The Finance Blogger

Company credit cards provided by your company are useful for employees and corporations for many reasons and both can benefit from having a credit card that has the company’s logo on it. Employees do not like to charge things to their own personal credit cards and invoice the company. Cash flow is a problem. Depending on the amount in question, many employees may not have sufficient available credit on their personal cards. In addition, they have to wait a few weeks to be reimbursed for the expenses. They may even have to pay interest charges as a result if they do not have the cash to pay the balance before the due date.

Company credit cards solve this issue nicely for employees. It is a separate card. The card is in their name and can affect their personal credit rating. The company is on the hook to pay the balance within the prescribed time frame as agreed on in a contract between the company and the credit card company. The employee is still required to provide an explanation of all expenses and obtain approval. There is no personal money involved. The company still receives 30 days of use of their money by having these expenses charged to a credit card and not having to provide a cash advance.

Purchasing Personal Items

Sometimes employees will use the company’s credit card to purchase personal items. This may be a mistake sometimes when they just grabbed the wrong card to pay for something. On other occasions, they might have maxed out their own personal cards and are using the company’s credit card instead. This is against the rules for most companies. However, they get away with this by attaching a check with their statement. The check is payable to the credit card company for the total expenses that are considered personal. Supervisors frown on this activity. They discourage it whenever they see it. However, it does happen often. As long as you pay your share when it is due; there is usually no major problem.

Personal Expenses

Another situation where personal expenses find their way onto a company credit card is when a combination of personal and business expenses wind up on one bill and the person pays for the entire amount on the company’s credit card. This is also common and easily corrected by calculating the amount and writing a personal check to pay for the personal portion. Again supervisors do not care for this type of transaction since it complicates the tracking of expenses and the approval process. Companies that apply for tax rebates must also account for the split of personal and company expenses in their calculations, which of course complicates everything.

Negotiating Company Credit Card Plans

Whether you are negotiating for a large company or a small one, there is always an opportunity to negotiate the best deal for your company. Negotiate before you sign and look for benefits that will be valuable to your company and to your employees. If you can save money or get to use money for a longer period of time then it is a benefit. If your employees receive benefits as well then this can be claimed as an employee benefit to make it more attractive to work for your company.

Many credit card companies have standard offerings. You may just have to go with what they have to offer, however again it never hurts to ask.

Match Your Company Credit Card with Your Business Cards

Company branding is important for all business owners. Matching your company’s logo on your business cards, your letterhead, on advertising that you do, and on your credit cards is just one more thing that many companies do to enhance their corporate image. Flashing your company’s logo every time you charge something can be great advertising. Especially if it communicates your business name and the product or service that you deliver.

For more details on how to use credit cards, click here.

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