[Continued from Part 1]
4) Don’t Hesitate to Investigate
When it comes to financial accountability, record keeping is paramount. No matter how much you trust your team and how lenient you want to be, having clean financial records shouldn’t hurt anyone who is above-board about their expenditures. This means that for every company credit card expense, there should be a clear and well-defined explanation.
Start by making it a policy to write a report each time the card is used. Just like how the police write a report for every time they have to fire their guns, it’s not punitive when it’s standard procedure. And if anything doesn’t immediately line up on paper, don’t hesitate to investigate. Ask the card holder to write a clearer report, explain the unusual circumstances, or audit if you have to. It’s always better to know.
5) Have a Clear Set of Rules
When it comes to employees who have spending authority, the best way to keep everyone on the same page is to have a clear set of written rules. You want to define how much social employees are allowed to spend entertaining a client, when they are allowed to accept travel package deals, and how it is appropriate to spend per-diem budgets. The more rules you define with electronic payments, the easier it will be for employees to follow them.
Of course, unexpected situations happen. Clients can get out of hand, employees might get inspired in a distant city, or a hotel might offer a package that is hard to resist. Travel mistakes happen and employees have to think on their feet. And when a questionable expense occurs in these circumstances, you realize that a new guideline is necessary to help employees deal with a similar situation in the future.
Always be ready to write a new expenditures guideline, with leniency for the first employee to encounter an undefined situation. Consider putting together an easy-to-reference handbook so that employees can check their situation before making a decision or calling for guidance.
6) Don’t Be Afraid to Audit
Many employees are afraid of a financial audit, certain that no matter how careful they have been the company will find something to penalize them for. But this looming fear breeds deception. Employees are more likely to try and hide their electronic payments instead of writing an honest accountable report.
In order to both keep your books correctly and effectively manage your people, avoid becoming the financial audit boogy man. Be very careful about when and how you choose to discipline employees who overstep their bounds with the company card. Let the punishment fit the crime. Be lenient about understandable mistakes and strict about blatant abuse of the privilege.
Also, be as transparent as you can afford to be so that other members of the team can see how you carefully address accounting issues. This will make it easier for employees to report their own mistakes and come to you when they’re worried a coworker is misusing their card without fear of unreasonable consequences.
7) Have Backup Plans for Potential Problems
Finally, be ready to handle the emergencies and unexpected situations as they do come up. Many employees make mistakes with the electronic payments or credit cards when they have to solve problems on their own. Missing a flight, discovering a rental car was not reserved, dealing with a client who demands overspending.
If you can, have a plan for handling the unexpected and out-of-control situations before they happen. Policies are a good place to start but you may also want a help line that traveling or entertaining clients can call at all times for help. A travel manager or service and a financial manager who are available for situational consultations can help your employees make the right company card decisions in the moment.
Employees are given company cards because they need to be able to decide how expenditures are made. Whether it’s entertaining clients or handling their own travel arrangements, keeping these accounts on the level requires a combination of well-written policies, record keeping, and expert management. When your employees know exactly when and how they are authorized to use their cards, everyone will have an easier time using their cards correctly without mistakes or the temptation to splurge without permission.