Answered.
If your company issues corporate credit cards, you should compile a policy that sets out how your employees must use them. This helps to avoid credit card misuse, either accidental or deliberate, reducing the risk of issuing corporate credit cards. The policy needs to be clear and easy to understand. It should include:
Corporate credit cards can only be used for business expenses, never for personal spending. Only the named cardholder may use their corporate credit card – it’s not to be shared with colleagues. Cardholders are liable to repay anything that they spend that’s outside the company’s expenses and corporate credit card policy, so they are responsible for understanding the rules and limits.
It’s a good idea to set reasonable limits. These might be different for different employees. For example, an international sales professional will likely spend more on overseas travel and accommodation than someone who’s mainly based in one office location. Some corporate card providers issue alerts when employees are nearing their spending limit. This warns the employee that they may need to request extra clearance, and flags higher than expected spending to the finance team.
Some items may need extra approvals – for instance, high costs like overseas flights, or spending on leisure activities for client entertainment or staff events. List these exceptions clearly and explain who needs to approve them and how to request it. This will help your employees gain clearance for necessary expenditure in good time.
Another exception might be for spending on personal expenses in extreme situations. If your employee is in danger or has a genuine need, you could allow spending on essential transport or accommodation – but the policy needs to stipulate the exact circumstances and how the employee should let you know this has happened.
Your organisation needs a clear record of spending on company credit cards, to keep control of costs and adherence to policy. Set out specifically how employees should retain and share receipts, and how and when they can reclaim money spent on the credit card if the bill comes directly to them. If your organisation pays the bill, you need to make sure the employee has provided business justifications and receipts for every item charged, before the credit card balance payment is due.
Corporate credit cards may have high limits, so if they’re lost, the company could stand to lose out from fraudulent spending. It’s important that employees know they must report the loss of their card immediately and how to do so. Make sure this process is clearly agreed with the corporate card provider, so they can cancel cards instantly if they go missing. Explain the process and timescale for getting a replacement – it may impact your business if customer-facing employees can’t pay for essential travel because of a corporate credit card theft.
Employers need to monitor spending on company credit cards, to make sure the usage policy is effective and to keep track of budgets and usage. A modern expense management system that’s integrated with corporate credit card provider systems can help minimise risk and provide accurate data about who’s spending what, when and where. Leading systems can generate real-time reports at the touch of a button, highlighting spending exceptions or trends that need reviewing.
