The Basics Of Corporate Credit Cards

If you’re a sole proprietor, a co-owner or a director of a company; a corporate credit card may just be the thing you need to streamline your finance-related processes and boost efficiency for the company.

What is it?

Also known as commercial or business credit card, it is a category of credit services designed specifically for businesses.

It works just like any other conventional credit payment card. Its primary function remains that of a payment tool, which enables card users to engage in cashless transactions. And like any other credit payment cards, it commonly comes with a reward or cash back programme offering a wide range of privileges.

The key difference is, they are applied by a company and issued to nominated employees. This authorises the nominated staff to make payment using a credit service account that is managed by the company.

What are the key benefits?

The greatest proposition of this facility is their capacity to streamline a company’s financial processes.

By issuing this crediting tool to key nominees in the company – which may include directors, senior management members as well as stakeholders whose jobs include frequent business related payments – a company could save considerable amount of time associated with processing of claims and reimbursements.

Furthermore, a company could also effectively control the spending of each and every nominated employee, by designating different spending and credit limits for different positions.

Best of all, all spending made on corporate credit transactions are entitled to privileges that commonly include cash rebates and discounts at designated merchants, which in turn help save cost for the company. Some banks also provide free travel insurance coverage for tickets purchased through this instrument, which eliminates the need to purchase additional travel insurance if the cardholder is sent on an overseas company trip.

Last but not least, it is an excellent financial tool to make purchases integral to a company’s survival on credit. This comes in very handy especially when the company is strapped for cash during tough times.

How does it convenient a business?

In a traditional claims scenario, an employee who has been designated to make purchases on company’s account would:

1. Pay for business items out of his own pocket.
2. Keep copies of the receipts.
3. File for claims at the end of every month or quarter, which in turn involves filling of forms, authentication of the purchases by immediate superiors, approval by the Management and processing of the forms and receipts by the Administration Department.
4. Then, wait for a period of time when his cheque is being prepared, signed and disbursed.

With this credit facility, the same employee would simply make the necessary business purchases using his company-issued card. The bills are then processed by the relevant finance personnel at the end of the month.

How to apply for one?

Most banks in Malaysia offer this specific credit instrument. To apply for one, a company needs to fulfil certain criteria (which notably include the company’s financial standing), which may differ from bank to bank.

Generally, the application process involves the following documentations:

• Photocopies of the NRIC or passport of the nominated employees
• Latest six-month bank statements of the company
• Latest one-year financial statement of the company
• Board of Directors’ Resolution (for limited or private limited companies)
• Letter of Authorisation (for partnership companies)

Do note there is usually no limit to the number of employees you can nominate to hold a corporate credit card, as long as the allocation of credit limit of the respective nominees does not exceed the company’s total assigned credit limit.

 

Applications and enquiries can be done by personally visiting a bank. Or if the card is available on iMoney’s credit card comparison table, you can also apply online.