Spend Management
Spend management is how a company plans, approves and tracks its spending outside payroll. It brings corporate card payments, employee expenses and supplier invoices into a process with budgets, limits and approval responsibilities. Finance teams use these controls to see who is spending company money, for what purpose and whether the purchase fits the agreed budget.
Corporate cards, including virtual cards for online purchases, provide one way to apply spending limits before a payment takes place. Expense records and invoice approvals then connect the payment with its business purpose and accounting entry. The process combines control before money leaves with the records needed to review and reconcile the company's purchases afterward.
Spend management and expense management
Expense management deals with money employees have already spent from their own pocket and want back. Spend management starts earlier: it covers all non-payroll spending, including card payments, expense claims and supplier invoices, as the Spendesk glossary puts it. The Hackett Group counts budgeting, purchase approvals, supplier selection, contract compliance and spend analysis among its activities, and Amazon Business stresses that it gives visibility before the money is spent.
Corporate cards and virtual cards
Spendesk names shared company cards and petty cash as the weak points, and the tools that replace them are prepaid cards with an individual limit for each employee and virtual cards for online payments. A virtual card has a card number but no plastic, so it can be limited to one merchant, one amount or one period.
Issuing a payment card is a payment service. Section 1 (1) sentence 2 no. 5 of the Payment Services Supervision Act lists the issuing of payment instruments, so a card issuer in Germany needs a license as a bank, payment institution or e-money institution. A provider without its own license issues cards through a licensed partner, the model described on the embedded finance page.
The EU rules for commercial cards
The EU caps the interchange fee on consumer card payments, but Article 1 (3) of the Interchange Fee Regulation excludes transactions with commercial cards from the caps. Article 2 (6) defines a commercial card as a card issued to businesses, public sector bodies or self-employed persons, limited to business expenses and charged to their account. The card scheme fees page explains what a merchant pays on such a transaction.
Strong customer authentication has a corporate exception too. Article 17 of the regulatory technical standards on SCA allows payment service providers to skip it for legal persons that pay through dedicated payment processes only available to businesses, once the supervisor is satisfied that these processes are at least as secure.
Upcoming payments and treasury events in Germany
Finance Loop and corporate cards
Finance Loop is the meeting place for card issuers, banks, payment institutions and the finance teams who use corporate cards. Finance Loop connects the finance, IT and AI communities in Germany, Austria and Switzerland, with events in Frankfurt, Munich, Berlin and Hamburg.
Finance Loop supports When Banks Say 'No', a half-day payments seminar in Frankfurt for compliance, treasury, finance, export and legal teams on blocked payments, de-risking and sanctions. Finance Loop is also media partner of Capital & Code, a Frankfurt conference whose audience includes corporate treasurers who manage liquidity and risk.
Payments & Digital Money
Risk & Compliance
What is spend management?
Spend management is the set of processes and tools a company uses to plan, approve, pay and analyze its non-payroll spending, from card payments to supplier invoices.
What is the difference between spend management and expense management?
Expense management reimburses employees after they have paid. Spend management sets limits and approvals before the money is spent and covers cards and supplier invoices as well.
What is a virtual corporate card?
A virtual corporate card is a card number without a physical card, issued to an employee or for one purpose. A virtual corporate card can be limited to one merchant, amount or period and switched off after use.
Do the EU interchange caps apply to corporate cards?
No. The Interchange Fee Regulation excludes transactions with commercial cards, which are cards issued to businesses, public bodies or self-employed persons for business expenses.
Spend management and Finance Loop
Finance Loop covers corporate cards and spend management in its Payments & Digital Money track, next to card issuing licenses and the EU card rules. Finance Loop supports the payments seminar When Banks Say 'No' for treasury and finance teams. Dates are on the events page.
Finance Loop is a professional network supporting the institutional use of emerging technologies in finance, such as AI, digital payments, cloud and blockchain solutions. Finance Loop helps its members build skills and personal networks in these fields: Investment & Digital Assets, Payments & Digital Money, Digital Infrastructure & Sovereignty, and Risk & Compliance.