What are funds and how do they work?

On Ramp, funds are the primary unit of spend control. Cards and reimbursements draw from one or more funds, which enforce limits, apply policies, auto-match transactions, and give admins real-time visibility into usage.

Example: A company creates a “Travel” fund with a $3,000 monthly limit. An employee uses their physical Ramp card to book a flight. Ramp automatically matches the charge to the Travel fund, approves it because sufficient funds are available, and updates the remaining balance in real time. If a future charge would exceed the fund’s limit, the transaction is declined or routed for approval based on the fund’s rules.

How funds work in corporate finance

Funds operate through several key mechanisms:

• Spending allocation: Companies allocate funds to specific purposes (such as teams, initiatives, or stipends) based on business priorities, expected outcomes, and risk tolerance.
• Usage tracking: Spend management systems monitor how funds are used in real time, ensuring transactions stay within defined limits.
• Approval workflows: Transactions or requests are reviewed against fund-specific policies and routed to approvers when required before being finalized.
• Dynamic reallocation: Finance teams adjust fund limits or create new funds as business needs change, rather than relying solely on fixed annual budgets.

Types of fund structures

Working capital funds: Portions of available company cash allocated to support short-term operational needs such as payroll, vendor payments, software, or travel.

Restricted vs. unrestricted funds: Restricted funds are limited to specific use cases or merchant categories (such as wellness or education stipends), while unrestricted funds allow broader spending within company policy.

Departmental and project funds: Funds assigned to specific teams or initiatives, often with defined limits and timeframes, to ensure spending aligns with approved purposes.

How funds work on Ramp

• Fund-based limits: Each fund has a defined spending balance and rules that determine whether card transactions or reimbursements are approved or declined.
• Automated alerts: Receive notifications when funds approach or run out of available spend.
• Approval workflows: Route card transactions, reimbursements, or fund-related requests to approvers based on the fund’s policies and remaining balance.
• Auto-matching and visibility: Physical card transactions are automatically matched to the appropriate fund, with real-time visibility into remaining balances across all funds.
• Audit trail: Maintain complete records of fund creation, spending, changes, and approvals for compliance and reporting.

Best practices

• Set clear fund allocation policies that define how funds are created, limited, and adjusted.
• Monitor fund utilization regularly to identify teams or initiatives that consistently over- or under-spend.
• Use automated alerts and declines to prevent overspending rather than discovering issues at month-end.
• Maintain complete audit records of fund usage and approvals to support financial reviews and compliance.