An expense card for contract employees has transformed the way businesses manage their finances by providing a streamlined and efficient solution for employees’ spending.
In this post, we’ll look at how expense cards function, look at the different varieties on the market, and highlight their major characteristics for financial professionals looking for transparency and efficiency in their expense management.
What is an Expense Card for Contract Employees?
Expense cards work in the same way as other types of debit or credit cards. One of the primary distinctions is that corporations can return these cards and give them to employees to securely pay for charges. Furthermore, cards can be created for specific categories, and transactions can be restricted.
For contract employees, these cards are also practical. Contract employees can be careful not to combine personal and business costs. Furthermore, users do not have to spend time submitting reports after using the card. This saves both the employee and the contractor time.
Companies might use expense cards for contract employees to reduce the amount of time spent on expense reporting. Many card issuers allow businesses to interface popular software programmes, such as QuickBooks, to automatically track costs.
How Expense Cards for Contract Employees Work
Expense cards are a popular alternative to traditional payment methods such as debit or credit cards. Contract employees can use their own card to make transactions with these prepaid cards.
It is relatively simple to set up an expense card for contract employees. To avoid confusion or misuse, it is critical to initially explain the business expense procedure to contract employees.
The expense card can then be activated by financing a card with a predetermined limit. Prefunding a card allows you to set a limit for your expenses over a specific time period. You can also finance a card for a specific purpose, such as travel.
You can also build bespoke expense tracking reports and control expenses with these cards.
Benefits and Advantages of Expense Cards for Contract Employees
Because of the added ease, expense cards for contract employees are handy. Businesses will be able to better control their spending, and contractors will have easier access to any monies they require.
They are also a far safer alternative to having a single company card, which can be difficult to track. Expense cards provide greater possibilities for setting expenditure limits and categories for each employee.
#1. Convenient Access to Funds
When contractors use an expense card, they have fast access to the monies they require. Companies might establish explicit policies about allowable costs and monthly restrictions. Contractors do not have to worry about corporations not accepting these charges because companies refund these card purchases.
In comparison, if a contractor uses a credit card and requests payment, he or she may be required to present expense records. These reports might take a long time to complete for both the contractor and the corporation.
#2. Simplified Expense Reporting
Many expense card companies also give relevant analytics. This allows access to information on expenditure categories and amounts spent.
Expenses can be tracked in real time and by the amount spent by each contractor. Most prepaid card companies also allow you to integrate popular software programmes to speed up the expense reporting process.
#3. Separation of personal and professional expenses
Contractors could opt to use expense cards. Contractors who use their personal or corporate credit cards for these expenses may find it difficult to understand. Personal and business spending can be separated using expense cards.
Expense Card Use Cases and Scenarios in Contract Work
Travel, supplies, and meal and entertainment reimbursements are some of the most prevalent types of employee or contractor expenses. Contract card expense cards can cover some or all of these categories for employees.
#1. Travel and lodging expenses
Travel and lodging fees are among the most prevalent corporate expenses. Prepaid cards can assist employees and contract workers in covering travel expense. These cards are useful and save both the contractor and the company time.
Prepaid cards are accepted by many well-known hotels and travel firms. Prepaid cards may also be used to cover international travel expenses.
#2. Purchases of Equipment and Supplies
Prepaid cards can also be used by contractors or employees who need to acquire equipment. This is especially beneficial for repeated purchases. Some prepaid card vendors provide prepaid cards for periodic vendor payments.
#3. Reimbursement for meals and entertainment
Requesting payment for each meal can be time-consuming for contractors. Instead, contractors can be given a prepaid expense card to utilise for meal and entertainment expenses. Meals and entertainment expenses might be budgeted for on a weekly or monthly basis.
Implementing the Expense Card for Contract Employees in Your Business
You can use the following tips when adopting this expense card for contract employees:
#1. Integrating with Existing Systems
To begin, an expense card must be compatible with your current systems. This covers your expense management software as well as other financial instruments. After all, the idea is to make things simpler, not more difficult. So, before selecting a card, make sure it is compatible with your system.
Some expense card providers, for example, make integration simple. They may provide tools that allow you to connect their cards to your systems with a few clicks. As a result, you may begin using the card fast and easily.
Furthermore, it is critical that the card accurately track costs. Accurate expense tracking allows you to better manage business-related spending. It can also provide useful information about your company’s expenses.
#2. Training and Compliance
Training is another critical component of implementing an expense card. Your contract workers must understand how to utilise the card. They must also comprehend your company’s expense policies.
What expenses, for example, might they charge to the card? Also, what is the budgetary limit? What happens if they go too far? Explaining these points properly can help to avoid complications later on.
Finally, there is the issue of conformity. This includes following all regulations and laws when using the card. Tax laws and accounting standards are examples of this. Following that, the use of the card should make things more efficient while avoiding legal concerns.
Challenges and Considerations in Using Expense Cards for Contract Work
Expense cards have numerous advantages. There are, however, numerous compliance considerations to consider. Companies should make certain that these cards are compliant with their expense reporting rules. They must also share their methods with contractors.
#1. Compliance with Company Expense Policies
If you provide an expense card to a contractor, it is critical that you instruct them on your company’s policies. Contractors should be aware of the expense restrictions and expenses that are allowable.
Businesses can blacklist specific vendors, set spending limits, and impose other restrictions. Companies can also make changes to each person’s card.
#2. Reporting and Documentation Requirements
Contractors may be required to submit additional paperwork requests. Furthermore, certain prepaid card providers may demand that users perform authentication and other required actions.
Prepaid cards with customizable features can be requested by the majority of businesses. This is a critical step in ensuring that these cards fit your compliance standards.
