What's The Best Way To Pay For Employee Travel Expenses?

by Debi Enders



In the old days, when employees traveled or made small purchases on a business’s behalf, many got the funds they needed in advance from a petty cash fund.

Handing an employee cash can be risky. Money can be lost or stolen. Tracking receipts and preparing and reviewing expense reports also takes time that might be better spent in other ways.

There is a smarter, safer solution: prepaid expense cards. Comparable to employee debit cards, they are available through select banks.
How they work: You provide staff members with a reloadable card, upon which you load funds from your account as needed. The employee can use the card immediately after it has been loaded. If the card is lost or stolen, funds can be frozen immediately and reinstated on a new card. Any remaining funds can be removed from the card at the end of a trip or after a purchase is complete.

Where they work: Prepaid expense cards can be used almost anywhere that accepts credit and debit cards, including ATMs. You can work with your bank to identify and block merchant codes for “off-limit” establishments. If an employee tries to use the card at an “off-limit” establishment, the card will be rejected.

Depending on your card issuer, these cards offer many benefits. With the cards available through Commerce, for example, employees can check account balances online, which helps with budgeting if they are traveling on a per diem. These cards also come with a built-in audit trail and detailed usage reports, greatly reducing the number of receipts employees might need to submit. It also saves your accounting staff the time it would otherwise take to process paperwork for cash advances, make trips to the bank and obtain signatures on disbursement.

Debi Enders (debi.enders@commercebank.com) is vice president, small business banking at Commerce Bank