CORPORATE CREDIT CARDS:Pros, Cons & Cautions

Credit cards can help companies streamline their purchasing and spending, but they don’t come without a few drawbacks. Consider these pros, cons and cautions to make sure you’re maximizing the benefits and minimizing the risks of corporate credit card usage.

PROS• Cuts down on paperwork and processing

(expense reports and reimbursements)

• Earn benefits (like rewards or cash back)

• Helps manage cash flow

• Increased convenience and transparency

• Allows for close monitoring of employee spending

• Manage small purchases without using cash

• Potential for personal charges on company cards

• Unnecessary business purchases due to spending limits set too high

• Lack of fraud coverage and purchase protection depending on the credit card

• High finance charges if payments are not made on time

CONS

RKLcpa.com

CAUTIONS• Be judicious when distributing cards

• Ensure fraud protocols, like card freezes, are available

• Implement sound policies that card holders must acknowledge

• Devise a policy to handle rewards earned

• Consider using a more formal payment process to large vendors (purchase order, invoices, appropriate approvals) for documentation purposes