Benefits, Precautions in Issuing Business Credit Cards to Employees



Business credit cards are easy, cost-effective ways to control expenses. Truly, they’re a great small business tool to pay expenses and to manage your cash.

Indeed, there are dos and don’ts to remember in case you’re one of those entrepreneurs who trust your employees to use a company credit card.

If you don’t trust employees to honestly use a business credit card, chances you can’t trust them in other matters. In that case, what you need are management tips.

But there are reasons why business-credit cards for trusted employees make sense.

David Castillo Dominici investigation1. Saving time and money

You’ll save money and time by not writing checks. With each credit card purchase, you’ll get an itemized documentation.

Not only will you benefit by not having to write as many checks for expenses, you won’t have to monitor and pay reimbursements for employee expense accounts. You simply write one check to the credit card company.

Employees appreciate the chance to save time on their expense reporting. Great salespeople often dislike spending time on minutiae in expense reports.

2. Averting emergencies

For instance, if you are facing a deadline to prepare for a trade show and are suddenly hit by an unexpected expense the night before the event, a credit card will solve immediately solve the problem.

3. Discounts and Reward points

You’ll be able to earn significant discounts and rewards. For even small businesses, there are thousands of dollars in benefits.

4. Preventing bogus claims

When employees pay cash or write checks, many have been known to pad their expense accounts.

5. Accessing extra cash

You might want to consider a card that comes with a line of credit. Every now and then you might find it advantageous to tap some quick cash. (But beware of the interest rate on such accounts, so immediately pay the balance.)

“Whoever is careless with the truth in small matters cannot be trusted with important matters.”

-Albert Einstein

Due diligence

Should you decide to give a business credit card to employees, there are several ground rules to implement.

1. Spending limits

Be sure to incorporate tight spending limits, and merchant category codes (MCCs). You should insist on specific MCCs.

By way of explanation, you’ll want your employees to properly entertain clients at lunch. But you don’t want them to pay for their home upgrades.

You can specify which merchants can’t be utilized, and you can set up preferred supplier lists.

2. Written rules

Develop your guidelines in the form of a policy. Have your employees read and sign an agreement that indicates they understand the rules. They must know what they can and cannot do.

3. Review credit-card statements

Trust your employees but verify. Regularly review credit card expenses by tracking your charges online. Require employees to turn in their receipts. Immediately talk with your employees about any red flags.

4. Control rewards and rebates

Don’t make the mistake of allowing your employees to take advantage of the myriad of reward points you accumulate from their purchases. That is unless, of course, you decide to make the points a perk to your employees.

Activate the reward features on your business card account and enjoy the benefits.

If you trust your key employees and use due diligence, issuing business credit cards will help employee morale and will save you time and money.

From the Coach’s Corner, more tips in accounting and finance:

You Can Creatively Manage Your Cash Flow 7 Ways — If you’re taking the pulse of your business, of course, the first thing to consider is your cash flow. If your cash flow is poor, you feel poor because you can’t pay the bills nor can you use money for what you’d like to do. Your image can also suffer with vendors or with customers, if you don’t manage your cash flow.

Applying for Bank Loan? Here’s How to Shorten the Process — Business owners generally have two concerns when trying to get a bank loan or line of credit. Either they can’t qualify or they face scrutiny beyond belief. Wouldn’t it be great to save time and shorten the process?

Best Practices for CFOs to Stay Current in Technology — Just as every professional knows, CFOs also find it increasingly challenging to stay up-to-date on technology. Up-to-date technology means CFOs can better do their jobs. Here’s how.

Finance Checklist for Strategic Planning, Growth — Strategic planning in finance for growth means avoiding trendy fads. Instead, it requires an ongoing down-to-earth approach in order to create value. Here are seven steps.

5 Business Tips to Avoid Problems with an EMV System — To make it tougher for consumers to commit credit card fraud and to make it easy for businesses to avoid charge-back liability, credit card companies are issuing EMV cards.

“Whoever is careless with the truth in small matters cannot be trusted with important matters.”

-Albert Einstein


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





Photo courtesy David Castillo Dominici at www.freedigitalphotos.net

Seattle business consultant Terry Corbell provides high-performance management services and strategies.