6 top tips for managing company credit cards

For employees who regularly travel and incur sizeable business expenses, the expectation to use their own funds to cover the cost can not only potentially cause them personal cashflow problems, but also mean they are reluctant to travel, missing key business opportunities.

Ultimately, this can affect employee retention.

One of the most convenient ways to handle this, is with company credit cards. Also referred to as corporate cards, company credit cards are issued to employees of established companies that allows them to charge their authorised business expenses—such as hotel stays and plane tickets—without using their own card or cash.

Company credit cards, however, do introduce another set of challenges for any business, including the added costs of maintaining the cards as well as managing new employees or leavers. There is also the risk of fraudulent transactions, which are not approved business expenses.

We have put together our 7 top tips for managing business credit cards, to help reduce the risk of fraud and limit liability.

Set clear expectations

How do you want the company credit card to be used? Once it has been decided, it is crucial that the expectations are clearly laid out and communicated to your employees.

The best way to do this is with a watertight expenses policy. Make sure there is a section specifically for company credit card spending.

Limit liability

The responsibility of repaying a company credit card normally lies with company, meaning it is liable for any expenses incurred, including unapproved business expenses or personal expenses.

Ensure that employees are only given credit limits that they need.

There can be a temptation to misuse a company credit card, and therefore it is crucial to have written in policy the consequences of unauthorised expenditure. This should include the arrangements for repayment of funds as well as any disciplinary action.

Control card issuing

Issuing an employee with a company credit card involves a large element of trust. Make sure the employees receiving cards are reliable and trustworthy.

Perhaps you can consider criteria for employees to be eligible for company credit cards? Including length or service or position in company?

It is also important to ensure that when an employee leaves, the use of their card is restricted as soon as possible.

Monitor spend

With the increased risk of fraud, it is important to closely monitor spending. Most card providers will issue monthly statements, but a lot can happen in a month! To prevent any nasty surprises, consider enable internet banking for authorised finance users who can monitor spend weekly, or even daily.

Some card issuers will also allow restrictions on an individual card basis. For example, you may choose to stop the ability to withdraw cash or prevent online spending. Check with your card issuer if this is possible.

Finally, if employees are regularly overspending, consider sanctions.

Insist on receipts

Even though the expense has already been incurred, making sure employees know they are still expected to provide receipts is important.

Again, this should be documented in your employee expense policy.

Employees may argue that the credit card statement description provides the evidence of the expense. This may be the case for something like train travel. However, what about a Sainsbury’s transaction for example? Insisting on the accompanying receipt provides clear proof of exactly what money has been spent on.

Not only that, but with a receipt, there is also the possibility of reclaimable VAT which would otherwise be forfeited.

System for approval and control

Using an expense management system like MyExpenses allows employees to reconcile company credit card lines with their expense receipts.

This allows for a smooth process of approving and monitoring expenditure on company cards.

It also encourages good behaviour from employees who know they will be accountable for their expenditure.