Most people in today’s modern economies are familiar with the concept of credit cards. The benefits that people have come to expect are convenience, security and safety.
As well as the same broad range of benefits that private individuals enjoy, businesses can accrue other significant advantages by using Wallester Business corporate credit cards for many purposes. These benefits can also be multiplied because corporations can highly integrate their corporate cards with back-end financial systems, budgeting, forecasting, and asset allocation.



What are the benefits of corporate cards?
Employees can use corporate cards (also known as company credit or debit cards) to enable charging of their authorised business expenses, such as travel-related expenses (hotel, restaurant and airline or train tickets), without the company having to outlay cash advances or require the employee to use their own credit card or cash and then have to reclaim. The primary benefits are simplifying tracking and greater transparency in accounting for expenses.
Another use of Wallester Business corporate cards is for employees who are paying for corporate purchases of goods or services. This is especially the case with the growing level of eCommerce, in which suppliers require payment by electronic means. Some company expenses, such as online purchases or SaaS and cloud services, can only be done with a card. In these cases, personnel who have been issued with authorised corporate credit cards can conduct the transactions and make the appropriate payment without requiring action from the company’s accounting department.


What are the main types of corporate cards?
There is more than one form of corporate card, each of which serves a particular purpose in meeting a company’s goal of streamlining its handling of company expenses.

The most important card types are:

Credit cards

Corporate credit cards need to meet the needs of established companies that have a relationship with a bank or financial institution that can issue the card. The specific difference of credit cards compared to the other forms of corporate cards is that, like personal credit cards, the card affords what is in effect a zero-interest short term line of credit to the corporation. Expenses accruing on the card are only settled from the company’s funds on a regular (typically monthly) cycle. This makes the process of issuing corporate credit cards more rigorous and supervised by the issuing bank, which will consider the corporation’s creditworthiness when agreeing to the number of cards and the total limits on all issued cards.
There are some differences between corporate credit cards and business credit cards . For business credit cards, banks will typically require personal guarantees from directors or shareholders before agreeing to issue cards to a small business or a customer that does not meet the generally accepted stringent criteria for corporate cards. For corporate cards, the criteria banks use are the size of the company’s account, the profit history, the number of employees, annual turnover etc.
When corporate cards are available, they offer specific benefits for the company. These include accruing any rewards on spending to a corporate account, allowing the company to issue to many employees and set individual spending limits. Most banks provide advanced accounting tools for corporate customers that enable automated spending tracking.

There are strict rules that banks will apply before permitting the issue of cards, such as meeting stringent eligibility requirements, and maintaining overall credit limits, including the total potential spending power of the cards.


Debit cards
Debit cards function in the same fundamental way as corporate credit cards. The primary difference is that each card has a pre-loaded balance already debited from the corporate bank balance. In this sense, the card represents a negative line of credit since the funds credited to the card can only be used by the holder of the card – it’s like a loan to the cardholder.

The card can only be used to meet charges up to the balance available at the time of the transaction. The benefit of this is that there is an absolute limit on potential loss should a card be stolen, hacked or misappropriated. The negative aspect is that the supplier or vendor could reject transactions if the balance on the card is insufficient.

The balance available for the card user can be topped-up periodically or on a cycle, depending on the card’s purpose. For example, corporate buyers can be allocated a budget for monthly purchases, and the debit card can be topped-up with the funds each month. On the other hand, holders of cards can request extensions to their card balance, which is a simple transaction that is implemented by accounting departments. For example, employees travelling on business may need to extend the visit, which means extra and unbudgeted expenses must accrue. In such a case, the employee requests for the debit card to be credited with an amount sufficient to cover these additional expenses. The funds must then be transferred by debiting a company bank account and crediting the card.


Prepaid cards
Prepaid cards are a single-use form of debit cards. Each card is created with an initial balance, in the same way as the debit card, but the card can only be used up to the initial credit limit. It is not linked in any way to the corporate bank account, which means that it cannot be topped up. Unspent funds can only be retrieved by withdrawing cash from an ATM or manually transferring from the card.


