Business Debit Card For Company Expenses

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While most of us use debit cards for personal usage, there is also a corporate counterpart—the Business Debit Card. Extending their financial management features in a corporate setting, these debit cards can help with company expense streamlining, offer discounts on large purchases, benefit from bank rates, and more.

In this article, we explore what a business debit card is, its features, benefits, and how to get started with one for your business needs.

What is a business debit card?

A business debit card, also called a company debit card or commercial debit card, is a payment card linked to a business account. It allows authorised employees of a business to make purchases, withdrawals, or online transactions directly from the company's bank account, which in turn helps the company accountant to keep track of its expenses conveniently.

Difference between a business debit card and a normal debit card

As the name suggests, a business debit card is linked to business accounts, while a normal debit card is linked to personal accounts. In terms of usage, they are the same. Still, their features and benefits vary – mostly on the line that the former offers an interest-free spending authority to the company's employees. At the same time, the latter is aimed at offering rewards/cashbacks to individual users.

Benefits of business debit card

While there are many benefits of a business debit card that overlap with a personal debit card - like spending limits, security, and online tracker - there are some key features that give it an edge when used in a company’s context:

Multiple Cards: Most business debit card accounts allow for multiple cards to be issued. Thus, granting access to different employees or departments to the same bank account.
Detailed Reports: Business card reports are designed to handle complex expense tracking, reconciliation, and tax planning.
Integration with accounting software: Many businesses have in-house accounting software to handle finances. These business debit cards can be integrated with them.

Implementing a debit card for business expenses in your company

Since a business debit card is used by multiple people from different teams doing separate tasks, it is important to have them all on the same page to ensure an efficient functioning of its features/benefits. So, experts advise the following steps to effectively implement a business debit card in a company:

Choose the Right Card: Select a card that aligns with your business's size, spending habits, and required features.
Set Clear Spending Policies: Establish guidelines for card usage, including authorized users, spending limits, and acceptable expenses.
Train Employees: Educate employees about the card's features, security measures, and responsible usage.
Monitor Spending: Regularly review transaction data to identify spending patterns and potential discrepancies.
Reconcile Accounts: Match card transactions with accounting records to ensure accuracy.

Endnote

Looking at what a business debit card can offer, it is safe to say that such a card is not just a tool and is mostly a financial partner to a small business owner. By implementing a business debit card system in your company, you can empower employees with efficient financial decisions and maintain accurate financial records. So, carefully assess your business needs, choose the right business card provider, and establish clear policies for its corporate usage to make the most of it.

FAQs

1. Can I get a debit card for my business?

Yes, most banks offer a business debit card that can be linked to your business account.

2. Is a business debit card a corporate card?

They are mostly the same in working, but typically, the features/services of a business card are tailored for small businesses, while corporate cards are suitable for midsize and larger companies with complex banking needs.

3. What happens if I use a business debit card for personal use?

While the card would work as normal, it can lead to accounting issues and tax complications.

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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.