How To: Manage Business Credit Cards for Employees | CreditShout

How To: Manage Business Credit Cards for Employees

By Dawn Allcot / October 19, 2010


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Your business is expanding. Now you not only have a business credit card for yourself, but you’ve given credit cards to a handful of trustworthy employees, as well. How do you manage those cards?

Managing business credit cards for employees is about more than logging expenditures in QuickBooks. In fact, tracking expenditures is the easy part. Many business credit cards, including American Express, Citi and Chase, offer customized spending logs through your online account management. You can see what the company is spending at a glance, and also view expenditures on individual employee cards. You can make sure these numbers mesh with your own choice of accounting software monthly or quarterly.

The real challenges to managing business credit cards come in three areas:

  • Selecting the best business credit cards for employees
  • Setting clear, detailed limits on spending amounts and types of spending
  • Avoiding identity theft or credit card fraud with careful monitoring and employee education

This article will cover all three areas, but be sure to browse our best business credit cards and best business charge cards to help you select credit cards for your employees.

Selecting Business Credit Cards

When you select a business credit or charge card, you’ll want to decide if you want a card with no pre-set spending limit and no finance charges, where the balance is due every month (like Ink Bold from Chase or an American Express charge card), or a conventional credit card.

If you choose a credit card, pay close attention to the finance charges, annual fees, and the like.
You’ll want to analyze your spending to get a rewards card that fits the way you do business. Maybe airline miles is the way for your company to go. Or maybe you buy mostly office supplies and would prefer cash back. The choice is yours.

When you select a business credit card with employees in mind, see how many free employee cards you get, otherwise the costs for additional cards can really add up. Also, find out if employee expenditures count toward your rewards balance.

Setting Clear Limits on Employee Card Use

There’s one rule that should go without saying, but say it anyway. In fact, put it in writing for your employees: Do not use your company credit card for personal purchases.

Beyond that, the choice is yours. Many credit card companies permit you to set individual spending limits on employee cards, so you can decide how much you want to let each employee spend. You’ll need to set the rules on how they are permitted to spend that money.

If employees use their credit cards for travel, what expenses can they put on the card? Are they permitted to treat colleagues to dinner? Can they charge drinks after dinner? Is there a limit to how much they can spend in different categories, such as transportation, food and alcohol? What about charging personal items (such as grooming products they may have forgotten) while on the road? Or a daily Starbucks latte?

If you put together guidelines for your employees, which may include a daily limit of $50 while on the road for “personal items” and another daily limit for food and drink, there won’t be any disputes. Remember to set a monthly (or per trip) budget for each employee, too.

In the office, decide which purchases must be approved by you or the accounting department, and what expenses employees have the freedom to charge.

Avoiding Identity Theft

Again, only issue credit cards to employees you can trust. If someone is laid off or fired, be sure to cancel their credit card immediately. (Perhaps even before you break the news to them.) Instruct employees to treat their corporate credit card as their own; don’t leave a corporate credit card lying in the open where someone can steal the number, and be cautious when giving out the credit card number over the phone – especially in offices with cubicles where sound carries.

Keep close tabs on your account and report any unusual activity immediately. Remember, if an item on your business credit card account is in dispute, continue to make the minimum payments to preserve your credit rating.

Just like personal credit cards, business credit needs to be managed responsibly. Letting employees know what is expected of them can make this easy.

The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone. Additionally, the opinions of the commenters are not necessarily the opinions of this site

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