The Freya Dinner

by OrtusClub on 27th July 2018

The Freya Dinner

June 27, 2018

‘Commercial Cards: Exploring The Future of Corporate Spending’ 

In June of 2018, The Ortus Club brought together CEOs and CFOs from prominent firms in Kuala Lumpur to discuss, debate and share experiences on the use of corporate cards within their companies. The lunch was hosted by VISA, a global payments technology company working to enable consumers, businesses, banks and governments to use digital currency.

Providing commercial cards to all employees can simplify the management of corporate spending. As technology evolves and individuals become accustomed to cashless payments, the use of corporate cards continues to grow in popularity, especially within multinationals. Yet, despite its benefits, a lot of companies only issue corporate cards to top management. We will be discussing:

  • What percentage of employees are given corporate cards in Malaysian companies?
  • What kind of payments are corporate cards most used for?
  • What are the advantages and disadvantages of issuing corporate cards across the entire workforce?

WHO IS ISSUED A CORPORATE CARD

When participants of The Freya Dinner were asked how many employees within their respective companies are issued corporate cards, the majority responded that only their senior management was.

This decision seemed to revolve around three factors: role in the company, necessity and approval from senior management. Most participants said that the decision of whether or not to issue a corporate card is most frequently based on the needs of the employee (i.e. if they travel a lot or make frequent corporate transactions). However, this is a subjective decision that a senior executive would make.

THE USE OF CORPORATE CARDS

The biggest use of corporate cards resulted to be travel (and a little entertainment). When asked about whether their travels were mainly international or domestic, the majority of the guests who attended said that they travelled mostly internationally.

When asked whether, during travel, attendees preferred to use their personal cards rather than their corporate cards, 77.8% chose the corporate card.

ISSUING CORPORATE CARDS TO THE WORKFORCE

The Challenges

Despite the promise that comes with the efficiency of issuing corporate cards, employers still express that they do have some concerns when it comes to the issuance of cards to their employees. One of the main challenges discussed during the dinner was the accountability and liability of the card. One of the participants shared that though they have sound policies regarding the use of their cards, it is inevitable that they would suffer from card misuse without the opportunity to properly seek out repayment.

An example of this was brought up by one of the participants who shared a hypothetical scenario of an employee deciding to abuse a corporate card as a consequence of soon terminating his/her employment. Malaysian regulations state that companies can not put liability on said employee and this poses a threat when issuing cards.

The Benefits

Participants agreed that the benefits of having the workforce using corporate cards outweigh the concerns as, doing so, CFOs are given a detailed and consolidated report of all the expenses used by her team which helps structure monthly or annual reports. It also means that senior executive do not have to share their cards for their team expenditures.

It was also mentioned that corporate cards did away with the hassle of manual reimbursement and the paperwork that came with it.

Corporate cards provide the user with the simplicity of making business-needed transactions as well as the accounts management that helps in the tracking of revenues in the organization.

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