Credit Card Solution

Issuing employee credit cards is an excellent way to alleviate and allocate the fiscal responsibilities of managing and operating a business. Many small to medium-size businesses have a moderate employee base, with supervisors, managers, and administrators often needing access to funds for supplies and company investments. In the interests of time and productivity, many business owners choose to issue credit cards to their employees, which are all linked to a single business credit card account. Employee credit cards offer a number of benefits, including centralized expenditure tracking, fewer financial administrative duties, and simplified tax accounting. The following information provides tips and techniques which can be employed to manage employee credit card accounts and ensure the safety of company funds.

Establishing Acceptable Use

The first step that any business owner should take, after issuing employee credit cards, is to establish a detailed and professional policy which outlines what types of purchases and transactions are considered to be an acceptable use of company credit cards. Each employee should receive and sign a printed copy of the acceptable use policy, acknowledging and agreeing to its terms of use. Within this policy, rules should be established which clearly explain the consequences of abusing access to company funds. Obviously, lesser offenses should be punished with more lenient penalties. The acceptable use policy should also include information pertaining to submitting receipts and accounting, and a comprehensive list of permitted and forbidden purchases and transaction types.

Monitoring and Supervising Company Expenditure

Using business credit monitoring services and thoroughly reviewing card statements is the best way to proactively monitor and govern the use of employee credit cards. Keep an open dialogue with employees about recent purchases, and don’t be afraid to confront an employee about questionable transactions. Ideally, it is best to utilize a business credit card account which offers additional security features, such as filters, purchase limits and credit alerts which notify the account owner of suspicious activity via e-mail and/or phone.

Allocating Authority and Educating Employees

Employees with higher ranks and greater trust within the company structure could be given higher credit limits and access to more transaction types, such as cash advances and online transfers. Each employee should be assigned a credit line which is suitable for their job position and typical company spending habits. Employees should be taught what their cards are and aren’t supposed to be used for, in order to minimize unnecessary mistakes.

To recap, managing employee credit cards consists of three main focuses; choosing a business credit card account with suitable terms, establishing clearly defined limits and spending restrictions before issuing cards and proactively and professionally monitoring expenditure.

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