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Why Set The Corporate Credit Card Policy?
Businesses to be stabilized needs to procure a corporate credit card which will define the bounds of business operating expenditures from that of personal expenses in the company.
This is a good means of keeping an accurate record for reimbursement requests during business travels and purchase of office goods while maintaining personal finances of both the employer and the employees.
There are also numerous benefits that the corporate credit cardholder can enjoy under the terms and contract. Some of these are: instant coverage on travel accidents, medical protection for travelers, roadside assistance and insurance on excess baggage, to name the few common privileges.
These privileges, as part of the corporate credit card can also be granted to employees as individual cards, given that they are to be used for business related expenses. When the employer dispenses the card to the employee, both take the responsibility over the card. However, the employer cannot always be assured that the corporate credit card will be used entirely for business dealings and not for personal luxury.
This is why a policy on corporate credit cards must be established so as to ascertain a legitimate procedure as well as the protocol on the use of the corporate credit cards.
The key rule in corporate credit card is that the primary cardholder is fully responsible for the account charges, despite of any contract between him and the employee. On the other hand, if the terms of the corporate credit card will render an equal responsibility to both parties, the employer shall inform the employees of his duty to this matter. The policy will state an agreement regarding the liabilities of the primary cardholder, who is the employer, and the authorized cardholders or the employees.
Some of the inclusions of the policy are:
1) To explain how the system of the corporate credit card will work. This includes the benefits, conditions, the eligible to posses the card and the documents required in order to charge the expenses to the corporate credit card.
2) To explain to the eligible employee his responsibilities regarding the use of the card which he had to sign such as providing an accurate record of transactions that will stand as evidences.
3) To indicate the maximum credit depending upon the employee's designation in the company.
4) To monitor the procedure of auditing the purchases monthly.
5) To set up a policy on lost or misuse of the corporate credit card.
The authorized cardholders will then receive a pack which contains the necessary information on the corporate credit card policies and procedures. And because this is a bind that he has to sign, his compliance should strictly be monitored.
The policy on corporate credit card must be developed and communicated to the corporate cardholders for strict adherence and thereto avoid any misapprehension to occur. More importantly, the policies must be fair and reasonable for both parties.
The effectiveness of the corporate credit card policy depends on how both the employer and employees comply with it. If the policies are adhered to religiously, the corporate credit card is an efficient tool in developing the company. This will also serve as a guide in establishing a good relationship between the employer and the employees when dealing with financial matters.
And it must be noted that the accountability in handling the corporate credit card is a mutual one.
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