In the landscape and lawn care business, we find ourselves on the road solving many problems. As such, we often require supplies that can’t be planned for, such as parts for our equipment, fees for mechanics who provide emergency repairs while on the road, meals while we’re out and about and other expenses that need to be paid for on the spot.
Enter credit cards for our employees — a perfect way to solve the problem of on-the-spot payments. While distributing credit cards to employees is a great idea, you should have some policies regarding limits and usage to prevent employee abuse and overuse. The following are three best practices I recommend you implement as part of your employee credit card policy.
Give cards only to trustworthy employees. Remember, trust works both ways and providing some employees with credit cards may empower those employees and show you trust them. This move can be positive if done properly. If you distribute credit cards to your employees and then distrust them, it can lead to bad vibes between you and the employee and a possible decrease in productivity. Therefore, distributing credit cards only to employees who demonstrate maturity and fiscal responsibility is the first best practice you should consider.
Lay out the rules. Devise a workable and smart expense policy. This policy should define acceptable purchases, the limits on purchases that don’t need approval, how the expenses should be submitted for reimbursement and if the company will pay the expense directly. It may be best to have a brief conversation with any employee who will have a credit card and carefully go over the guidelines. You don’t want to find yourself with large charges that the employee believed he or she had the authority to make.
Trust but verify. Check your credit card statements regularly, either by going online to analyze activity or downloading the transactions into QuickBooks. I highly recommend checking credit card charges daily, so you know exactly what is being spent and can identify potential fraud immediately. Question every charge you don’t recognize. In addition to the downloads, many credit card companies offer smartphone alerts each time a card is used. Depending on the volume of charges, alerts can get annoying, but perhaps a supervisor can monitor this important, real-time activity instead of the owner. Control is vital. Remember, an unchecked credit card can do a lot of damage.
Building a company culture of prudent spending is key to an effective employee credit card policy. If you’ve hired the right folks, then issuing business credit cards shouldn’t be a problem. Good employees will know when it’s appropriate to use them and will follow your direction when you define what the cards are to be used for.
