Tips to Prevent Employee Credit Card Waste and Abuse
LOS ANGELES, March 30, 2011 — Increase productivity by giving employees a business credit card. With the first quarter of 2011 almost behind us, the SBA pointed to signs of "impending growth in small business lending." A credit card allows employees to quickly pay for business-related expense and focus on growth-related activities, like sales.
The U.S. Census Bureau announced a 10.8% increase in sales for manufacturers, retailers and merchant wholesalers in January 2011, compared to January 2010.
The Bureau of Labor Statistics announced nonfarm payroll employment increased by 192,000 in February 2011.
"With increases in sales and hiring, the future of business is bright. Smart businesses are turning to business credit cards to accelerate growth," said Charles Tran, Research Director of the credit card comparison website CreditDonkey.com.
When Is It Time to Give an Employee a Credit Card?
"If owners entrust their employees with key decisions, then it is time to get them their own business credit card," he said.
For example, your biggest account's sales pitch is tomorrow. You send your key employee to pick up the finished presentation material. The printer is closing in an hour, and your presentation is first thing in the morning. She shows up at the printer with a signed check for the amount on the original quote, only to find that the final total exceeded the original quote.
"You trust your employee with your important presentation; why else would you send her on this task? Now she does not have enough to cover the bill. Next time, empower your employees with their own business credit card," Tran explained. Of course, there are a number of factors to consider when entrusting your employee with your small business credit card, as credit card abuse is often a reality.
Keeping Your Small Business Credit Card Use Legitimate
What entrepreneurs should consider before handing over business credit cards to employees:
- Enact spending limits – Set up spending limits and procedures. Often, the best way to prevent credit card abuse among employees is to set tight spending limits and "merchant category codes" to limit areas in which their employees can spend money. For example, an employer may set up merchant category codes to prevent their employees from taking cash advances or using their credit cards at casinos or nightclubs.
- Set guidelines and formulate a written company policy beforehand – In other words, do not assume employees know their limits when it comes to credit card spending. Ask employees to read and sign a written agreement that states compliance with the company's credit card policy.
- Don't let spending go unchecked – Regardless of trust in employees or any signed company policies regarding credit card use, it is important to perform due diligence and remain aware of employees' spending. Consistent reviews of credit card expenses should be conducted. Ask employees to provide receipts and to reconcile their spending every month, but don't just stop there. Carefully review all monthly spending reports with employees and immediately bring any questions or concerns to their attention.
Giving employees a small business credit card can increase a company's productivity, as long as owners ensure that checks and balances are in place to avoid waste and abuse.
Small business owners can visit http://www.creditdonkey.com/business for free comparisons of business credit cards that can help your company expand. You can search, compare and apply on the website, finding the best business credit card for your needs.
Contact:
Charles Tran
866-586-2488
Email
http://www.creditdonkey.com/
# # #