Tips to Reduce Employee Expenditures on Credit

An employee credit card allows you to monitor and control spending while allowing your employee to purchase goods and services on behalf of the company. Many companies offer free employee credit cards, allowing you to earn rewards on their purchases without paying a fee per card.

Employee credit cards save you time and hassle when reimbursing employees who pay for business expenses with their own money. Plus, you’ll be able to meet the spending requirements for the introductory rewards faster.

How Employee Credit Cards Work

Employee business credit cards are authorized user credit cards that you can give to employees to make purchases on the company’s behalf. Employee credit cards are linked to the account’s primary card and assigned to specific employees. Employee credit cards can be obtained through a small business credit card, corporate credit card, or prepaid business card. Your issuer can provide you with additional employee cards upon request.

Employee business credit cards function the same way as the primary card on your company’s account. The card can be used to make purchases online or in a store by an employee. Employee credit cards have the exact APR as the primary card, earn the same rewards, and offer the same benefits. Most credit cards allow you to set spending limits to protect yourself from employee fraud.

Depending on the type of employee card you choose, the monthly bill will be paid by you or the employee. If you pay the bill, your statement will show all your employees’ charges. You can track your spending through your issuer’s online banking portal throughout the month.

Employee credit cards can help you save time by removing the need to reimburse employees for their expenses. They can also help you save money, mainly if you set clear expectations about credit limits and the types of purchases employees are allowed to make.

Set spending limits. 

Setting strict spending limits and “merchant category codes” to limit where employees can spend money on the card is often the best way to prevent employee credit card abuse. For example, American Express provides MCC blocking for hundreds of standard and custom codes. Business owners can use this feature to allow employees to spend only with merchants in specific categories. You can also link cardholders to a list of MCC codes, allowing them to spend at any location except those listed in the codes. Using Preferred Supplier Lists, you can limit your spending to specific merchants or locations.

Establish guidelines and a company policy in writing. 

To put it another way, don’t assume your employees are aware of their credit card spending limits. Request that employees read and sign a written agreement stating that they will follow the company’s credit card policies. Make it clear to employees what they are and are not allowed to charge on the card.

Review statements closely and requires receipts.  

Regardless of whether you have faith in your employees or have signed any company policies, keeping track of their spending is critical. Review credit card expenses monthly. It’s simple to do online, and you can see all of the details of each transaction. Employees should also be asked to provide receipts and reconcile their spending every month. Bring any questions or concerns to the employee’s attention right away.

Capture Points and rebates 

Using company credit cards to consolidate business purchases, earn points, and get additional discounts is also good. Make sure these features are turned on and that you use them.

Conclusion

An employee credit card could help you keep tabs on your employees’ spending on your behalf. Use a credit card issued to employees to make purchases.

Total
0
Shares
Leave a Reply

Your email address will not be published.

Previous Post

Ways to Automate Client Intake for Lawyers

Next Post

Subtle Tips to Approaching Employees with Hygiene Problems

Related Posts