When it comes to company credit cards, abuses are legendary.
There's the Nuclear Regulatory Commission employee who put his $4,000 corrective-vision surgery on the boss' tab. And the Washington Teachers' Union won't soon forget the $1.8 million in charges for English bone china, artwork, Fendi and Chanel handbags, and Tiffany (NYSE: TIF ) pearls that its former chief charged to the union's tab.
For businesses where employees are required to travel, expenses are notoriously hard to keep straight. Companies can either reimburse employees for expenses after the fact or let them use the company credit card (same as the ho-hum plastic that all of us use, complete with credit limits and interest rates) or a corporate charge card (which comes with an annual or monthly fee, does not accrue interest, and is paid in full monthly).
If you're an employee entrusted with the company card, consider the following:
Get organized. It doesn't take much to generate a mountain of receipts. Keep close tabs on your spending, especially if you're using your own credit card or cash. (You want to get paid back, right?) If you get a generic receipt from a street vendor or a corner deli, write on the receipt exactly what you purchased. Better yet, keep your work-related expenses in a separate envelope.
Play by the rules. Ask your employer for written guidelines on how to handle the company plastic. These should include a list of allowable and unallowable expenses (e.g., meals and beverages may be allowable, but alcohol may not), reimbursement deadlines, and per diem limits.
Be aware of electronic safeguards. Many corporate cards have single-purchase limits -- for example, they may limit online purchases to less than $1,000. Cards also have filters -- merchant codes that prevent charges at certain retail establishments such as salons, drugstores, or clothing stores. When an employee tries to put a pedicure or Prozac on company plastic, the card will automatically be declined.
Watch your wallet. Not all company credit card abuses are the fault of an unscrupulous employee. Unintentional abuse is easy. After all, it's just another piece of plastic in the wallet, and when you're fumbling for your card at the grocery store, mistakes can occur. One Christian Science Monitor reporter's credit card number was hijacked after he charged a waffle breakfast in Amman, Jordan. The $3,100 transaction for three Russian-made night-vision rifle scopes probably made the newspaper's finance department pause.
Get perks. Many company credit cards come with perks that should sound familiar: miles, rebates, teaser rates, free balance transfers. Consult your employee handbook or your boss to see whether you are allowed to keep the spoils of your spending. If not, and if you are a diligent, on-time, paid-in-full kind of person, consider putting work purchases on your card to earn extra points or cash back.
Be prepared to let it all hang out. If you've had trouble with the plastic police in the past, the boss will find out. If your company chooses a credit card (as opposed to a charge card), each person given access will be subject to a credit check. Here are some tips on performing credit report triage before the boss man raises his eyebrows.
Do the crime? Better pay on time. Employees who put unauthorized charges on the company card may find themselves facing job loss, and worse. If you can't pay the tab, your company can treat the purchases as extra wages, and you will be taxed on them.
Dayana Yochim does not have a company credit card. If she did, she'd make sure that those sushi lunches were all business. She owns none of the companies (or pricey purses) mentioned in this article, either.