Some employees who prove their capabilities and their loyalty to the company through their exemplary performance are often given incentives, such as cash bonuses, all-expenses-paid trips, or company credit cards. The latter is one of the things that most employees want to have. However, if there are no safeguards in place, a company-issued expense card is vulnerable to misuse.
Benefits to employees and company
An expense card is a better option for employees who travel regularly. The employee does not have to bring extra cash or advance the traveling expenses. If the employee has to stay longer due to unavoidable circumstances, he/she does not have to worry about the additional expenses. A company credit card helps the company keep track of the expenses incurred by each employee.
Managing the use of company cards
Trust is a highly valued trait. But money is such a temptation, and some unscrupulous employees tend to abuse the trust the company bestows on them. It is costly when an employee abuses or misuses the company’s credit card. So what should a company do to minimize or prevent the risk of corporate card misuse?
Establish limits on spending
If you often send employees on official business trips, your accounting department already has data on the average costs of hotel rooms, travel fares, food, and entertainment expenses. Therefore, it is easier to set caps on spending, so the liability is limited. Accounting should conduct a regular review of company credit card use, to prevent abuse and keep the spending within reasonable limits.
Specify expectations
It is essential for your company to be explicit about the use of the company credit card. Make sure that the users know what the company expects from them and their responsibilities. Set specific guidelines on what types of expenses are allowed and the proof of purchase they should submit for each item.
Control corporate credit card issuance
You can establish better control over corporate credit card use when you establish the guidelines on who is eligible to receive a credit card from the company. Setting control over issuance and the expenses you allow employees to charge will help minimize abuse.
Monitor corporate credit card charges
Your accounting department should closely monitor all the expenses charged to the card. It is easy to overlook some items that are for personal use. Require employees to submit a receipt for every purchase they charge to the credit card.
Joint responsibility
You can exercise more control over the use of a corporate credit card by establishing shared responsibilities. The approving manager or the supervisor should also be responsible for the use of the credit card. They should be the first ones to accept and review all the charges before the expense statement is sent to the accounting department.
Entrusting a corporate credit card to some employees empowers your staff. Likewise, it is a better way to manage and control expenses, and setting guidelines and limits will prevent misuse.