A comprehensive survey of Norwegian and Swedish companies shows that almost half of all employees make outlays on behalf of their employer using their private cards.

“As far as I can tell, this way of dealing with expenses shows no sign of stopping,” says Marianne Holm, Key Account Manager at Eurocard. “Most people think that it works fine and aren’t aware of the risks it entails for the company.”

But why do companies choose to permit this method of managing expenses? A number of them think that it will mean less administration for the company if they let employees handle both expenses and payment of invoices, which are later reimbursed.

Many companies also mistakenly believe that corporate credit cards, for which the company assumes the credit risk, automatically mean the invoice is always sent to the company – which they find time-consuming to deal with. Instead, they want their employees to pay for their expenses. However, the company can actually choose where the invoice is sent, for example straight to the employee. This encourages the employee to submit their travel expenses in time for reimbursement, so they can actually pay the invoice, explains Marianne Holm.

Holm highlights four risk factors in allowing employees to use their private cards for work-related expenses.

1. Increased risk of fraud

As mentioned in the introduction, there is a risk with private cards that private and work-related expenses will get mixed up in the system, increasing the administrative burden on the company. The company also forfeits the ability to make forecasts about future expenses. Private cards cannot be linked to corporate solutions in which you can see employees’ purchases in real time, set purchase limits or block cards.

“Without such a link, it’s also much more difficult for the company to have full control, gain an overview and detect fraud and human error,” says Marianne Holm.

2. High costs for the company

Since private cards cannot be linked to the company’s expense and travel management system, the process is manual, time-consuming and expensive. The system digitises paper receipts, automates expense management and provides an overview of the company’s cost categories. Paper receipts alone cost companies billions of Norwegian kroner annually.

3. Impaired safety during business trips

Employers are responsible for their employees’ safety during working hours, including on business trips (known as the duty of care). In the event of illness, robberies, natural disasters and the like, the employer’s ability to assist is limited if a card with private payment responsibility is used while travelling.

“It’s much easier to provide financial assistance if an urgent need arises if employees use company cards, where the company is responsible for credit,” says Marianne Holm. “If you lose contact with an employee, transaction data can help map their whereabouts. It’s also easier for the employee to comply with the company’s card and travel policy.”

4. The company loses control of data

When employees use private cards and company cards with private payment responsibility for work-related expenses, valuable purchasing data ends up outside the company’s system, and statistics and key data can go astray. Companies that need to maintain confidentiality regarding their business or travel can find themselves in a vulnerable situation. Companies are also responsible for compliance with the GDPR, and owning the data ensures that this is dealt with correctly.

By owning its own data, the company will have a better basis for decision-making that can be used as a competitive advantage where negotiations, trends and opportunities are concerned.

The solution is:

Make sure you have a corporate card for which the company assumes the credit risk; in other words it is ultimately liable for payment. This provides:

• Better control of expenses and transaction data.
• Less expense administration.
• Better procedures for reducing errors and risks, and for detecting fraud.
• Ownership of the data