by What are Commercial Cards?
They can be used by employees to make purchases on behalf of their employer. The most common types of commercial cards include purchasing cards, travel and entertainment cards, and corporate liability cards.
Purchasing Cards
Purchasing cards are the most widely used type of commercial card. They are ideal for recurring expenses like office supplies, technology equipment, subscriptions and memberships. Employees can use purchasing cards to buy approved items and services directly from vendors. Purchases are then automatically tracked in the company’s accounting system through electronic logs of card transactions. This streamlines the purchasing process and eliminates the need to submit paper receipts and request reimbursements. It also improves visibility into spending which can help optimize procurement. Many companies set single and monthly transaction limits on purchasing cards to control spending.
Travel and Entertainment Cards
Travel and entertainment (T&E) cards are aimed at covering business trip costs like airfare, hotels, rental cars, dining and entertainment. They offer special perks tailored for travel such as travel insurance, airport lounge access and elite travel rewards. T&E cards are convenient for employees who regularly travel for work as they can pay for all trip-related expenses using a single card. Hotels and airlines also prefer Commercial Or Corporate Cards as they are less likely to encounter declined transactions compared to personal cards. Companies typically set separate spending controls for transportation, lodging and meals on T&E cards.
Corporate Liability Cards
Corporate liability cards differ from the other commercial card types in that the company rather than the individual employee is responsible for paying the charges. These cards are useful for companies that want tight control over spending and prefer centralizing payments. While corporate liability cards offer higher credit limits than personal cards, they are less commonly used due to the additional liability they place on businesses. Companies have to carefully monitor charges made using these cards to avoid risk of fraud and non-payment.
Managing Commercial Card Programs
Successfully implementing and overseeing commercial card programs requires the right tools and processes. Card issuers provide online account management platforms to help businesses set up accounts, activate cards, assign spending controls and monitor transactions in real-time. Spending data captured through cards enables companies to get granular insights into where money is being spent across different departments and locations.
Automated workflows streamline expense management by categorizing and approving transactions electronically. Companies can set various multi-factor authorization rules like single purchase limits, monthly totals by user and category. Account reconciliation is also faster with electronic receipt collection. Many issuers offer virtual card options to further enhance security by generating single-use card numbers for online orders.
Commercial or corporate cards offer valuable rebates and incentives that offset processing fees. Earned rewards can be redeemed for promotions, statement credits and cash back to subsidize program costs. Issuers regularly analyze client spend patterns to identify potential areas of savings through negotiated supplier discounts and contract rebates too.
Managing Large Commercial Card Programs
Larger corporations contend with additional complexities in managing massive commercial card programs encompassing thousands of cards and users globally. Holistic payment solutions are needed to integrate cards into existing ERP, expense and accounts payable systems. Issues like cross-border payments, currency conversions and compliance requirements increase as well.
Large card issuers have robust global capabilities and account management portals tailored for enterprises. More advanced reporting gives real-time insights into program spending data consolidated from different regions. Automated workflows help standardize approval processes consistently worldwide. APIs facilitate seamless payment data integration with internal systems for improved visibility and spend controls enterprise-wide. International payment rails ensure reliable global acceptance.
Corporate cards also support B2B supplier payment programs by leveraging virtual card numbers and batch payment features. This digitizes paper-based procurement processes and brings efficiencies for both buyers and suppliers through faster, more secure electronic funds transfer. Real-time controls mitigate payment risks and prevent costly errors too.
When implemented properly, commercial card programs deliver substantial benefits for businesses of all sizes through optimized procurement, streamlined expense management and enhanced payment security. Selecting the right card issuer and solutions tailored to an organization’s specific needs is key. Regular program reviews ensure cards continue adding value by identifying opportunities to maximize rebates, further automate processes and fine-tune controls as payment environments evolve. When leveraged effectively, commercial or corporate cards deliver impressive returns through improved working capital, procurement savings and process efficiencies.
*Note:
1.Source: Coherent Market Insights, Public sources, Desk research
2.We have leveraged AI tools to mine information and compile it
