While the two martini lunch is a thing of the past in most
industries, there are still lots of positions where spending company
money is part of doing your job. Obviously business travel is a big
one, but there are other things like buying materials, attending
events, and still - taking clients to lunch.
Processing expense reports can be a full time job - reconciling
receipts and making sure all purchases follow corporate policy can be
labor intensive. Many companies use corporate credit cards so that they
have access to transaction records and can limit overall employee
spending. An interesting alternative to traditional corporate credit
cards is the prepaid Visa card from PEX Card.
It works more like a debit card than a gift card, and has online
management tools that let you control the “what” in addition to the
“how much” being spent. There is no cash access from ATMs or anywhere
else (like getting cash back at the register with a regular debit card)
so all spending is tracked just like a credit card statement.
We asked Toffer Grant, CEO and Founder of PEX Card, to give us the full scoop.
How does the PEX card, managed online, save time with employee reimbursement?
Business owners save time with employee reimbursements because PEX
Card is an alternative to making employees pay out of pocket. Companies
use PEX Card to cover expenses at the time of purchase instead. In some
industries this is the norm, but for others the lack of credit
availability is pushing them in this direction. Floating purchases off
on employees or the credit card companies is more difficult to do now
and PEX Card's tools make handling cash-based spending easy to manage
and there are no high interest rates or maxed credit lines.
How does it help control and/or better manage employee spending?
Features of PEX Card enable businesses to issue cards that start
with a zero balance and fund as needed. Imagine an employee at Home
Depot ready to purchase $300 worth of supplies for a job - he can call
his boss and relay the total. The employer can log in to our site and
fund the card with the exact amount and - boom - the transaction will
go through right then and there. Logging in, funding and logging out
takes less than thirty seconds to complete.
Businesses that don't want to manage every single spend that way can
set up card automatic reload features, or budgets, that top up card
balances on a schedule or when a card is spent down to a bottom-end
amount set by the owner.
Spend rules limit where cards can be used and can cap an employee's
daily spending. Owners can activate or deactivate spending in any of
nine categories that are based off of Visa's merchant category code
system (i.e. can make travel purchases, but not restaurant/bar
purchases).
Because employees cannot spend more than the balance given - the system keeps them on budget and the spend rules prevent misuse.
Does it really cut down on paperwork?
PEX Card cuts down on paper work because everything can be done
online. Transactions post to the admin and cardholder sites as they
occur, statements appear online.
Can PEX cards also cut down on employee theft or overall misuse of funds?
Yes, spend rules prevent employees from using cards at unauthorized
locations and daily limits regulate how quickly money goes out the
door. Most small business credit cards, for example, offer the ability
to adjust an employee's credit limit, but nothing prevents the employee
from spending zero to $X whenever they want. Also, because each PEX
Card has an individual balance that can be adjusted quickly, at any
time, owners can micro manage funds as closely as they wish.
Owners can also toggle a card block feature to freeze spending during off hours or vacations.
How does it work?
When first getting started, we ask businesses think about simple
process for managing their program - i.e. taking card fund requests
from employees, how frequently to move money from their business
checking accounts to their account with us and reconciling/tracking
purchases. Then they determine which employees will get cards and how
much money to place on deposit in their PEX Account - the main business
account where funds are stored.
Admins register employee name and address detail to create cards which arrive in 7-10 business days via USPS.
Funds in the PEX Account appear as a line item for the business and
each card balance starts at zero. To fund a card the admin types in a
desired amount into a "Quick Fund" field and clicks Submit. The
business balance debits by the entered amount and the card balance is
adjusted instantly.
To view card transactions, the admin clicks the name of the employee
and the screen expands to show all the funding credits and spending. To
see additional detail about a transaction, they click the transaction
for a deeper view, i.e. time, location, etc.
As funds are spent, the business will have to add more funds to the
program. Deposit requests can be made through our site or money can be
wired into their account. When a funding request is made through the
site we turn an electronic ACH request around to their bank, they
respond with funds and we post the money for the business - it takes
about four business days to complete. Wire transfers can be completed
in one/same day, but their bank may charge a fee. Once funds post to
their account, the business can add funds to cards, which is an instant
transfer.
Spend rules can be set by adding/removing check marks on the spend
category grid and daily spending is as simple as defining an amount and
clicking a submit button. The system automatically declines
unauthorized spending attempts or when limits have been reached to
prevent loss for the business.
Transactions post as they occur, so card and overall business
balances are accurate up-to-the minute for accurate cash position.
There is a dashboard page providing a summary of funds, card count, and
how much has gone out the door for that day.
What are the costs?
There is a one-time application fee of $49.95 for the business and
monthly subscription fees per card that are tiered based on the number
of cards issued:
1-10 cards = $19.95 per card per month
11-50 cards = $9.95 per card per month
The first two months are a trial period free of monthly service
charges, which starts the first of the month following sign up - i.e.
submit an application in July, you won't be charged monthly fees until
October 1. We debit fees out of the PEX Account, not card accounts.
There are some ancillary costs charged per event, such as card
replacements ($5), over night card shipping, moving funds back to a
checking account, and some others.
Customers can move money within the system an unlimited number of
times, no fees for transactions, no fees for depositing money, no fees
for customer support, no fees for spend rules or any of the other
features in the system, so all they have to budget for is the monthly
fee.
If a business spends in excess of $50,000 in a month, the fees for the following month are waived.
