Corporate Finance » CFOs should consider corporate cards amid the cost-of-living crisis

CFOs should consider corporate cards amid the cost-of-living crisis

The introduction of corporate credit cards will also help employees manage the cost-of-living crisis more effectively, new research shows

CFOs should consider distributing corporate credit cards to employees to gain more accurate and timely insight into corporate spend, according to new data.

The introduction of corporate credit cards will also help employees manage the cost-of-living crisis more effectively. These were the findings of Censuswide’s survey latest survey of 1,232 British office workers.

The data, gathered in December 2022, revealed younger generations (aged 16-34) were the largest cohort (55%) to express preference for corporate card use, with almost half (47%) citing the cost-of-living crisis as a determining factor.

And yet, just 6% of employees at mid-size and larger (500+ employees) companies are required to use corporate cards.

With companies experiencing soaring cases of fraud due to cost-of-living hikes, many organisations continue to shun corporate cards. According to data from the Cifas Internal Fraud Database, cases of fraud carried out by staff against their employer are up by a quarter compared to the same time last year.

Financial pressures may have led some employees to supplement their income by fraudulently overclaiming overtime or expenses claims, supported with false documents. Examples of dishonest actions, which are up by 8% this year, include a rise in those stealing cash from their employer and manipulating accounts.

Nevertheless, business cards have the ability to minimise the risk of wasteful or fraudulent claims, while offering an effective way to more effectively control and track businesses spend.

Demand on the rise

Concerns around tight personal finances are putting people off using their own credit cards for work expenses.

Recent data from the Office of National Statistics reports people aged 16-2w4 are experiencing exponential living cost hikes from 42% up to 78%. This has resulted in the cohort becoming increasingly isolated due to attempts to cut back on spend to make ends meet.

Censuswide’s survey revealed 55% of employees aged 16-34 would use a corporate card if given the choice, compared to 41% of those over 55.

A further 94% of young employees cite long expense reimbursement processing time, risk of late fees, preference for not mixing personal and business spend, and streamlining the expenses process, as the key reasons for wanting a corporate card.

However, of those who would prefer to use a corporate card, 40% cited concerns about their own finances.

Spend management a low priority?

Meanwhile, preventative measures for tracking spend and expenses remains a low priority on businesses agendas, despite ongoing financial pressures.

“Giving employees credit cards also makes sound business sense. By setting restrictions on how and when, and where they can be used, it’s much easier to control purchases in advance, instead of having to wait for expense claims to come in after the fact,” says Jamie Anderson, chief revenue officer at Emburse.

“They also give much easier, accurate and timely insight into corporate spend, and the rebates that come back will also benefit the corporate coffers.”

Anderson says it is more important than ever for businesses to listen to employees and understand how best to support them. “This is even more important for younger employees who often earn less and may not have large amounts of credit available,” he says.

“When almost half of young workers say that the cost of living makes them want a company-paid card for their expenses, it’s something that companies should seriously consider. It’s an easy – and free – way to show employees you care.”

Of the 38% of employees that report their company provides corporate cards, medium-sized businesses (100-249) are most likely to, compared to just 25% of 500+ enterprises.

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