How to handle corporate card misuse?
Corporate cards accompany countless benefits, but if business owners are not careful enough, it might leave businesses vulnerable to misuse of the corporate cards. With this, they’ll have to undergo huge business losses and even put their clients at risk.
Your employees and business members might overspend, submit erroneous expense reports, or even make unauthorized transactions. At this point, business owners can minimize these risks with report procedures and clear policy implementation.
How you can mitigate the risk of corporate card misuse
For minimizing corporate card misuse, corporations must only issue corporate credit cards to dependable employees and issuers must have the minimum requirements of 15 cardholders. However, it is safe to limit the number. The employees who carry out business transactions very often would need one and they must not share it with anyone else. Moreover, you must clearly acknowledge all the business members with the corporate credit card policy so that they have a fair idea of which transactions are authorized and how much they can spend every month. You must outline the outcomes of misusing and be aware that those who are in violation often get dismissed and prosecuted.
To minimize the misuse, you must set spending limits and restrictions on expense categories. Usually, corporate card issuers give you access to set terms for every employee so that they gain access only to those funds that they require. Going for corporate cards with joint liability encourage employee accountability. Employees need to be accountable for paying credit card transactions on their own. Business owners further reimburse them upon the submission and reviewal of expense reports. You must ensure that employees have original receipts and submit their expense reports before hitting the deadline.
By reviewing corporate card usage from time to time, businesses need to recognize suspicious activity to stay on the safer side and reduce corporate card misuse in the long run. The card issuers might also notify the corporation on time and even set alerts of substantial or unusual transactions.
There are chances that despite the preventative steps taken by business owners, corporate card misuse can still occur. So, in case you find any business member violates the terms of their corporate card, you must take suitable actions right away. For this, you need to check statements, receipts, and expense reports for regular violations and take rapid actions.