Whether you’re running a small business or are part of the finance team at a large corporation, managing employee travel expenses efficiently and effectively is crucial for your company’s financial health.

If you’re still using traditional methods of tracking and reimbursing travel expenses, such as paper-based receipts and manual data entry, it may be time to rethink your approach. Not only are these processes time-consuming and prone to errors, they lack the real-time visibility you need to manage employee spending, maintain accurate financial records, and make smarter, data-driven decisions.

Fortunately, there is a simple solution to the age-old challenge of how to keep track of employee expenses. In this guide, we explore how virtual credit cards for business can streamline and improve your corporate expense management processes.   

What is employee expense management?

Employee expense management refers to the policies, procedures, and systems you’ve put in place to oversee and regulate the spending activities of your employees. This includes tracking expenditures for airfare, lodging, meals, transportation, entertainment, and other costs incurred by employees while they travel for work.

How should expense management be handled?

For your expense management process to be effective, you’ll need to establish clear guidelines, enforce compliance, and provide employees with the tools, technology, and expense management software they need to facilitate accurate expense reporting. These six steps will help you manage business travel expenses accurately and process employee reimbursements efficiently:

1. Establish clear expense policies: Start by defining clear and comprehensive rules about travel expenses. Your company policy should outline exactly what expenses are eligible for reimbursement, spending limits, documentation requirements, and how your expense approval process works. Encourage policy compliance and reduce confusion by regularly communicating changes anytime an update is made.
2. Use expense tracking software: Software can automate reporting and reduce the administrative burden on employees and your finance team. These expense management solutions provide intuitive, user-friendly features such as receipt capture, expense categorization, approval workflows, and integration with your existing accounting systems or enterprise resource planning software.
3. Make virtual credit cards available for travel: Provide employees with virtual corporate travel cards. These are credit cards that offer a more secure way to pay for business expenses. These digital corporate cards can be used to make purchases while traveling, and every transaction will be automatically recorded and categorized for easier tracking and reconciliation.
4. Create a detailed expense reporting process: Employees should be required to submit detailed expense reports for every purchase. Expense reports should include itemized receipts, descriptions of the expenses, dates, and the reason for the purchase. This process will foster transparency and accountability, making it easier to verify legitimate business expenses and detect any discrepancies or policy violations.
5. Conduct regular audits: Audits help maintain accuracy and integrity in expense reporting and prevent fraud or misuse of company funds. Conduct regular audits of employee travel expenses to verify compliance and identify spending trends or discrepancies. If you uncover any issues, be sure to address them promptly.
6. Provide ongoing training and support: Offer training sessions to educate employees on your policies and proper expense reporting procedures, and to address any questions or concerns they have about business expenses.

How to automate expense management with virtual credit cards

If you already have an expense management process in place and are looking for a solution for how to manage employee expenses easily, virtual credit cards might be the key.

Virtual credit cards provide a more secure way for employees to make business travel-related purchases while on the go. Unlike traditional physical credit cards, virtual expense cards are typically issued for single-use or limited-duration transactions. They’re generated electronically and linked to specific travel expenses or spending limits, giving you greater control and visibility over employee charges. Once the request for a virtual card is approved, a unique 16-digit credit card number is sent to the user via a secure mobile app.

These cards are revolutionizing the way travel-related transactions are conducted and managed. Their advantages include:

• Enhanced security: Virtual cards are less susceptible to loss or theft since they exist purely in digital form and each virtual card has its own unique 16-digit number. In addition, they’re protected with the most advanced security measures, such as tokenization, encryption, and dynamic CVV codes that make it significantly more challenging for fraudsters to make unauthorized card transactions.
• Improved control and visibility: When employees use virtual credit cards, you get greater control and visibility over their expenditures. Virtual cards can be customized with specific spending limits, merchant restrictions, and expiration dates. This gives you a granular level of control and helps keep employees in line with your employee expense policies by preventing unauthorized or excessive spending. They also offer real-time dashboards so you can track spending as it occurs and create a detailed audit trail for each and every card transaction.
• Streamlined reconciliation: Virtual cards can be integrated into your existing expense management software, so transactions are automatically recorded and categorized. This eliminates the need for manual data entry, receipt scanning, and reconciliation, which are time consuming and prone to user error. Additionally, virtual credit cards provide detailed transaction data, including merchant information, transaction amounts, and timestamps, so it’s easier to reconcile accounts accurately – all while reducing your administrative burden.
• Faster expense reimbursement: Automating your expense tracking and approval processes reduces the time it takes for employees to receive their funds, increasing worker satisfaction.

What are the best virtual credit cards for expense management?

Choosing the best virtual credit card for your business depends on your specific needs and requirements. To find the best option for your business, follow these steps:

• Start by identifying your must-have features and functionalities, such as customizable spending limits, real-time tracking, and integration with your expense management software. For example, if your employees travel internationally and will be using different currencies, you should choose a virtual credit card partner that offers multi-currency support and real-time currency
• Seek out providers that will tailor their solutions to your business needs. Evaluate offerings like security features, fraudulent activity notifications, ease of use, customer support, and pricing. You should also consider how well their card services integrate with your existing accounting software and expense management platform. Many providers will let you test out a pilot program before you buy, so you can assess their performance and determine if it aligns with your needs.
• Read recommendations and reviews from other businesses or industry peers who have experience using virtual credit cards for expense management.

Want to discover the best expense management card for your business?

Unlock the potential of seamless expense management for your employees and optimize your business finances with Amex GBT Neo.