Research shows that 67% of small business owners currently own a business credit card. Are you interested in allowing your employees access to the same privilege? If so, it's important to brainstorm and prepare before unveiling your new plan.
Creating a corporate credit card policy is a great way to outline the rules and regulations around how your team members can use their new cards. You can also use this policy to explain analytical procedures, establish cardholder responsibilities, and prevent future fraud.
In this article, we talk about the nuances of creating an effective corporate credit card policy. We also talk about some of the best practices around managing corporate credit card spending. Read on for more!
Though once a nice-to-have commodity, corporate credit cards are now more commonplace than ever before. Today, about one in five finance departments plan to invest in more company-backed cards moving forward.
This brings us to the question - why is this movement beneficial for businesses? And, what can yours stand to gain from such a roll-out?
The impetus behind the rise of corporate credit card usage is multi-fold. While expense tracking is one benefit, it isn't the only one.
While there's no denying the benefits that a corporate credit card can provide, it isn't without its inherent risks. Any time you issue anyone a credit card, you're trusting that person to be responsible for its use. However, it's all too easy for that piece of plastic to fall into the wrong hands.
Consider this: Of the nearly 450,000 cases of identity fraud reported in 2018, credit card fraud was the most prevalent crime, accounting for nearly 160,000 of them.
But, how can your business avoid corporate credit card fraud?
While there's no failsafe way to completely shield your team, there are a few critical steps you can take to prevent it. Some of the top ones?
A corporate credit card policy is an internal agreement between an employer and their employees. This policy outlines card usage, as well as what constitutes misuse. It is a detailed document that explains everything that employees need to know about their new card, including its:
Ready to draft your corporate credit card policy? Let's review a few important inclusions to add.
One of the essential sections to include is cardholder responsibilities. In this section, you'll explain the steps that employees can take to ensure they use their cards the right way.
Some vital statements to include:
It's also important to discuss which employees must seek higher-level approval before charging their corporate credit cards. For instance, some might not be able to book a flight until their manager double-checks the details.
To avoid overspending, many business leaders establish exceptions in their corporate credit card policy. For instance, you might allow your team members to book a standard hotel room when they travel, but they can't invest in a penthouse suite.
In your policy, you can also outline the specific items that employees are never allowed to buy with their card, including:
A corporate credit card policy is an ideal way to help companies stay competitive and compliant. The key is to make your corporate credit card policy as comprehensive and informational as possible. While the list of critical touch points mentioned-above is helpful, it isn't exhaustive.
There are myriad other considerations to keep in mind at all times, and chances are, you're already pretty busy. That's where we come in.
Our user-friendly plugin allows you to automate all card-related activities, so you never miss a beat. Card spend updates are always visible, as are direct bank feeds, automated reminders, assignment notifications, and more. As your company seeks to become as safeguarded as possible, we'll help you stay compliant, reduce the likelihood of fraud, and streamline your expense management efforts.
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