When it comes to company credit cards, abuses are legendary. (And we're all ears!)
For businesses in which employees are required to travel, expenses are notoriously hard to keep straight. Companies can reimburse employees for expenses after the fact, or they can let the workers use either the company credit card, which is the same as the ho-hum plastic we all use, 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, don't assume that the rules of consumer credit are the same for that business card you cart around:
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 corner deli, write on the receipt exactly what you purchased. Better yet, keep your work-related expenses in a separate envelope.
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.
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 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 how to boost your credit score quickly 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 termination, 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.
As for bosses ...
Vow to check: Scouring receipts and comparing them with credit card bills is a drag -- not only to the person whose job it is but also on a business' bottom line. Weigh the costs of accounting labor against the price of dishonesty. If you haven't had problems in the past, then you may be able to get by with having just one person sign off on expenses. However, recognize that some items may simply be overlooked.
Set deadlines: Require all employees who use the company card to turn in their receipts by a specific date. Too often, latecomers are given less scrutiny than those who turn in their expense reports early.
Put the rules on paper: Include company guidelines in the employee handbook. And make sure the rules are detailed -- for example, specify if meals and beverages are allowable but alcohol is not).
Give abusers a heads-up: The company credit card rules should also include what happens to abusers. Depending on the seriousness of the slip-up, this can be anything from a wrist-slap to termination.
Apply electronic safeguards: Many corporate cards have single-purchase limits. For example, they may allow no more than $1,000 in purchases made online. 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 a prescription on company plastic, the card will automatically be declined.