If you do not take the necessary measures, you may be faced with shocking abuse of employee credit cards. Every now and then, we hear of government employees who have abused this privilege, using taxpayers’ money to go on a holiday, buy cars and computers, gamble, and many more. These facts are enough to compel any employer to revoke some privileges. If the government itself cannot control its staff’s spending, then how could you, as a private business owner manage that? Here are several tips to follow, making sure you reduce the fraud risk to a minimum.
There are ways to maintain your integrity and financial safety, after all, and they do not necessarily involve taking everybody’s credit card away. First of all, it is of paramount importance to enforce the company’s credit card policies in a strict and consistent manner. It is true that hardly anyone is going to charge a thousand-dollar piece of equipment to the card. They will charge small items, but these eventually pile up. This is why, business credit cards provide ample opportunities to commit fraud. Make sure your employees are fully aware that they could be fired for personal use of the card. It is a good idea to warn them and keep your word. When someone does get fired, the rest will take notice.
Second, do not assume you can trust people just because they worked for your company for a long time. Experts believe that it is very difficult to judge who of the staff members is trustworthy and who isn’t. Oftentimes, a long-term employee will surprise you. A traditional aspect of business card abuse is a lack of supervision on purchases. There is one of two reasons for this fact – either the manager neglects his or her duty to conduct an in-depth inspection of the purchases or the employee is wrongfully seen as trustworthy. In this way, fraud can continue for years on end. If you want to double-check, you could get an outside auditing firm to review all purchases charged to the company’s cards. This is a good idea because corruption can occur at levels of upper management as well. These people sometimes feel untouchable and above reproach. You should take measures to show them that they certainly are not.
Take care that your supervisors are not overworked. You might consider employing additional stuff in that case. If they are too busy, many approvals will slip through. Make sure you have a sufficient number of conscientious staff members on this level.
Also, make sure the penalties for violating the company’s policy on credit card use are crystal clear. All employees who have access to a company card must sign an agreement that they will comply with the restrictions. Then, you will have evidence of their incompliance with the policy in case they are caught abusing their privileges. You can proceed by taking punitive measures. It may take years but eventually, all transgressions come to light. As someone in a position of authority, you need to be prepared for this moment. Never assume that your staff will just understand unwritten rules for business credit cards and follow them. You are putting your entire organization at risk if you do.
Finally, forge a partnership with your credit card company. Find out what protective measures can be worked into the business credit card network. Some companies have gone as far as to block the card so it cannot be used in certain locations, such as ATMs near casinos.
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