Control is the key: A credit card that is used unchecked can do a lot of damage.
Working in the pest management business, we find ourselves on the road solving a multitude of problems. As such, we often require supplies that can’t be planned for, parts for our equipment, fees for the occasional plumber or electrician who helps us out of unintended situations, meals on the go, and other expenses that need to be paid for on the spot.
Enter credit cards for our employees. It’s a perfect way to solve the problem of making payments while on the road.
While distributing credit cards to employees is a great idea, you should have some rules regarding limits and usage to prevent abuse and overuse, including:
1. Only distribute credit cards to employees who demonstrate maturity and fiscal responsibility. It’s important to remember that trust works both ways. You’re able to empower the employees who receive these cards, and show you trust them. This can be positive, if done properly. If you distribute credit cards to your employees but don’t trust them, it can lead to discord — and a possible decrease in productivity.
2. Devise a workable and smart expense policy. This must define the kinds of purchases that are acceptable, the limits on purchases that don’t need approval, how the expenses should be submitted for reimbursement, and whether the company will pay the expense directly. It may be best to have a brief conversation with any employee who will have a credit card, and carefully go over the guidelines. You don’t want to find yourself with charges the employee believed he or she had the authority to make.
3. Trust, but verify. Check your credit card statements regularly, either by analyzing activity online or downloading the transactions into accounting software. I highly recommend doing this daily, as you will know exactly what is being spent and identify any potential fraud immediately. Question every charge you don’t recognize. In addition to the downloads, many credit card companies offer smart phone alerts each time the credit card is used. Depending on the volume of charges, this can get annoying, so perhaps a supervisor, instead of an owner, can monitor charges. This process is important, though, because it allows information to flow in real time. Control is the key: A credit card that is used unchecked can do a lot of damage.
Building a company culture of prudent spending is key to an effective employee credit card policy. If you’ve hired the right folks, then providing business credit cards shouldn’t be an issue. Good employees will know when it’s appropriate to use them, and will follow your direction when you define how the credit cards are to be used.
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