits, your company’s expense policy should also define corporate card usage exceptions on a case to case basis. Expenses like client entertainment, corporate travel or emergencies may need additional approvals from policy managers—ensure that your policy specifies these exact circumstances. 

3. Streamline the approval and claims process

Do you need certain employees to seek higher-level approval before using their corporate cards? This is just one of the few questions you need to ask yourself when defining the approval process. Although the approvals generally lower the risk of card misuse, they may also slow down the flow of purchases. 

Besides the approval process, companies need to set out claims processing for reimbursable expenses as well.

4. Utilise business spend management software

To prevent out-of-policy purchases, make use of spend management software to manage and track non-payroll business expenses. This includes everything from marketing expenses, software subscriptions, logistical equipment, and so on. 

By collecting and analysing data spend in real-time, these tools allow policy managers and key personnel to gain insights into company spending across the entire business. Besides tracking business expenditure, such management software helps companies avoid overspending as well. 

To get started with your initial draft, here’s a simple template to follow.

Looking for a business credit card for startups? 

Laying down all the groundwork in black and white may seem like a lot of work. But this is an essential step for those who wish to explore business credit cards. 

Once you’ve created your expense policy, all that’s left is to share this with your key employees. If you still haven’t found the ideal corporate business card for you, why not give the Aspire Virtual Card a go? 

Explore a variety of features that will streamline the way you manage your business finances for teams. From multi-user access to maker-checker workflows, rest assured all your needs will be met.

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About the author
Alvin Ip
is a finance leader. He masters business strategy, fund raising, business intelligence, corporate finance and scaling finance teams for growth. He has been a CFO & CEO for multiple businesses and has worked with brands like Varde Patners, PwC Singapore, EY France & more. In his free time, he shares his experience & expertise to help businesses learn and grow.
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