Corporate travel card or travel advance: which to choose

Every company that sends employees on the road has to settle a practical question: how will travelers pay for the expenses that come up during the trip, such as meals, taxis, parking and small work-related costs? The two most common answers are the corporate card and the cash or bank-transfer travel advance. Each one affects financial control, the traveler’s routine and the workload of whoever closes the expense report in a different way.

There is no single right choice for every company. At ArrowTur, which has been managing corporate travel since 1989, we see companies that run smoothly with cards, others that still rely on advances, and many that combine both models depending on the traveler’s profile. Below we explain how each option works, its pros and cons, and the criteria that help you decide.

How a travel advance works

With an advance, the company deposits an amount into the employee’s account before the trip, based on the number of days away and the limits in the travel policy. On returning, the traveler hands in the receipts and the finance team checks what was spent: if money is left over, the employee returns the difference; if they spent more within the rules, the company reimburses them.

The model is easy to start and does not require any banking product. On the other hand, it means manually tracking open balances, chasing refunds and reconciling every trip, which usually leads to delays and rework as travel volume grows.

How a corporate card works

A corporate card is issued in the company’s name, with one card per traveler or per department, and with limits set by the company. The employee pays expenses with the card, and transactions appear on a statement or an expense management platform, usually broken down by user. Many issuers let you block merchant categories, set daily or per-transaction limits and follow spending almost in real time.

The traveler does not use personal money or have to return any balance. The company gains visibility, but it still needs tax receipts for accounting and a check that each expense complies with the policy.

Pros and cons of each model

Travel advance

• Advantages: easy to set up, works with suppliers that only take cash or Pix (Brazil’s instant payment system) and gives the traveler a fixed amount to manage.
• Disadvantages: company money sits with the employee, balances to be returned pile up, checking is manual and the company only knows what was spent after the trip.

Corporate card

• Advantages: automatic record of every transaction, configurable limits and blocks, less cash handling and faster expense reports.
• Disadvantages: the product has to be contracted and managed, cards must be issued and cancelled as people join and leave, and clear rules are needed for personal expenses charged by mistake.

Criteria for deciding

A few questions help you pick the right model, or the right combination:

• Travel frequency: people who travel every week usually benefit from a card; someone who travels twice a year can stay on advances without much administrative cost.
• Volume of expense reports: if finance spends days checking receipts and chasing refunds, a card cuts that work.
• Type of trip: field teams in small towns may need some cash, because not every supplier accepts cards.
• Need for real-time control: companies that want to see spending during the trip, not only afterwards, gain from a card.
• Travel policy: if the company pays fixed per diems for meals, part of the expenses may not go through an expense report at all, which changes the math.

Many companies use a mixed model: cards for frequent travelers and advances for occasional trips or destinations where card acceptance is limited.

What the travel policy should define

Whatever the model, the rules must be written into the travel policy so that travelers know what they can and cannot pay for. The minimum points are:

• which expenses can be paid with the card or advance, and which stay with the company or the agency, such as flights and hotels;
• limits per category (meals, local transport, parking) and per day;
• deadlines for submitting the expense report and returning any advance balance;
• required receipts and what to do when a receipt is lost;
• how to handle a personal expense charged to the card by mistake;
• who receives a card, who approves an advance and who cancels the card when someone leaves the company.

Keep flights and hotels off the traveler’s tab

An effective way to reduce the amount that goes through cards or advances is to take the largest expenses out of them. When flights, hotels and car rentals are booked by the agency and billed directly to the company, travelers only handle day-to-day costs. Card limits can then be lower, advances get smaller and the checking focuses on a few expenses.

Direct billing also makes spend analysis easier, because transport and accommodation costs arrive organized by traveler and cost center, without depending on individual expense reports.

Corporate travel cards and ArrowTur

ArrowTur takes care of the heaviest part of the travel budget: we issue flights and book hotels and car rentals within the company’s policy, and we bill centrally, with reports by traveler and cost center. That way, the corporate card or advance is reserved for day-to-day expenses, and finance reconciles fewer items. We also help write the expense payment rules into the travel policy and point out where the current model creates rework.

Our team is available Monday to Friday, 7 a.m. to 7 p.m. (Brasília time), with emergency support outside those hours. Learn more about our corporate travel management and talk to our sales team by phone at +55 11 5189-4120, on WhatsApp or through our Contact Us page.

Read also: Travel expense reimbursement: how to organize expense reports.

Frequently asked questions

Does a corporate card remove the need for expense reports?

No. It records transactions automatically, but the company still needs tax receipts and a check that each expense complies with the policy.

Can we use cards and advances at the same time?

Yes. A mixed model is common: cards for frequent travelers and advances for occasional trips or places where card acceptance is limited.

Should flights and hotels be paid with the traveler’s card?

It is usually more practical to have them booked by the agency and billed directly to the company. The card then covers only day-to-day expenses, with lower limits and simpler checks.