How to Pay Corporate Costs With A Credit Card

Using a credit card for corporate costs can streamline expenses and unlock valuable rewards. Follow these key steps to effectively manage company spending and maximize your card's benefits.

1. Establish a Clear Policy: Before distributing any cards, create a detailed corporate credit card policy. This document should outline spending limits, acceptable purchase categories, and the required process for submitting expense reports.
2. Select the Right Card: Not all cards are created equal. Choose one that aligns with your company's spending patterns, offering rewards on common expenses like travel or supplies. Tools like the Kudos Explore Cards tool can help you compare options.
3. Implement Expense Tracking: Use accounting software or a dedicated expense management platform to track all transactions. Require employees to submit receipts and categorize their spending promptly to maintain accurate financial records.
4. Reconcile and Pay on Time: At the end of each billing cycle, reconcile the credit card statement against submitted expense reports. Ensure all charges are legitimate before paying the balance in full to avoid interest fees.

Impact On Your Credit Score

Using a personal credit card for business expenses can affect your credit score in several ways. Here are a few key factors to keep in mind:

• Credit Utilization Ratio. High balances from business expenses can increase your credit utilization ratio, a key factor in credit scoring models. This can negatively impact your score, even if the company reimburses you promptly.
• Payment History. Timely payments are crucial for a good credit score. If your company's reimbursement is delayed, it could lead to a late payment on your personal card, damaging your credit history.
• Credit Inquiries. Applying for a new personal card to handle business expenses results in a hard inquiry on your credit report. Too many hard inquiries in a short period can temporarily lower your credit score.

Alternative Ways To Pay Corporate Costs

Direct Bank Transfers

For businesses looking to bypass credit cards, direct bank transfers such as ACH or wire payments offer a reliable alternative. This method facilitates direct fund movement from a corporate bank account to a vendor, which is particularly useful for large or recurring expenses. Utilizing bank transfers can reduce transaction fees and provides a straightforward audit trail through bank statements, simplifying reconciliation and financial oversight without needing extra card management settings.

Expense Management Platforms

Implementing a comprehensive expense management platform provides significant flexibility. These systems can be configured to handle payments through various means, not just credit cards. You can set up automated clearing house (ACH) payments, schedule bill payments directly from integrated bank accounts, or manage employee reimbursements. This approach centralizes cost control and allows for customized payment workflows tailored to your company's specific financial policies and operational needs.

Choose the Right Card to Pay Corporate Costs

Navigating the world of corporate credit can be complex, but finding the right card for your company's expenses doesn't have to be. Kudos' Explore Tool simplifies the process, offering personalized recommendations from a database of nearly 3,000 cards to match your specific business needs, whether that's maximizing travel rewards or earning cash back on supplies. You can compare options side-by-side to find the best business cards available and ensure you're not leaving money on the table.

If you want to get more from your credit cards, Kudos is the premier free shopping tool for your online checkout. We're also giving you $20 back after your first eligible purchase—just sign-up for free with code 'GET20' and buy from a Boost merchant.

Frequently Asked Questions

What types of corporate costs can be paid with a credit card?

Most business expenses, including supplier invoices, rent, utilities, and even taxes, can typically be paid via credit card.

Are there fees for paying corporate costs with a credit card?

Yes, processors often charge a small percentage fee, but the rewards earned can sometimes offset these costs.

What are the benefits of using a credit card for corporate costs?

Key benefits include improved cash flow, earning rewards, simplified expense tracking, and building your business credit history.