How Do Business Spenders Really Feel About Using Personal Cards for Work? It's Complicated
BELLEVUE, Wash., Jan. 13, 2021 /PRNewswire/ -- Center, a technology company helping businesses manage and optimize spend, today released the results of its first Business Spender Sentiment Survey, which asked over 500 business spenders—employees who make purchases or travel on behalf of their company—how they feel about using personal cards for work expenses.
"One of the most common statements we hear from CFOs, accounting managers, and HR leaders in organizations of all sizes is, 'We don't have a corporate card program because our employees like to use personal cards to earn points, rewards or cash back,'" said Naveen Singh, Center CEO and co-founder. "We wondered if that was actually true, especially given the financial burdens of the pandemic economy."
"What we found is that while employees do see earning points as a benefit, many also experience stress and incur financial costs, especially for the nearly 70% of respondents who carry or sometimes carry a balance on their personal credit cards," Singh continued. "Center's Business Spender Sentiment Survey reveals employees' burdens, worries, and opinions about using personal cards for work."
Survey respondents who carry a balance on their personal cards were of all ages and all levels within an organization. Even if their companies reimburse them quickly (90% say they are reimbursed in less than three weeks), people who carry a balance forward will immediately begin accruing interest charges on new purchases (business or personal). Those interest charges, which cannot be expensed for work, impact employees' personal finances and ultimately negate the value of the points earned for those purchases.
Furthermore, for organizations who have invested in a corporate card program, there is duplicative cost and effort involved in maintaining two employee expense systems. In addition to paying for and managing a corporate card program, organizations also have to process and reimburse out-of-pocket expenses for employees choosing to use personal cards, adding to the complexity of an already time-consuming process.
"Business spend has been shifting over the last decade, with more employee-driven, decentralized purchasing, a trend only strengthened by the pandemic this year," said Singh. "In addition to typical travel expenses, employees today pay for software, digital advertising, office supplies, and more by credit card. Organizations need to consider how to manage and track card spend more efficiently while also minimizing the financial burden on employees."
For companies without corporate card programs:
For companies with a corporate card program:
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