When it comes to who is responsible for making repayments, different corporate cards have varying rules. For this, business owners need to understand and get a clear idea of how liability can be determined and applied.
How a corporate card liability functions
Whether it is making payments for technology subscriptions, restocking office supplies, or securing booking for business trips, businesses have to carry out numerous transactions on a regular basis. Corporate cards enable employees to charge their authorized expenses to the company without filling out the lengthy claim forms.
But how your business members use their corporate cards varies based on its liability. Liability regulates the people who are responsible for making repayments on a corporate credit card. Based on the terms, the corporation or the particular employee is held responsible for clearing the balance.
Understanding individual liability card
An individual liability card allows employees to make payments directly to the issuer for every transaction they have made on the account. After that, they need to submit an expense report for receiving reimbursement from the employer. All the corporations that have individual liability cards must outline the expense reporting procedure in their corporate card policy. It must comprise the monthly dates on which the employee has to submit their expense reports and details related to the type of receipts required.
Understanding corporate liability card
The accountability of making a repayment on a corporate liability card is completely on the company. Since employees don’t have to pay upfront for their expenses or keep on waiting on repayment, it provides employees an increased financial relief. In that case, the employer has to pay for all the approved transactions.
However, corporations that have corporate liability cards have to give their employees a clear policy. Businesses can also utilize expense reporting to get assistance with reconciliation at the completion of every billing cycle. Issuers can’t review credit checks on authorized holders of a corporate liability credit card, but employees can see their own credit affected in case of erroneous expenses are unpaid.