Virtual cards
Along with the shift towards digital money, virtual cards linked to virtual accounts are a significant new step in the direction of virtual banking. A virtual card does not exist as a physical card. Instead, it is a digital entity with the same attributes as a credit or debit card (card number, owner, validation code and expiry). It is linked to a company’s virtual account.


Virtual cards are useful especially because they do not require sharing your company’s primary card details or banking information.
A virtual account is a sub-ledger that is created inside a company’s physical bank account. It can divide the accounts within the main bank account, and individual transactions flow through to the correct virtual account. Greater control is gained because each virtual account can be set up with a defined balance or monthly spending limit.


The virtual card works in exactly the same way as any other card, with the charges against the card being linked to a single virtual account. The spending power of the virtual card is the balance contained in the virtual account at any time. All transactions are debited directly to the virtual account only as long as funds are available.


Integrating corporate cards with the company’s financial management systems.
Both physical and virtual Wallester Business corporate expense cards can be linked with an account allocated to relevant business activities. This allows for direct access to transaction data such as invoices for accounting and budget management services. Reports with up-to-date detailed information on all corporate expenses are created directly from the stream of data being fed in from the Wallester accounts.
Businesses can streamline key financial processes and accelerate the entire cycle of interactions with suppliers, from ordering through to payment. The process of payment requests, approvals, supplier payment and expense reconciliation can happen in real time with minimum delay and improved efficiency. With the ability to track transactions in real time, companies can get detailed reports on the flow of funds, allowing them to manage the company’s budget and financial management.


How does a company get corporate cards?
Most corporate credit cards are issued by one of the most significant card companies. Visa and Mastercard are the most widely accepted cards, followed by Discover, Diners Club and American Express. Individual banks offer these credit cards to their private and corporate customers. The company can apply for individual cards in the name of each authorised employee. The cards are issued based on the corporation’s financial viability, not the credit status of the employee who is named on the card. Cards issuers take into account the company’s size, financial position, past history, liquidity and projected cash flow etc.
It is common practice for an employer to stipulate a credit limit that restricts the amount that cardholders can spend on each card in a given period (for example – monthly). This limit should be based on the expected outlays that an individual employee can reasonably expect to meet. By channelling the payments through capped cards, there are automatic controls over the flow of funds from the corporation’s bank account. This is one of the significant benefits of Wallester Business corporate credit cards over other forms of payment for employees’ legitimate business expenses.


Using corporate cards as a tool in expense management.
Corporate cards ensure that the company’s funds can be used only by specified employees when needed and for the appropriate usage. By choosing the right card issuer, the use of corporate cards can improve business administrative efficiency. For example, the Wallester Business cards can be managed as part of the online accounting system with options for controlling card limits, expense types, and authorised periods of use.

A company may issue corporate cards for the cover of travel expenses during a business trip exclusively (car rental, hotel and airlines tickets). Still, it can at the same time exclude non-business-related transactions such as entertainment expenditures and general shopping, where unauthorised payments would be declined at the point of sale and can also be reported to corporate managmenet.
Account management through corporate cards enables improved financial reporting, with a reduction in time spent and administration costs that would otherwise have been required to track corporate funds usage.

If a card is lost or an employee leaves the organization, a corporate card can be easily cancelled. If later it is found, it can be reactivated from the card management dashboard.


What are the advantages for employees who are using corporate cards?
By allocating corporate cards to employees who are directly involved in the settlement of business-related transactions, companies can encourage improved efficiency in the workplace. Wallester Business solution gives companies the ability to undertake expenditure without compromising financial security, while reducing the need for daily financial authorization procedures, represents a win-win opportunity for both the employees and the company. In addition, employees feel empowered and trusted, which makes for a stronger and more vibrant business environment.

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