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Keeping Employees Honest When Using Corporate Credit

By: 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.

Some companies just don't have good policies in place so employees really misuse the corporate credit by default. Those things that fall into a gray area often get turned in when they aren't eligible. For example they may turn in charges for drinks they had at the bar before a business dinner. This isn't a necessity so you may only want to cover the cost of the dinner and the drinks are their responsibility.

Not everyone should need to have access to corporate credit, and you want to limit it where you can. It is going to be easier to track expenses if you only have a small group of people making them. It will really depend on the type of business that you offer to people though. Sometimes you just can't help but allowing a large number of people to access it.

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.

The type of blatant misuse of corporate credit that you need to protect against won't happen on a regular basis. This is due to some employees charging their personal bills and needs to the business. However, even if they only do it for something small it can really add up over a period of time. Pay close attention to these small expenses as they will affect the amount of profits you end up with.

An effective business can only operate corporate credit with some strict policies in place. You are risking too much if you don't take it seriously. Don't wait until your corporate credit rating has been severely damaged by it. Even if you are able to prosecute the employees that engage in the behavior, you can't change what has taken place.

It seems like access to corporate credit is something that employees need more and more. This is due to the large scale of businesses taking on customers from all over the world and not just locally anymore. For some employees, they travel out of town for business several times each month. They need a way to be able to pay for the related expenses they will incur.

Even with such strict policies in place you need to work with your employees. For example if they end up in a desperate situation while on business such as being snowed in, they may need to access more fund than you approved. You have to be flexible to a point when it comes to corporate credit. The key is to make sure all of the claimed expenses are legitimately related to work done on behalf of your business.

Article Source: http://www.articlemanual.com

Robert Bain writes all about small business. Discover the difference between small business credit and true corporate credit that the banks are hoping you don't discover.



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