Applying for a Corporate Credit Card?
Although not yet widely common to a Filipino, a Corporate credit card are used by companies, big or small by its executives, offers a business to systematize its expense or disbursement processes. Corporate credit card promotes efficiency and good control but it has to be used if the benefits exceeds the cost, after all it is a business.
iMoney Philippines list some things a business owner should put in perspective when getting a corporate credit card before giving them out to its key employees.
Key Person in Charge or Team
You will need a person in charge definitely in setting up the whole process, taking care of the bank issues and actually getting a corporate credit card in your company. Here are some responsibilities that this person may do, but it is not limited to the following:
- Liaison with the banks in acquiring the corporate card.
- Authorizing of employees to include in the list of users of the corporate credit card.
- Setting up house rules for the use of the card.
- Monitoring and scrutinizing all transactions made, from purchase to payment.
Without the required manpower and standard operating procedures to manage your corporate credit card account; scenarios such as over-spending on the corporate cards or even card abuse are very real.
Setting out House Rules
Just like any process a corporation sets out house rules to its employees when using a company asset. It is no different when using a corporate credit card. Here is a general structure of how it should look like:
- List of employees who can use the company card and their respective credit limits.
- The establishments where purchase is authorized.
In finances or in general, “Prevention is better than cure”. Without establishing parameters to the use of corporate credit cards, internal controls aren’t established making it more of a boon than a bane.
Don’t worry, this is can be prevented if controls are placed but even with the most carefully-conceived guidelines and the best people to oversee your corporate credit card account; with a corporate credit card, there is always the potential of card abuse.
Pilfering and Over-buying are just simple forms of asset misappropriation that happens on the lower level management of a company. An example is over declaration of cost for a supplier for a cost of pens used by the employees everyday. A small change of the buying price in these folders can do a lot of damage in company for example it has 20,000 employees and each employee needs 10 folders a week, as example. If not tackled, card abuse can also indirectly lead to gradual acceptance of unethical practice in the office, which in turn impacts morale and work culture.
Do You Really Need That Corporate Credit Card?
Just like a personal credit card, a corporate credit card is something that needs careful consideration before you apply for one. Though it has the benefit of streamlining your company’s financial processes, you’ll need to make sure you have all the relevant guidelines and policies – and the manpower to boot – to make sure it’s working for you and not against you.
If applying for one gives you more questions than answers, then perhaps your company is not ready for a corporate credit card just yet. Why not check out our comparison table and compare credit cards to find which one suits your current need.