When most people think of prepaid cards, they often focus solely on benefits for individual users. And of course, many individuals use prepaid cards as debt management and spending control tools. However, prepaid debit cards can be used to effectively manage business transactions and track expenses as well.
Businesses that use prepaid cards have taken note and come to understand that these cards can provide many benefits to business owners. With the robust technological features of many of today's prepaid cards, allowing employees a degree of freedom with expenses has become easier than ever.
For businesses that rely on petty cash, prepaid cards are especially helpful, as they keep day-to-day operations moving smoothly. Companies are also using prepaid cards as a way to supplement traditional expense tracking and reduce or eliminate the use of corporate credit cards.
How Prepaid Expense Cards Work
Prepaid expense cards work nearly identically to any other type of prepaid card. A certain dollar amount is loaded onto the card and once this dollar amount has been reached, no more transactions can occur on the card.
Additionally, most prepaid expense cards have built-in fraud protection, as they are backed by the parent card issuer. In some cases, unauthorized transactions will be automatically declined and the card can be deactivated fairly quickly. Also, unlike a corporate credit card, there's no need to wait until the end of the billing cycle to see what transactions occurred. This allows any discrepancies to be addressed immediately.
Another convenient aspect of using a prepaid card as an expense tracking tool is the elimination of cumbersome receipts. In the past, employees would need to track every expenditure and hold onto receipts to submit to their employer. With a prepaid card, all transactions can be accessed online. This makes balancing the books a breeze.
Help Control Business Expenses
In many business settings, numerous employees need access to funds. As a result, keeping track of this spending can become tedious for finance managers and bookkeepers. By using a prepaid debit card instead, managers and other financial staff members are able to see all transactions for particular employees at a glance. This means they can quickly step in and make any adjustments necessary.
Using a prepaid card allows each employee to know exactly what he or she is approved to spend. Not only that, those who are charged with keeping track of financials can easily access all information related to each card. Expenses that are easily tracked on a prepaid card include gas, utility payments, and even the use of petty cash for small transactions.
Prepaid cards can also be used to set up employee budgets or even earmark specific funds for special projects. In the event that an employee needs funds for a specific reason or funds become low, prepaid cards can easily be reloaded on a case-by-case basis.
Using a prepaid card to manage business expenses allows owners the flexibility to change allocations according to the needs of employees. Tracking also gives businesses greater control. One prepaid card issuer even reported that businesses indicated they saved an average of 25 percent on employee expenses simply by utilizing prepaid cards.
Easy Accounting for Managers and Business Owners
Prepaid cards that are used specifically for expense tracking often come with extra features that other prepaid cards may not have. Some of these features include the ability to sync transaction data with popular bookkeeping software for seamless tracking. Cards that have software sync capability are beneficial for both bookkeepers and employees.
For those who process financial transactions, prepaid cards save time with automated reporting and budgeting tools. Additionally, employees don’t have to worry about consulting management for every single purchase, as they are already aware of what is acceptable as well as their overall budget constraints.
Using a prepaid card to track business expenses also gives companies an easy way to enforce any policies that they have regarding the use of company resources. For employees who run into difficulty, prepaid card funds can be easily adjusted by management. On the other hand, employees who have demonstrated a history of responsibility may be given more freedom with the use of their prepaid cards.
While there are cards that are specifically described as prepaid business expense cards, the truth is, practically any prepaid card can be used in the manner described here. Some check cashing establishments have even created their own prepaid cards specifically designed for this purpose because their business customers have shown increasing interest in business-centered products.
In many ways, prepaid cards can be considered an all-in-one solution for business owners. From the ability to accept payments to controlling expenses, prepaid cards offer flexibility for business owners and their employees. By using a prepaid expense tracking card, owners no longer have to worry about interest, surprise charges, or late fees from business credit cards. Instead, they can have the peace of mind that comes with using a prepaid debit card to track and manage employee expenses.
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