Keeping Employees Honest When Using Corporate Credit
Author: RobertBain Total views: 56 Word Count: 584
Don't let the misuse of corporate credit affect your business. While you may need to allow employees to have access to it, you definitely don't want to give them free rein. It is well worth it to hire a few staff people to review the reports that people turn in for business related expenses. This way you can spot any red flags before they have gotten out of control.
While you will need to provide it for them so they can effectively perform their jobs, you do need to keep a close eye on things. Most employees are going to be very honest but those that aren't can lead you down a path you don't want to find yourself on. Make sure you have very good policies in place relating to corporate credit. All of the specifics need to be made clear to them from the very start.
The amount of access that some of your employees have to corporate credit will vary. Some will only be able to use a credit card for dinners with clients and to buy goodies for an in house meeting. Others will be traveling so they will need to rent cars, pay for flights, cover their meals, and pay for hotel rooms. All of these types of expenses can easily be verified.
The problem comes in when employees start to use this type of corporate credit for their own benefit though. They may be treating their family and friends to meals instead of your clients. This is going to cost you a great deal of money if you don't prevent it from taking place. You may want to have a policy in place where they request such expenditures in advance. You should have written documentation of who they will by meeting with and why.
Some employers are afraid to be so tight when it comes to corporate credit. They fear it will give employees the impression that they aren't trusted. Yet if you just explain it from an accounting point of view they will understand it. They should realize that your business can be audited by the IRS at any time and you need such documentation for your own records.
This is a much better scenario than finding out a large amount of money has been frivolously charged to such accounts. If you aren't prepared for it financial it can be devasting for the overall effect it will have on your corporate credit. You also can't expect your employees to just pay such expenses out of their own pocket. Even if you will reimburse them for them later many just can't handle that type of financial burden.
If you are hesitant to implement strict guidelines relating to the use of corporate credit, take some time to read stories online. You may be amazed at some of the things that people have done for their own gain with such access. It only takes a few people out there with such intent to create a huge problem for any type of business.
Even with such strict policies in place you need to work with your employees. For example if they end up in a desperate situation while on business such as being snowed in, they may need to access more fund than you approved. You have to be flexible to a point when it comes to corporate credit. The key is to make sure all of the claimed expenses are legitimately related to work done on behalf of your business.
Article Source: Credit Card Bad Credit People
About the Author
Robert Bain writes all about small business. Discover the difference between business credit and true corporate credit that the banks are hoping you don't discover.
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