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Once approved, set controls on cards to ensure they’re being used properly. For example, you can assign a virtual card for each software vendor and set a recurring spend limit for the amount that the employee expects to spend. Not only does this prevent employees from misusing cards but it also prevents vendors from stealing card details or overcharging. This best practice along with the one above covers you on the integrity front. Employees are expected to comply with the corporate card policy. If the cardholder violates the terms stated, disciplinary action will be taken against the employee.
- Prosecutors subsequently charged the defendant with criminal theft.
- She is the author of “The Million-Dollar, One-Person Business,” a look at how solo entrepreneurs are scaling to seven-figure revenue without hiring employees.
- In an ideal world, all employees would keep a perfect record of all their purchases and maintain a scrapbook of 30 days’ worth of receipts before the credit card statements arrive.
- Many organizations don’t require purchase orders for credit card purchases.
- Our team is made up of diverse individuals with a wide range of expertise and complementary backgrounds.
- CreditCards.com credit ranges are derived from FICO® Score 8, which is one of many different types of credit scores.
This means only using a company credit card for expenses that are permitted in the company’s expenses policy. What it really boils down to is whether or not the employee informs the employer of accidental company card misuse as soon as possible. Globalization and remote work have increased the risks of card fraud and identity theft. A proper corporate credit card policy will minimize these risks and ensure that your corporate funds are safe.
Get corporate credit cards with enhanced security features
If it was simply a matter of unintentional misuse, then reiterate guidelines regarding card use and give the employee another chance. If the charges were purposeful, use your company guidelines to make the best decision and take into account the employee’s history and the nature of the charges. If the charges run into the thousands, that is considered grand theft in most states, and you may have no choice but to contact your local police department and have them to pursue charges against the employee. Remind employees to protect their commercial card as they would their personal card — and if their commercial card goes missing, it should be reported immediately.
- They also are used for personal lunches that get reported under business.
- Since the dishonest employee is generally trusted, personal expenses and cash can accumulate into hundreds of thousands of dollars of embezzled funds.
- It’s entirely possible that your employee has a similar-looking card and accidentally makes a purchase with the wrong one, using the company credit card rather than their own.
Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including card rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the bank’s website for the most current information. Understanding merchant category codes is important for businesses and cardholders alike.
Different Forms Of Fraud
This What To Do If An Employee Misuses A Corporate Cards employees from using their own money and lets the company pay directly, thereby making things easier for both of them. Many companies issue credit cards to employees for various purchases, including office supplies, business-related meals and travel expenses. Once you find out that an employee has used company credit inappropriately, act quickly so other employees don’t follow suit or the misuse continues.
You’ll also want to inform your accountant about the mis-spend straight away. Having non-business expenses on a business card or account will have implications for the tax you pay. You’re fully within your right to request repayment from the employee for the personal transactions they’ve made on their company card. Company credit cards allow businesses to streamline all sorts of internal processes by giving employees direct access to company funds. But this involves a great deal of trust between a business and its employees.
Stop employee corporate credit card fraud in its tracks
Otherwise, I don’t see how you would be deducting money from this individual’s paycheck. Their limit was $2,500 a month, and we know there is stuff on there that was business-related and stuff that was not. We have never had anyone sign anything saying what they can or cannot use the cards for.
While not all credit card providers allow you to set alerts, completely customizable Volopay corporate credit cards allow you to set alerts in case of suspicious or fraudulent transactions. Moreover, you can set alerts when cards are being used outside of their intended expense category and when they go over the limit. While it’s not illegal to pay for personal expenses using a company card, it goes against company expense policy and will likely result in disciplinary action if it happens regularly.
How Is a Corporate Credit Card Different From a Business Credit Card?
While these examples may sound outrageous, credit card fraud is one of the most common abuses committed by employees. American corporations lose approximately $50B and 1.8% in revenue annually because of employee theft. For many companies, employee credit card misuse usually begins with small charges, goes unnoticed for years, and adds up over time. When employers discover the fraud, it is often too late – the money has evaporated and is unrecoverable. To prevent misuse of company credit cards you must make it mandatory for employees to submit proof of purchase whenever they make a purchase using company cards. Without proof of purchase, it will be virtually impossible to determine whether the purchase details submitted are actual or fabricated.
Crisis Ahead was rated one of best new crisis management books to read in 2020 and 2021 and — one of the best crisis management books of all time — by BookAuthority.org. My advice and observations are based on my extensive experience helping companies, organizations, and individuals prevent, manage and recover from a variety of crisis situations. Key are having the right anti-fraud policies and procedures in place, enforcing them, and setting a good example. Although expense report abuse has been around for decades, the coronavirus crisis has made it even worse.
For instance, an employee could get into a personal pinch and use the card for emergency situations at home and you’ll only find out about it after the fact. It’s entirely possible that your employee has a similar-looking card and accidentally makes a purchase with the wrong one, using the company credit card rather than their own. In the latter example, it’s entirely understandable, but if he or she does not take a proactive attempt to reimburse you or simply says nothing and hopes it will slide by, you have a problem on your hands. Retain receipts of any purchase you make using a company credit card.
