As a way to stay on top of company expenses, my credit card company recently recommended I provide my employees with their own business credit card. If you’re in business for yourself, this has probably happened to you.
The benefits outlined in their sales brochure included detailed online reports with simple, easy to read graphs which allow employers to access exactly how much employees are spending, and where they’re using their business card. They also have a mobile app available, which allows the employee to quickly upload receipts from their mobile phone for matching expenditures. This mobile app allows the owner or office manager to view the receipts online or on a smart phone from anywhere, at anytime.
While technology is great, and the advancements allow a business to do more with less—beware. If you use these innovative techniques, you must establish the infrastructure and procedures for reporting and reconciling. Establishing spending limits on the credit card depending on the job and trust level of the employee is essential. Always remember that credit card expenditures on a business credit card are the obligations of the company. Make sure the employee knows he/she is responsible for the use of the credit card, and it is for business purposes only. Personal expenses on the business credit card will not be tolerated and could be grounds for termination. Stay on top of expenditures daily, weekly, or monthly depending on your tolerance level. Do not get comfortable or complacent in reviewing or not reviewing reports, because as soon as you do, Murphy’s Law will take effect, thus, “Anything that can go wrong, will go wrong.”
If you are ready to let go and trust an employee the mobile app is the way to go.
1. You can keep track of all employee spending
2. You can adjust the spending limits each billing cycle
3. You can request text alerts when a card reaches an established limit
4. You will feel secure and your employee will feel trusted and empowered
Initially, it’s recommended that you personally set up the accounts for the employee cards and maintain the password to the account. For added security, on a monthly basis, have the paper credit card statements delivered to you unopened, or emailed to you if electronic options are available, as you may do with your company bank statements. Spend some time reviewing the statements, let your employees know you are watching, question a few purchases. Make a copy of the statement for each employee and have each of them number the expenditure and write an explanation on the statement for the purpose of each expenditure: who was involved, what was discussed, and the result. Find out how you can get the copies of receipts downloaded to your company computer and associate them with the credit card payments. This recordkeeping can all be done electronically with PDFs. Guarding your company credit cards and cash are good business practices. Trusting your employees with your money is difficult for all small businesses, but, “In order to grow, you must let go.” That statement is profound, but remember Ronald Reagan’s comment about the Russians, “Trust but verify.”
To learn more about protecting your company’s assets contact Retired IRS Special Agent Edmond J. Martin, Chief Investigator at Sage Investigations, LLC, e-mail: firstname.lastname@example.org website: www.sageinvestigations.com or call 512-659-3179 and let our 26 plus years of IRS experience work for you so you can let go and grow.