Real-Time Reporting

Non-Profit Business Credit Cards: Why U.S. Bank’s Spend Management Platform is a Game-Changer 

Learn how you can take the stress out of tracking and reconciling your non-profit expenses 
Written by:
Cody Nelson

Non-profit organizations play an important role in helping people. According to the National Center for Charitable Statistics, there are over 1.8 million non-profit companies in the U.S.

These organizations are charitable companies primarily focused on caring for people and their social causes. It also includes organizations advancing social movements, protecting children, protecting specialized groups of animals, supporting religious movements, or promoting mental and physical wellness or recovery.

Similar to for-profit organizations, non-profit organizations typically spend money for supplies in order to accomplish their mission. Many non-profits are funded by federal or state governments, making it important that their spending is strictly monitored, and their bookkeeping is both timely and accurate. For this reason, these organizations often consider nonprofit business credit cards for payment processing to minimize employee/volunteer reimbursement, fraud protection, and strictly track their spending.

What is a Nonprofit Business Credit Card?

For non-profit companies, tracking and consolidating your business expenses is priority; that’s where credit cards for non-profits become useful. Non-profit credit cards are credit cards designed for non-profit founders, executives, or employees to use on expense purchases while simultaneously earning rewards and cash back. As people spend, they spend within their allotted line of credit (just as any other credit card) and pay down their balance over time towards debt settlement.

The executives of a non-profit organization often make most business-related purchases with these credit cards; however, sometimes they let their employees use them on a need-to basis to avoid end-of-month reimbursements.

Nonprofit Credit Cards vs Employee Reimbursement

With employee reimbursement, you run the risk of lost receipts or expense misrepresentation. In some instances, employees may try and submit personal expenses and claim they were business-related purchases. This is one of a few ways nonprofits can suffer from financial loss (fraud). By switching your payment systems away from reimbursements and moving to a nonprofit credit card, you can improve your spend management and gain a better degree of internal control.

A nonprofit business credit card is a sufficient alternative to employee reimbursement. Instead of employees paying out-of-pocket for supplies, executives of a nonprofit distribute them amongst their staff so they have their own card to use when needed.

With decreased admin transaction visibility, credit cards also have fraud loopholes of their own. Allowing employees to use any traditional nonprofit credit card without oversight may create an increased risk of fraudulent activities if cards are used dishonestly. It’s important to know what kinds of fraud your organization can experience, and which options are the best nonprofit credit cards for minimizing this risk.

Avoiding Nonprofit Fraud

It’s important for non-profit companies to know the different types of nonprofit fraud that can occur in order to know how to prevent it. According to the FAU College of Business, out of the 9% of fraud committed in the nonprofit sector, nonprofits lose a median of $75,000/year. Although not always frequent, when nonprofit fraud does occur, it can be crippling.

Common types of non profit fraud may include:

  • Skimming: external fraudsters get hold of card information through credit card scanners
  • Deceptive fundraising: raising money for personal gain without the intent to allocate donor funds to fundraising cause
  • Payroll fraud: embezzling funds from the company payroll system
  • Credit card abuse: using a company credit card dishonestly behind-the-scenes (mentioned previously)
  • Misrepresenting the number of charitable donations reported: intentionally reporting inaccurate fundraising to keep under-the-table profits or to boost value

Each of these instances presents its own set of challenges; it further emphasizes why implementing spend control systems and transaction tracking in your business spend management processes are key to avoiding these scenarios.

The Challenges of Tracking Non-Profit Business Expenses

Outside of spend controls to minimize fraud, one major aspect of managing a nonprofit is making sure all expenses are tracked and accounted for. According to GrowthForce, 26 states require nonprofits to receive an audit once they reach $1 million in profitability; this law, however, varies form state-to-state as to when (and how frequently) nonprofits experience such audits.

