A company credit card can be used by all members of a company or issued to specific employees for business expenses. Careful record-keeping is necessary to avoid misuse, and employees should clarify with employers before using rewards or gift certificates. Reimbursement is an alternative to using a company credit card.
A company credit card can be defined in many ways. It can be a card available for use by all members of the company, especially small businesses. These cards can be used as the primary means of purchasing items in day-to-day life. Alternatively, a company may issue a credit card to some employees, especially those who need to travel for business and need to pay company-covered expenses along the way.
The company is responsible for paying bills on both types of company credit cards, provided they are used strictly for approved business expenses. This can create some problems and people need to pay attention to keep careful receipts and records when using the cards. An employee may be responsible for charges that are not really business expenses, and purchasing items on the card that are not really business related can, in some cases, cause termination of employment.
It is true that some employees abuse a company’s credit card, but with advances in detailed statements, this is likely to be discovered quickly. Sometimes accidental abuse occurs. When people are used to paying for items with cards, it’s all too easy to pay for items with the wrong card. If an employee notices an accidental purchase with the company’s credit card, he or she must inform employers immediately and be prepared to compensate the company immediately.
A more complicated issue arises when employees purchase items that are legitimate business expenses while also purchasing items for personal use. Again, keeping detailed receipts is key to making sure the company isn’t buying things unrelated to their business. One way to avoid this is to request separate transactions when making a purchase that includes both business and personal expenses, and then use your company credit card and a personal card to pay for those transactions.
People who have a company credit card issued in their name sometimes wonder if they can take advantage of the perks offered with the card, such as frequent flyer miles. The decision to allow an employee to use rewards or gift certificates should be the responsibility of the employer. When this is not clear, employees should check with their employer before using any benefits. The company may want to hoard them to give employees gifts or save money on air travel.
One way to avoid using your company credit card is to create a method of reimbursement for business expenses incurred by employees. This also involves employees handing out receipts, but it gives businesses less ability to investigate charges. Many feel that a company credit card offers greater convenience than the cash-in/refund method. Another advantage of credit cards over the cash/cash method is that employees with little cash or available personal credit will not be put in an awkward situation where they cannot cover legitimate business expenses.
Asset Smart.
Protect your devices with Threat Protection by NordVPN
