Your company has recently issued you a credit card for job-related expenses, enhancing both your daily routines and business travels. However, it’s crucial to adhere to your employer’s intended usage for the card.
Begin by comprehending the functionality of corporate cards and familiarizing yourself with your employer’s card policy. For employees of small businesses, you might be designated as an authorized user on your employer’s business card, which operates differently. In such instances, the card provided may resemble a personal credit card rather than a corporate one.
Regardless, you’ve been entrusted with a credit card associated with your employer’s business, necessitating its proper usage. Here are some overarching guidelines to observe and pitfalls to avoid when utilizing your company’s credit card:
5 ways to use your company credit card responsibly
Upon receiving your company card for the first time, your supervisor may guide you through the limitations or provide you with a document outlining the company’s regulations. You may also be required to sign an acknowledgment of these rules. Regardless, it’s essential to familiarize yourself with your company’s credit card usage policy, understanding what expenses are permissible and which are not. Any unauthorized charges may result in you being held accountable.
2. Understand your spending limits
Be vigilant about adhering to the spending limits designated by your company for various expenses like booking hotel rooms, client entertainment, and travel meals. Certain companies establish limits for specific purchase categories through their credit card provider, and exceeding these limits may result in you being accountable for the excess expenses. Conversely, some companies may not impose such restrictions.
3. Save your receipts
Ensure meticulous record-keeping, including for minor transactions such as buying a cup of coffee or taking a short Uber ride from your hotel. Your company likely mandates the submission of receipts for all purchases. If there’s a risk of misplacing receipts, consider photographing them with your phone or utilizing a free tool like CamScanner for safekeeping.
4. Have a backup card
When embarking on business trips, always have your personal card at hand—ideally, one that offers rewards—for unexpected expenses not covered by your company. It’s wise to avoid relying solely on your company credit card in situations like needing to purchase medication from a pharmacy or replacing lost luggage with clothing.
Moreover, there may be instances where you need to use your personal card for a business expense and seek reimbursement later. Ensure adherence to your company’s reimbursement procedures if this arises.
Maintaining a rewards credit card as your backup ensures you capitalize on rewards for these purchases while away on business, particularly if you anticipate reimbursement for business-related expenses.
5. Be prompt with expense reports
Ensure timely submission of your expense reports. By providing the necessary information to the accounts payable team promptly, you facilitate your employer’s ability to manage card payments efficiently. Additionally, adhering to this practice can help you maintain compliance with your company’s usage policy and prevent the accumulation of discrepancies.
7 pitfalls to avoid when using your employer’s credit card
While having a company credit card can streamline your job, its benefits can be nullified if consistently misused. Here are some common pitfalls to steer clear of when utilizing your card:
1. Starting to spend immediately
Avoid using the card until you fully understand your company’s guidelines for its usage. Typically, these rules will be explained by a supervisor or provided in written form. If documentation isn’t provided, it’s prudent to request a copy of the rules for reference, especially if the card hasn’t been used recently.
Furthermore, aside from understanding the company’s usage policy, you might encounter accounting restrictions that necessitate waiting. For instance, your employer may require you to delay usage until the start of the next month or limit its use to business trips only. Paying attention to these specifics can prevent any missteps at the onset of your company credit card usage.
2. Making large unauthorized purchases
Refrain from making significant purchases without obtaining written approval from a supervisor, even if your company lacks an official policy regarding this matter. It’s prudent to prevent surprising your employer with unanticipated bills, particularly if the purchase risks nearing the credit limit.
3. Exceeding the spending limit
Regarding your spending limit, if you find yourself approaching it and anticipate needing to surpass it during a business trip, it’s advisable to inquire promptly. Your company might be able to increase your spending limit without consequences or request you to cover certain charges on your personal card, which you can then submit for reimbursement.
4. Using a company card for personal purchases
Under no circumstances should you utilize your company card for personal expenses, except in genuine emergencies. To prevent such situations, ensure you always have an alternative payment card accessible for personal expenses. In the event of an emergency requiring the use of your company card, proactively inform your supervisor to avoid any misunderstandings.
5. Keeping mistakes secret
Maintain open communication with your employer regarding any mistakes. Utilizing a business credit card for personal purchases likely breaches the card agreement’s terms and conditions, potentially leading to severe repercussions. If you inadvertently use your business card due to confusion with another card in your wallet, promptly reimburse the charge and inform your supervisor.
6. Using rewards points you earn
Never presume that the rewards points earned from your business card are yours to keep. Your company might have a policy stating that the points belong to the company. If you’re uncertain, inquire about the policy to clarify.
7. Being lax about security
Regardless of whether it’s a corporate card, it falls upon you to report any fraudulent charges to the card company and inform your employer. Should you detect any unfamiliar charges or experience the loss or theft of your card, promptly notify your company. This ensures they can take necessary steps to mitigate future risks. Treat any business card with the same level of security as you would your personal card.
In Conclusion
Corporate cards offer perks and tools that can be beneficial to any employee, relieving you from the need to use your personal credit cards for business expenses and risking maxing out your credit. Nonetheless, it also entails significant responsibility, necessitating you to use your card precisely as your company intends.