How to track and control employee spending

Quick insights

• Business credit cards allow employees to make work-related purchases with monitoring, tracking and spending controls.
• Employee purchases made with a card are consolidated under one account, making it possible to track and categorize expenses in real time.
• Employers may choose to implement an employee credit card policy that will detail who can have a credit card and how it's meant to be used.

Growth is what businesses are after. But with growth may come growing pains. You may find yourself with a team of people who routinely make purchases for your business. If you need to give your employees credit cards, take some comfort knowing there are ways you can track and control employee spending.

What is an employee credit card?

Employee credit cards are issued by a financial institution and used by employees to make work-related purchases. Business credit cards are issued to employees of the company but are managed and paid by the business.

Giving your employees a business credit card will not mean they have unlimited access to company credit. Many business credit cards come with built-in tracking and monitoring to help manage employees' use of credit cards.

Let’s look at a few of the ways your card and online account can help you control employee spending.

How to monitor employee spending on credit card accounts

Many cards have tools that help business owners monitor, track and control spending. Employee purchases are consolidated under one account and the business owner can review them in real time. Because many business credit card accounts also categorize expenses when they post, you can get a quick overview of how company purchases are being made. This can also help you spot if company budgets are in line with expenses without having to wait on a monthly statement.

Another helpful feature is spending limits. Many cards allow you to set spending limits on each card. You can determine the amount of credit each employee can access with their card. This is helpful if you determine some employees need higher spending limits than others based on their roles and responsibilities.

Some other ways you can monitor employee spending with a business credit card are:

• Restrict employee purchases by vendor
• Restrict purchase amounts on a single transaction
• Set alerts when spending limits have been reached
• Regularly audit card usage

What tactics should I use to manage employee spending on credit cards?

Managing employee credit cards can be simplified by implementing guidelines and communicating them to employees. As a business owner, you may want to create an employee credit card policy to clearly outline employee usage of credit cards.

In an employee credit card policy, you may want to include provisions about the following:

• Expenses and budgets: Explain what employees can purchase and any budgets associated with credit card purchases.
• Reporting and tracking: Ensure employees know when and how to submit receipts and documentation for expenses.
• Security measures: Explain how cards should be handled, stored and transferred.
• Violations: Outline what actions will be taken if credit card misuse occurs.

In summary

As your business grows, you may find the number of employee credit cards you have grow with it. But fear not. There are many features built into business credit cards that make it easy to monitor and track employee spending in real time. Business owners can take comfort knowing that individual cards can have custom spending limits and include ways to restrict purchases and alert you to card activity. You also can set alerts for purchase amounts and restrict the ability to make purchases from certain vendors.