Over the past few years, there has been a steady trend towards an increase in the number of enterprises issuing corporate bank cards. This is due to the fact that they are very convenient to use to pay current expenses, one way or another connected with the economic activities of institutions. Despite the growing popularity, the share of their emissions is relatively small, so they can not be called a mass product.
Varieties of corporate cards
As a rule, they are used by large organizations that work closely with foreign companies. The institution signs a contract with the bank, on the basis of which a corporate card is opened for an individual who will subsequently pay for its representation and travel expenses with it. Under the terms of the agreement, the employee of the company in whose name the account is open has the full right to dispose of the funds available on it. Today there are two types of corporate cards:
- credit, through which settlements are made at the expense of funds provided by the bank on the terms of a loan agreement;
- settlement - all calculations are made at the expense of periodically replenished own funds of the enterprise.
At the request of the client, the corporate bank card may have a fixed cash limit. The minimum balance can be used only in exceptional cases. This condition must be specified in the contract. In addition, a corporate card account can be opened for one or more employees. Depending on the size, type of activity and activity of the company, the bank selects the optimal form of organization of payment of current expenses.
What are the functions of a corporate card?
First of all, its use allows to significantly reduce the time required for an accountant to process the issuance or return of funds to accountable persons. Also, a seconded employee of the enterprise saves time and money on declaring funds when passing customs control. Corporate card allows you to establish strict control over how accountable person spends money. With its help, travel lists, utilities and hospitality expenses are paid.
Opening Rules
The representative of the company must contact the selected banking institution and submit an application for a corporate card, on the basis of which an agreement on opening and subsequent servicing of an account will be signed. In addition, the company must provide the bank with a list of employees in whose name the cards will be opened. Future owners need to write an application to receive them. All of the above should be accompanied by a package of documents required to open a current account.
Corporate Card Accounting
The basis for accounting control over cash flow is a bank statement or data from an electronic journal in the “Client-Bank” system.
Opening or closing an account, the company is obliged to notify the tax office about this within seven days. Otherwise, he faces a substantial fine. In the accounting policy of the company, limits on the card, a list of documentation for advance reports, a list of expenses and operations allowed to employees, as well as the timing and procedure for reporting must be provided.
Key benefits for the company
Corporate card makes it possible to achieve a significant reduction in time and operational costs for the issuance of accountable cash. It saves the management of the enterprise from the need to receive and store in the banking institution the amounts intended to pay for representation, travel and household expenses. In addition, the company that issued the corporate card significantly facilitates the work of accounting and there is a decrease in the number of reporting documentation.
The company gets the opportunity to control employee expenses not only by bank statements, but also by limiting the permitted operations. If an employee who is on a business trip urgently needs additional funds, the company can replenish the account at any time. To ensure the safety of funds on a lost card, the agreement provides for the possibility of blocking it by phone call of the owner. When crossing the state border, the funds on the payment card do not need to be declared. In addition, during foreign business trips, the card holder eliminates the need to purchase foreign currency. All operations carried out abroad are subject to automatic conversion.
How to use a corporate card?
The use of such cards is governed by rules that apply to all employees of a particular organization. The provisions on use must include the following items:
- the procedure for action in case of loss;
- requirements for securing PIN information;
- indicative list of documentation accepted as evidence of expenses;
- the time period during which the employee is obliged to prepare and submit an expense report with documents attached to it, which confirm the expenses incurred.
In order to let employees know what can serve as proof of expenses, you can create a special album of samples and attach it to the regulation on the use of cards. It is desirable that the rules provide for limits on permissible settlements on cards, a list of operations and expenses that may be committed by an employee. The list of permitted operations may vary depending on the territory of which state the company is registered. Settlement limits may vary depending on the position held by the cardholder. Among other things, the statute must specify the time period at the end of which the employee must return the card, as well as the degree of responsibility and the procedure for compensation for non-compliance with the established rules.
Service Rates
Each bank independently sets the fee for opening and subsequent servicing of a corporate card. In most cases, it practically does not differ from standard tariffs applicable to individuals.
In the process of registration, the client has the right to choose a card class. The production of instant, non-personalized cards usually takes no more than half an hour, while the release of prestigious name cards can take several business days.
