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Establishing Rules For Using Corporate Credit Cards

Are you thinking about obtaining corporate credit cards but you aren't sure if they are a good idea? As long as you handle the use of them effectively from the start they will be a very useful tool for operating your business. These days plenty of it can be done online, but there will likely be workshops, events, and even meetings you or your staff need to attend out of town.

The most common types of business related expenses that an employee may experience include transportation, accommodations, and meals. It is a good idea to get corporate credit cards that offer frequent flier miles as this will allow your business to get some of the travel needs covered for free. Many rental car companies offer discounts if you use a particular type of credit card as well.

Common hotel chains such as the Marriott, offer free nights and discounts for those businesses that frequently stay with them and pay with a corporate credit card. Find out about these chain hotels so that you can pay less for rooms. The more often that your employees have to travel for business, the more money you will save being a part of such offers.

It is a good idea to try to schedule travel arrangements in advance. This way your employees won't have to go over the set limits you have established for a flight or a hotel room while they are on business. While you want them to eat well too, you do need to have a cap on either the amount per meal or a daily limit they can charge. They really don't need to eat three meals a day at the most expensive restaurants out there, on your corporate credit card.

You also want to make the corporate credit card available for entertaining possible business associates. This may be to extend an invitation for a nice meal or a round of golf. It is a good policy to require these types of corporate credit card charges to be approved by management rather than the employees deciding when to do this

It is the responsibility of accounting to pay attention to the charges on the corporate credit cards. All of the expenses should be business related and someone needs to make sure they are. You may want to require employees to submit log sheets or receipts when the travel so that everything can be accounted for.

In most instances you can get several corporate credit cards issued under the same account. Make sure the company offers you a way to be able to identify the charges made by each employee that has one. For those employees that travel on a regular basis they should be able to keep their corporate credit card in their possession. For those that rarely travel you should issue them a card to use while they are gone and then return to you.

Corporate credit cards are a good idea as long as they are used properly. Once they start being abused though it is very difficult to get spending under control. Don't wait until you have problems with corporate credit cards before you establish clear policies about using them. It will save you both time and money in the long run.

By: Robert Bain

Robert Bain writes about how to build corporate credit the smart way, and avoid the common small business financing disasters.

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