How to manage business credit card expenses

Quick insights

• Responsibly using a business credit card is one way to help organize business-related expenses.
• Many business credit cards allow business owners to request employee credit cards so that individual team members can use the business account.
• Setting spending limits and tracking employee expenses are a couple of ways to monitor employee spending habits.

Using a business credit card may be a helpful way for business owners to separate work and personal expenses, access a line of credit and earn rewards on everyday purchases. But it's important to manage these expenses to avoid overspending or late payments, which may result in penalty fees—or even bankruptcy down the line.

Below, we cover how to manage business credit card expenses and monitor employee spending habits. Keep reading to learn more about responsibly managing a business credit card.

How to manage business credit card expenses

Owning a business comes with a lot of expenses. Here are a few strategies for responsibly managing them:

Use a business credit card

Applying for a business credit card is a great first step to organizing your business finances. Business credit cards typically provide access to benefits like higher credit limits, rewards for business-related spending and more.

Business credit cards can also be useful in separating business expenses from personal ones. If you put all your work-related expenses on a business credit card, things will likely be easier once tax season rolls around.

Depending on the credit card, you may also be able to link your quarterly expense reports to certain accounting software to track spending in preparation for your taxes.

Take advantage of rewards programs

Many business credit cards allow cardmembers to earn rewards for business-related spending. Some even allow cardmembers to earn points at an accelerated rate on eligible purchases in specific categories (like shipping, office supplies or advertising).

Depending on your card, you can redeem points for cash back, gift cards, flights, hotel stays and more. Choosing a credit card with a rewards program that complements your usual spending might be a helpful way to earn additional points or cash back to reinvest in your business.

Analyze spending patterns

Analyzing credit card purchases allows you to identify spending patterns to make better financial decisions. For example, you may miss opportunities to cut redundant costs if you don't regularly review your credit card statements. Or perhaps you find ways to maximize credit card rewards in bonus categories where you spend the most.

Issue employee credit cards

Many business credit cards allow you to request employee credit cards for individual employees. These cards are linked to the primary business credit card account, so employees can make purchases on behalf of the business.

Using employee credit cards can help streamline business expenses into one centralized statement, which may help business owners better monitor spending. Employee credit cards also eliminate the need for employee reimbursement programs that may cause additional administrative work.

If multiple employees have employee cards, it may be helpful to create a company credit card policy so everyone understands the spending guidelines.

Strategies for monitoring employee spending habits

Things may get more complex if multiple employees have company credit cards. Here are a few ways to monitor employee spending:

Set individual spending limits

Many business credit cards, like the Chase Ink^® suite of business cards, allow business owners to set specific spending limits for authorized users (in this case, individuals who have an employee card). Many business owners find it helpful to track spending all in one place.

To set a spending limit for employees, log into your Chase account online or via the Chase Mobile^® app.

Use expense management tools

Using expense management software might help centralize the tracking of multiple company cards. It also allows for a uniform way for employees to upload receipts or request reimbursements if necessary.

Require receipts for employee purchases

It may be useful to double-check expense reports before approving them. Requiring employees to upload receipts to an expense management tool may help verify purchases and purchase amounts. Some tools offer receipt tracking software to streamline the process.

Set up spending alerts

Setting up spending alerts may help automate the process of tracking spending. For example, most credit cards allow you to create alerts for purchases over a certain amount.

Can you write off business expenses on a credit card?

Yes, business owners can deduct expenses considered necessary to their business on their taxes. This includes a range of expense types. A few common examples include:

• Car expenses and mileage
• Business-related travel expenses
• Office expenses
• Office rent
• Fees on business credit cards
• Business meals

Keep in mind that it's typically recommended to keep proper documentation of expenses you plan to write off for your business; you will likely need this information for your taxes. It may be best to consult with a tax professional for guidance specific to your business.

In summary

Staying on top of your business credit card expenses is an important part of managing your company's overall financial health. If you're a small business owner, you may benefit from applying for a business card, making use of its rewards program and creating a system to monitor employee spending.

To further explore small business credit card options, compare our available business credit card options.