Factors to Consider When Choosing an Expense Card Provider
There are numerous alternatives for prepaid cards. Before making this decision, it is best to evaluate all factors. Security, interoperability with other programmes, and international use are all key considerations.
What to Look for in an Expense Card
First, consider the budget constraints. The restrictions for various cards vary. As a result, it is critical to pick one that is appropriate for the job. Some jobs, for example, may necessitate more spending than others. As a result, a greater limit may be preferable.
Second, look into the rewards programmes. Some credit cards provide cash back or points for spending. This means that contract employees can earn while spending. Above all, it’s a wonderful incentive to use the card.
Finally, evaluate how simple it is to use the card. Is there a good expense management system in place? Can it readily track expenses? And can it achieve all of this with a few mouse clicks? If so, it’s probably a solid choice.
Comparing Different Expense Cards
You should compare cards once you know what to look for. Not all expense cards are created equal.
Consider their fees, for example. Some credit cards may levy fees for certain services. Such as utilising an ATM or exceeding your spending limit. If this is the case, it’s best to be aware of it ahead of time.
Consider the provider as well. Some expense card companies are more well-known than others. They could, for example, provide better support. Alternatively, they may have greater expertise with contract employment. These details can make a significant difference.
Top Expense Card Providers for Contract Employees
There are numerous organisations that specialise in supplying expense cards to contract employees. Bento, Emburse, Bill Spend and Expense, and Pex Business are several expense card companies to consider.
#1. Business Bento
Bento assists businesses in tracking and controlling staff costs. Bento cards can be funded by companies for certain departments and/or team members.
These cards can assist businesses in restricting specific transactions and setting daily restrictions. According to Bento, these cards can help the average firm cut spending by 15%.
#2. Emburse
Emburse enables businesses to effectively track and control employee spending. This company’s convenience benefits both businesses and contractors.
Emburse assists businesses in swiftly creating expense reports. It also enables contractors to acquire expense pre-approval and stay up to speed on the company’s expense regulations.
#3. BILL Spend and Expense
Bill Spend and Expense (previously Divvy) offers business expense management systems.
It enables organisations to combine well-known applications such as Intuit QuickBooks, Oracle Netsuite, and Sage Intacct. Businesses can also take advantage of its mobile app and virtual cards.
#4. PEX
PEX offers prepaid physical and virtual cards for employees and contractors. It also includes software that assists businesses with expense management and other functions.
Popular software programmes such as QuickBooks, Zero, Sage, and Zapier can be integrated. PEX also offers payment options to vendors who are paid automatically.
The Future of Expense Card for Contract Employees
Let’s see what the future holds now that we have all of this information:
#1. Greater Use of Technology
For starters, expect more technological use. Many expense cards are now electronic. This means they are available online rather than on physical cards. This makes them more user-friendly, especially for online purchases.
A contract employee, for example, may need to purchase anything online. They have the option of using a virtual expense card. Following that, the company can immediately review its expenses. This is due to effective expense management tools. As a result, they provide useful information about spending habits.
#2. More Customization Possibilities
Second, more customization possibilities may be made available. Businesses can currently put spending limitations on their expense cards. They may be able to regulate what types of purchases can be made in the future.
This could reduce fraud risks. A company, for example, could prohibit the card from being used for particular purposes. As a result, they can lessen the likelihood of fraud occurring.
#3. Enhanced Integration
Finally, expense cards may see further integration. They could be more tightly integrated with expense management systems. This might make expenditure tracking and control more easier.
A company, for example, might employ expense management software. The expense cards could be linked to the software. The company may then see all of its spending in one spot. Not only that, but it may aid in the reconciliation process. Businesses may save time as a result of this.
Can Contract Employees Use Expense Cards Like Regular Employees?
Yes. Contract employees are also permitted to use expense cards. This decision is based on the internal expense policies of the organisation. If you decide to do so, you must notify your contract employees about your company’s regulations.
How Do Expense Card Providers Ensure Security?
To ensure the security of transactions, expense card providers take comparable precautions as credit card firms. They also enable businesses to limit certain transactions, such as overseas transactions and specified categories. Spending limitations can also be established to guarantee that expense budgets are followed.
How Do You Choose the Right Expense Card?
First, consider the budgetary constraints. Some credit cards allow you to spend more than others. Second, look over the prizes. When you use certain credit cards, you may receive cash back or points. Finally, consider how simple it is to use. Can it readily track costs? These factors can assist you in selecting the finest card.
How Do You Use an Expense Card in Your Business?
First, the card must be compatible with your current systems. Second, you must train your employees how to utilise the card and your cost-cutting policies. Finally, when using the card, you must ensure that all applicable laws are followed. These actions can make using the card easier and more convenient.
Are there Restrictions on What Expenses can be Covered with These Cards?
Prepaid expense cards are accepted by the majority of vendors. Some vendors, however, may refuse to take these cards. If you are travelling internationally, make sure these cards work in your destination country.
Depending on the supplier, businesses might also impose some limits. They may, for example, choose to limit particular vendors or spending categories.
Conclusion
Companies and contract employees can both benefit from expense cards. They can save contractors time while also ensuring that businesses satisfy all of their regulatory standards.
Companies must reduce the amount of time spent on expense management as contractors become increasingly prevalent in the workforce. Prepaid expense cards can assist businesses reach this goal.
Fortunately, businesses do not have to give up control and convenience. Companies can track, monitor, and alter their expense cards using a variety of tools provided by expense card providers.
Related Articles
- Best Credit Card Reader for iPhone 2023
- Business Innovation: Meaning, Types and Importance
- MCE Insurance Reviews | MCE Insurance Policies and All you need to know
- Top Insurance Policies Worth Having in the UK
References
