Developing and Implementing a Company Credit Card Policy

There comes a time in every company’s development when you as the owner can no longer be responsible for all of the business purchases. Whether you do not have as much time as you once did, your duties have shifted or you are delegating more tasks than before, it might be time to consider establishing a company credit card policy.

Creating a policy is a step that will save you time down the road, as well as help prevent any potential issues regarding misuse of company funds. If you don’t have a policy in place, review the tips below to see what goes into a company credit card policy and considerations you should think about as you develop and implement your policy.

Determine who should have a card

Having a company credit card account does not mean that all of your employees need access to it. Designate certain roles within the company by their job function or perhaps seniority to be responsible for spending.

Designate spending limits

It can be tough to establish a limit for credit card expenses. Begin by reviewing your business needs and the common expenses your company has made to this point. Will these change in the near future, or do you expect them to remain the same? Both considerations can help you decide what an appropriate value would be for spending limits.

Additionally, limits should not be the same across the board. For example, limits set on client dinners should not be the same as those established for employee travel. Again, you will have to look at what your business needs are and then establish limits that make sense.

Create an approval process

There should be a system of approval for expenses. This does not mean that employees should have to make a request prior to every expense. Rather, have a system in place to check monthly statements and verify expenditures. Make sure your employees know that these statements will be checked to maintain transparency and trust.

Adjust as needed

If you are implementing a credit card policy for the first time, keep a close eye on the first few months of company statements after implementation to see how the policy is working.

Adjust spending limits or authorize additional users when you feel it is necessary. Also, ask your team how they feel about the policy. The policy should make it easier for the company to make purchases, not more difficult, so ensure your policy is having the intended effect.

Provide clarity

You might feel that common sense guidelines, such as “Don’t use the credit card for personal purchases,” do not need to be stated; however, the more guidance you include, the less guesswork there will be. Make the policy clear so that there is no question as to what it is stating, including any disciplinary actions that follow misuse.

Understand emergencies happen

Remember that company credit cards are not only for the immediate expenses of the business; they can also be used for emergencies. For example, if an employee is traveling in a company vehicle and it breaks down, that emergency situation can be handled through a company credit card. A policy paired with thoughtful usage guidelines protects your business and employees alike.

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