What happens if someone uses their company’s credit card for their own personal use?

This not only gives you an idea of how much the card has been misused, but also provides you a point of reference to use when talking with the employee. ” series, we explore how AppZen’s Expense Audit enforces corporate credit card compliance and stops employee fraud in its tracks. This ongoing series highlights the capabilities and benefits of AppZen Expense Audit, bringing you deeper into what makes it tick and how you can take advantage. Express,supra(allowing suit against credit card issuer to proceed on claims of negligence, conversion and negligent misrepresentation;Permobile, Inc. v. GMRI, Inc., 2011 U.S. Dist LEXIS (M.D. Tenn.) . On the issue of negligent misrepresentation, privity of contract is not required.See, Id; Azur, supra.

• Charles is the quality control partner for McNair, McLemore, Middlebrooks & Co. where he provides daily audit and accounting assistance to over 65 CPAs.
• At the same time, using them exposes the company to certain risks.
• Company credit cards create an easy temptation for abuse from employees.
• Its common for businesses to struggle with employee expense management.

Misusing a What To Do If An Employee Misuses A Corporate Card card to me is a very clear example of failing to follow rules and procedures. Suspending or revoking charge card privileges is what one would expect the card manager to do in such circumstances. Thankfully OMB suggested that charge card program managers coordinate with the HR as part of these actions, but I am afraid that is not going to overcome some of the fundamental problems. Appendix B of OMB Circular A-123 entitled Improving the Management of Government Charge Card Programs sets out requirements for managing purchase and travel card programs. Manual expense processes don’t just create friction in terms of the acquisition of goods and services; they also create friction between controllers and employees. You may be limiting the number of cards you issue to address these very issues, but ironically this actually exposes you to risk in every one of these areas.

Stop employee corporate credit card fraud in its tracks

This scenario plays out more often than any organization would like to think or acknowledge. And, unfortunately, each time it happens, the company is exposed to security risks that can result in significant financial losses. Any duplicate expenses or mismatches are detected and indicated to the employees for rectification. Corporate liability might disincentivize employees from spending rationally.

Company resources are precious to keep the business running, however, pointing fingers at your employees without proof can sour your relationship with them indefinitely. First, you’ll need to get the payment receipt from the employee. This should be a fundamental part of your corporate card policy to approve and check payments.

Which Employees are Eligible for a Corporate Credit Card?

Corporate cards are a great way to manage your spending, control expenses, eliminate petty cash, and, most importantly – give your employees the freedom to focus on their work without any blockages. Although some companies offer electronic expense reporting to quicken report creation, the report submission and verification process is still manual. An expense management software automates and streamlines card expense reporting, verification, and reconciliation. Corporate credit cards are categorized as individual liability cards or corporate liability cards, depending on who would be responsible for payments and debts. Work with credit card issuers to have them provide alerts concerning card abuse. To prove theft, an employer may first conduct an internal audit of its accounting records.

• Some card issuers even offer electronic expense reporting facilities to accelerate the process of submitting reports.
• Frequently, apparent authority is established by demonstrating that the employer has repeatedly paid the unauthorized credit card charges.DBI Architects, supra.
• It will also have adverse effects on the company’s tax liabilities.

Employees’ need for speed no longer has to come at the expense of your organization’s security. Many companies think that by limiting the number of corporate cards they issue that they have more control over their finances. Embezzlement typically refers to situations in which employees misuse their employer’s funds.

How Does a Corporate Credit Card Work?

You can establish better control over corporate credit card use when you establish the guidelines on who is eligible to receive a credit card from the company. Setting control over issuance and the expenses you allow employees to charge will help minimize abuse. The monitoring of credit card use.Persons using company credit cards must know that someone else sees their purchases. For instance, internal auditors should routinely audit credit card activity. Company credit cards are given out as a matter of convenience, but they do not come without a substantial risk factor.

The cardholding employee is responsible for the payment of charges. They are also responsible for reporting those charges as business expenses to the employer for reimbursement. The credit card issuer checks the employees’ personal credit score before issuing them this card.

Felony offense from an embezzlement charge, he or she also suffers from a job loss. A strong defense, however, may counter the allegations and prove an employer wrong. Charged her with embezzlementfor allegedly misappropriating nearly $10,000, as reported by WPRI Eyewitness News.