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Keeping Employees Honest When Using Corporate Credit |
By:
Robert Bain |
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Keeping Employees Honest When Using Corporate Credit
Robert Bain
Corporate credit extended to employees is often essential for the operations of your business. You need to be able to trust those that work for you to use it correctly. While there will be some honest mistakes from time to time, there can also be those that are using it for their own benefit.
While you will need to provide it for them so they can effectively perform their jobs, you do need to keep a close eye on things. Most employees are going to be very honest but those that aren't can lead you down a path you don't want to find yourself on. Make sure you have very good policies in place relating to corporate credit. All of the specifics need to be made clear to them from the very start.
There are many reasons whey employees many need to have access to corporate credit. They may need to be able to purchase things for a presentation or to get some important documents shipped out immediately. Others wine and dine potential clients in order to try to get them on board. Others incur expenses relating to travel so they can go to work site and to see other clients out there.
The big thing though is to ensure all that have access to it don't misuse it. They should only be using it for business related expenses. If their spouse travels for business with them then their cost of airfare and meals needs to come out of their personal budget. You should be asking for verification of what they are doing at the time of a given charge. This way there is a good record of all that information.
Some employers are afraid to be so tight when it comes to corporate credit. They fear it will give employees the impression that they aren't trusted. Yet if you just explain it from an accounting point of view they will understand it. They should realize that your business can be audited by the IRS at any time and you need such documentation for your own records.
This is a much better scenario than finding out a large amount of money has been frivolously charged to such accounts. If you aren't prepared for it financial it can be devasting for the overall effect it will have on your corporate credit. You also can't expect your employees to just pay such expenses out of their own pocket. Even if you will reimburse them for them later many just can't handle that type of financial burden.
A great deal of money is lost annually due to employees not being honest with the use of corporate credit. The best way to handle it is to be prepared for it. Make sure you have policies and procedures in place that will prevent it from happening. You want to be very consistent with these practices.
Of course honest mistakes will occur from time to time. Give the employee the chance to explain what took place. For example they may have given the business credit card number instead of their personal one because they are so accustomed to traveling for business. You will have to review these instances on a case by case basis.
Robert Bain - veteran business owner shares his thoughts on http://www.corporatecreditpower.com/corporatecredit.htm) building corporate credit, even if you have bad personal credit. Visit href="http://www.corporatecreditpower.com">CorporateCreditPower.com to read more.
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Article Source: http://www.statssheet.com/articles/article71880.html |
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