Hesitant to adopt a corporate credit card program? Here’s why you should.

The possibility of internal fraud is a real concern for many executives, regardless of their organization’s size. Popular news articles point to high-profile cases of corporate credit card abuse, asset misappropriation and various examples of employee fraud.

This narrative may leave middle-market financial leaders – especially those hesitant to adopt a corporate card program – feeling skeptical.

However, for middle-market companies managing tight margins, understanding where money is made and lost is critical for business success. Corporate credit cards, by their very design, offer increased visibility and control compared to other payment forms — including employees using personal credit cards. This makes them an ideal choice for managing expenses.

We partnered with Protagonist to better understand the beliefs held by middle-market financial executives and their staff when it comes to corporate card policy, expense management, corporate card products and benefits. This study found misconceptions among those hesitant to adopt a corporate credit card program, including the belief that commercial credit cards are a gateway to fraud and encourage overspending.

The surprising truth about employee fraud

There have been a few high-profile cases of employees treating their corporate credit card like a personal slush fund, causing many hesitant adopters to believe that the risks of implementing a corporate card program outweigh the benefits. But several cases in the news are exaggerated examples of fraud and point to a lack of controls and personal accountability.

There are, however, more subtle forms of fraud, like exaggerated expense reporting, that can have a significant impact on an organization’s bottom line if left unchecked. In fact, employees can quite easily commit this kind of fraud.

The Association of Certified Fraud Examiners (ACFE) classifies expense report fraud as an expense reimbursement scheme. According to the ACFE, these schemes fall into one of four categories:

• mischaracterized expenses such as claiming personal travel as business related
• overstated expenses such as rounding up mileage claims
• fictitious expenses such as purchases that were later refunded
• multiple reimbursements such as submitting a claim in March and again in May

Because this fraud is subtle, the claims fall through the cracks and raise no red flags. According to the 2024 Report to the Nations, the ACFE reports that expense reimbursement schemes account for an average loss of $251,000 and generally go unnoticed for 18 months.¹

Powerful benefits that help more than your bottom line

Much of the conversation centers around the risk corporate cards pose. But corporate credit cards actually offer significant financial, operational and security benefits worth talking about.

Technological advancements will make an all-in-one corporate travel management solution a reality soon, too. Having travel payments and booking as well as expense management in one place will further enhance the benefits of having a corporate card program.

Improved oversight

Corporate cards feature tools that provide visibility into individual payment transactions. You can easily understand who’s spending what and where as well as set controls that govern the type of expense the card is used for.

These tools can also help you quickly recognize patterns of fraudulent behavior and non-adherence to travel and expense policies that would be hard to identify with a manual process and next to impossible to identify when employees use their personal card for business expenses.

Increased efficiency

Replacing paper-based processes with an integrated corporate card program and expense management solution eliminates manual processes for tracking and analyzing payments. This can reduce administrative costs, speed up payments, and improve internal policy compliance, reconciliation and expense analysis.

Reduced expense fraud

Paper-based payment methods are inefficient and prone to fraud — making it more difficult to identify and control expense report fraud. Integrating your corporate card program with an expense/travel and expense management system provides real-time insight into spend, making it extremely difficult to inflate expenses or manipulate receipts.

Controls to safeguard against misuse

Implementing a corporate card program is only the first step, though. Often, there’s a clear line between making legitimate expenses and abusing the system. But without controls in place, there’s no way to identify the difference.

To safeguard against misuse, a corporate credit card program must be implemented with a well-defined expense management policy. This policy should clearly articulate allowable expenses and be communicated broadly.

That way, employees become part of the expense management process — and not part of the problem.