Why Your Finance Department Should Believe In Ghost Cards

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No doubt about it, ghost cards (shared corporate card accounts) can sound scary to finance professionals. They float around an organization with no individual accountability. Possibilities of fraud haunt every transaction, and reconciliation can be a nightmare.

Yet sometimes shared cards are the fastest, simplest and, yes, most cost-effective way to support timely departmental purchases. Properly deployed, ghost cards are a solution that won’t keep you up at night. In fact, we use them ourselves here at PEX.

Streamline the Purchase Process While You Track Expenses

You won’t find “Ghost cards” among the options in PEX software’s “Order Cards” tab. 

The industry calls them ghost cards because, like virtual cards, they have no physical (plastic) presence. But unlike virtual cards, they don’t disappear after a single purchase. They stick around and are not grounded to one cardholder.

Mid- to large-size companies may assign ghost cards to individual departments or projects. (At PEX, the General Administration, Marketing and Sales, Operations departments each have their own virtual cards.) This lets employees make timely purchases without bogging your business needs down in procurement or reimbursement processes. 

To prevent fraud and misuse, each ghost card has spending controls that may include: 

  • All purchase amounts must be below the threshold that would require a purchase order
  • All purchases must be made during select hours
  • A maximum number of transactions per day or week
  • Limiting use to (or excluding use for) select merchant or merchant category codes

Some companies assign ghost cards to specific vendors. If your company frequently or regularly transacts with a single vendor, the ghost card’s spend controls may:

  • Limit all purchases to one vendor code
  • Limit the number of times a vendor can run the card
  • Limit the maximum amount of an invoice that can be charged to the card
  • Restrict payments to pre-approved invoices
  • Restrict payments to the days of the week or month that bills are paid

In both cases, ghost cards save hours and hours in the back office. Finance teams can allocate every purchase made with a ghost card to a particular budget or vendor’s GL code.

On more advanced corporate card platforms, admins program the GL code right into the ghost card. With this approach, allocations, reconciliations, and updates to the accounting software can all be automated. 

How Ghost Cards Improve Your Bottom Line

Ghost cards have a palpable effect on your business results. They can save time, reduce spending, even put cold hard cash back in your account.

  • Reduced Paperwork: All steps considered, it can cost more to document, pay, and record a purchase than the purchase itself. Purchase orders cost $50 – $150 to request and process. Expense reports cost $58 on average. Checks and ACH cost up to $26 each. Ghost cards drive these costs out of routine departmental purchases.
  • Reduced Spending: Admins can set a wide range of spending controls for each ghost card. About half the customers who use our spending controls tell us that they’re employees spent less after the controls went into effect.
  • Improved Expense Tracking: Advanced systems automatically allocate every ghost card transaction to the appropriate GL code, where it’s instantly reconciled and recorded. You save time and eliminate the mistakes that come with manual data entry.  
  • Rebates on Purchases: Ghost card accounts are like other corporate card accounts. If your issuer gives cash back rewards, those rewards go straight to your bottom line.
  • Better Morale: Ghost cards spare employees the hassle of spending their own money, filling out expense reports, and waiting for reimbursement. 

Ghost Cards vs. P-cards. The Winner Is…

It depends.

Like ghost cards, purchase cards (P-cards) let employees bypass typical procurement procedures. A company may order one and issue it to a select employee who uses it on behalf of multiple departments. The cardholder is expected to track and report each purchase with the appropriate GL code. Spending controls, if there are any, tend to be looser. 

These logistics make P-cards better suited to smaller companies. Those with fewer purchases and simpler accounting processes.

Ghost cards are ideal for departmental, project, or vendor use in mid-size to larger companies. Because multiple employees may have access to the card number, your business can respond to business and customer needs. Spending rules help reduce the risk of fraud. And the underlying technology automates reporting, approval, and accounting processes.

However, every company is different. You may need P-cards or ghost cards or some combination of the two. 

Running Ghost Cards, P-Cards, and More from One Dashboard

On modern corporate platforms, the difference between ghost cards and P-cards is in the functionality, not the name. These platforms don’t limit card usage to any one functionality. You can create and manage ghost cards, P-cards, corporate cards, gas cards, and more from one dashboard. You can also create a card that works in a manner that’s unique to your situation and business needs.

The cloud-based software you use to define card functionality can be surprisingly simple and intuitive. Especially when the platform sales and support teams devote manpower and time to helping you to build your solution.

You can see how these platforms work with a free PEX demo. Request yours today. 

There’s no obligation. And nothing to be afraid of.

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