Credit cards can be a fine way to pay your bills and smooth litle transacations like cab fares, but they also bring risks that can be tamed with the tips in this story.
No matter if you are a business owner or an employee with access to a company credit card, you must be fully aware of the importance of financial responsibility. It is very easy to abuse a corporate credit card and in turn put your company in a bad financial position.
Regardless of your standing in the company, if you have a corporate credit card you should follow these five tips:
1. Learn the rules on personal use: Some companies allow employees to use a corporate credit card for personal use while others have rules that are strictly against this. Before you ever swipe your card, make sure you know the rules for personal use and how they apply to you. If It is better to be safe than sorry.
2. Learn about the rewards program (if there is one): Is your company earning frequent flier miles, for example, with every dollar spent? You may be surprised to find that company credit cards are not always eligible for benefits such as frequent flier points and cash back rewards. That being said, these can often times be passed down to the employee. Is this something that your company is willing to do for you? As a valued employee, they may have no problem handing over these rewards – but you have to ask first!
3. Know your credit limit: Like personal credit cards, most corporate cards have a maximum spending limit. Do you know this limit? Do you know what your balance is at all times? If you continually exceed this limit your company may get the feeling that you are being careless – even if this is not your intention. Make sure you know your corporate credit card’s limit and then stay below it, no matter what it takes. If you need to spend more, get approval from your boss or accounting department.
4. Always be on the lookout for fraud: Just as you would with your personal credit card, never use your corporate card if you think that fraud could be an issue. This includes websites that have not implemented a secure checkout and stores that do not offer a sales receipt. If you neglect to review your monthly statement for fraudulent charges, your card may be used in a fraudulent manner, time after time, without you or your company ever knowing about it. That is unless someone in accounts notices and raises the alarm, but by then it may be too late and you could be to blame.
5. Attempt to avoid cash advances: From time to time, a situation may arise in which you need to use a cash advance. However, this should be a last resort. When you opt for a cash advance, it is difficult for your company to track exactly what you are doing with the money. Understandably, this is frowned upon in most organisations. If you are going to use a cash advance, make sure you forward this information to your accounting department along with a receipt for the items purchased with the money.
It goes without saying that most employees never gain access to a corporate credit card. But if you are one of the fortunate ones, make sure you follow the five tips above to help keep you safe.
Contributed by Chris at www.moneychoices.com.au, which offers comparison data on credit cards for business.
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