How Company Credit Cards Can Empower Employees and Control Spending
Do you remember when you received your first credit card?
I would bet that you felt empowered. There’s a good chance you were in your early twenties – maybe your late teens – and you sensed that you were beginning to stake out your place in the adult world.
In a moment, I’m going to list some practical and specific reasons you should consider giving company credit cards to key members of your team, but I want to start with a reason that – while it may seem a bit less utilitarian – is probably one of the most important reasons.
Issuing a company credit card to key team members is a concrete way to express your trust and appreciation for them on both personal and professional levels. First, it’s obvious that the list of employees who you would consider for credit card issuance are the folks who are doing important work for your company.
Giving them a company credit card shows that you recognize their contributions to your success and are willing to express that recognition in a very real way. Today, leading a company to sustained growth requires developing and maintaining a creative and competent team. These qualities, in turn, require you to cultivate employee loyalty, which starts with your company culture.
An issue of fairness
Making employees use their personal cards is inherently unfair. You’re requiring them to loan your business money every month, and if they maintain a balance on their cards, they’re paying additional interest. This can create resentment. Don’t be a leader that fails to recognize the important place company credit card issuance has in creating a healthy and positive company culture through empowerment.
Another facet of this is that giving employees a company credit card shows that you care about their time. This is loyalty builder, but it also has some very practical implications for you and your employees.
Do you know anyone who enjoys filling out expense reports? I certainly don’t. They are tedious, time consuming, and frankly, prone to errors. Company credit cards can eliminate or significantly reduce this burden. You’re telling your employees that you value their time and it means that they will be able to spend the time saved in productive ways. This is a very practical way to empower employees.
Practical reasons for company credit cards
In addition, here are a few more ways employee credit cards can serve your business well:
- When employees use their personal credit cards, they receive the perks. When you move to company credit cards, your business will significantly benefit from the rewards.
- Along with eliminating the hassle of employees filling out expense reports, credit cards also eliminate or reduce the time your finance team spends reviewing those reports.
- Company credit cards give you the ability to review spending “at-a-glance.”
- Fast and simple review of statements makes it easier to be certain that employees are using approved vendors. This not only helps control spending, it makes it easier to get additional leverage when you’re negotiating for better pricing.
- Travel and entertainment costs are always difficult to control. When they are easily reviewed on monthly credit card statements, it shines a light on any potential problems.
Let me go down one quick side path before leaving this topic. Some small business owners make the mistake of using their personal credit cards for business. This makes it difficult to separate business and personal expenses. In addition to that, business cards often have lower interest rates and higher spending limits, which may benefit your business.
Have you examined your use of business credit cards? Do you think your current strategy and policies are the best for the management and growth of your company?