The Rise of Commercial or Corporate Cards: How They Are Transforming Business Spending
The Growing Popularity of Corporate Cards
Corporate cards have seen tremendous growth in popularity over the past decade as more businesses recognize their advantages over other payment methods. According to research from the Corporate Card and Expense Management Survey conducted by the Association for Finance Professionals, corporate card spending reached $864.7 billion in 2020, representing a 4% increase from the previous year. This steady rise shows no signs of slowing down as both large enterprises and small-to-midsize businesses continue adopting corporate cards at higher rates.
Some key factors contributing to corporate cards' increasing prevalence include the ability to consolidate expenses, automate accounting processes, provide robust data and analytics, offer flexible payment terms, and enhance oversight of employee spending. Their widespread acceptance has been aided by the rollout of new features from card issuers focused specifically on business users and the needs of modern companies.
Streamlining Expense Management
One of the primary benefits of corporate cards cited by businesses is how easily they streamline the entire expense management process. With cards, employees can pay for approved travel, entertainment, supplies, and other goods and services with a single payment method. This eliminates the need to front costs personally and later submit individual expense reports and receipts for reimbursement. Cards also integrate payment data directly into accounting systems through automated feeds.
This consolidation of spending onto Commercial Or Corporate Cards saves significant time and resources compared to manual expense reporting workflows. Accounting teams no longer have to spend hours processing receipts, verifying charges, and cutting reimbursement checks. Expenses are tracked in one place and easily coded to the appropriate cost centers or general ledger accounts. The process becomes completely digital, improving visibility and reducing risk of errors or lost paperwork.
Leveraging Spending Data and Controls
Beyond streamlining spend management, corporate cards provide a wealth of timely and actionable data that empowers finance professionals. Through online portals or APIs, companies have near real-time visibility into employee spending across all cardholder accounts. They can track category and merchant usage, set controls to prevent unauthorized purchases, and flag suspicious activity.
This level of oversight was nearly impossible with traditional payment and reimbursement methods. However, with card data feeds, finance teams now have a "single version of the truth" when it comes to expenses. They can generate custom reports to monitor budgets, identify cost savings opportunities through negotiation with vendors, and ensure policy compliance.
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