With that said, it’s imperative to make sure every dollar is reconciled accurately. Many nonprofits have volunteers that aren’t paid employees running their operations. These volunteers offer their services to companies that support a cause they believe in unpaid. Sometimes these volunteers, although not paid from these organizations, have out-of-pocket expenses they pay for themselves to help accomplish the day-to-day operations of their organization. Once they make these purchases, they often submit expense reports along with physical receipts to receive reimbursement from their nonprofit at another time.

Why could this cause challenges? For volunteers, they may either be unwilling to pay out-of-pocket for expenses without regular compensation, or they may be inconsistent in submitting expense reports. More specifically, it’s more challenging to ensure nonprofit organizations receive real-time transaction tracking and timely expense submissions when utilizing employee reimbursement or other methods of expense payments (such as cash stipends or per diems). This is where U.S. Bank credit cards for nonprofits are most useful.

Traditional Non-Profit Credit Cards vs U.S Bank Spend Management

Traditional nonprofit credit cards offer organizations some basic features: 

  • A line of credit (sometimes paid down over time)
  • A means to purchase supplies
  • Cash back/rewards on purchases
  • End-of-month bank statements
  • The ability to turn cards on/off from a mobile app (varies based on credit card)

U.S. Bank credit cards for nonprofits, however, offers a variety of alternative features that most other credit cards don’t: 

The advantages of U.S. Bank credit cards for nonprofits solve many challenges of handling nonprofit business expenses in a few different ways:

  • Eliminates the need for employee reimbursement or petty cash by giving each employee their own card
  • Each employee card has pre-set spend controls and spend limits to prevent specific kinds of spending
  • They’re easily replaceable; each can be turned on/off in real-time from a smartphone app
  • Organizations can track their spending in real-time
  • Employees/volunteers can submit receipts digitally, eliminating expense reports
  • Admins can customize their company policy expectations when using these cards

One large advantage that U.S. Bank Spend Management offers nonprofits is the ability to streamline their accounting. Not only can transactions be auto-categorized, but they are reconciled in an accurate and timely manner prior to weekly, monthly, or yearly audits.

Nonprofit Accounting with U.S. Bank Spend Management

It’s not just the physical spending logistics of your business expenses that need to be monitored; it’s the backend bookkeeping as well. Accounting for nonprofits involves the processes and programs that your organization has in place to track your expenses, reconcile your accounts, and assure that your funds are being spent properly. Aside from tracking regular business expenses, admins must also track both grant funding and expenses used from those grants.

As mentioned previously, accurate reporting and accounting is vital to the well-being of a nonprofits financial standing. Inaccurate, imbalanced, or unmatched transactions can ultimately cause many issues when audit time comes around. They can also raise concerns amongst your donors or financial funding. Having a solution that includes modern strategies prevents financial losses, creates greater transparency with stakeholders, and streamlines processes to be as accurate as possible. Correct reporting and protecting your cashflow is ultimately what helps a nonprofit grow in efficiency and financially.

With U.S. Bank credit cards for nonprofits, organizations have access to the best nonprofit credit card capabilities: 

Here’s why this is significant:

  • Real-time transactions sent directly to your phone notifications (convenience)
  • Your accounting software already has your transactions reconciled and ready for audit
  • Your transactions code themselves, saving you manual effort and giving you accuracy
  • Pull transactions from any card, anytime without guessing
  • No more waiting for monthly statements to come in; get them when you need them
  • Eliminate physical receipt stacks or expense reports

Minimizing any accounting errors or mishaps is fully feasible when knowing and implementing the best modern nonprofit credit cards offered to nonprofits.

The Bottom Line

U.S. Bank Spend Management is a spend management platform that provides nonprofit organizations with the kind of streamlined business expense tracking needed to save time, money, and effort for your business. From point-of-spend purchasing to transaction reconciliation, you can completely automate your businesses expenses. The controls and reporting that admins have on this spend management platform can help businesses with cash flow protection, scale smarter, spend efficiently, reconcile accurately, and ultimately grow their business.

Give yourself the peace-of-mind needed to successfully grow your nonprofits movement; worry less about the elements of your business you can control.