Getting the most from your corporate credit card program

A corporate credit card remains a great way to streamline purchases, monitor spending and earn cash back in rewards. It can also open the door to financial funny-business.

Unfortunately some less-than-honest employees will abuse cards to use them to cover personal expenses. And while you and your team likely comb through those statements carefully, there are a few situations to be aware of where your peers have gotten burned that are a bit out of the ordinary.

Take a look at what happened to these companies and how you can ensure your own corporate card program maintains strict compliance.

2 scams to watch for

Yes, if an employee has a sudden unexplained uptick in charges that would raise a red flag. But have your team also watch for these circumstances that can crack the door to fraud and abuse:

1. When employees leave your company. We’re not talking about employees taking some “parting gifts” when they leave; rather, watch the people who remain with you. The former finance director for the City of South Haven in South Haven, MI, kept open five cards that had belonged to former city employees. Using the ex-employees’ corporate cards, she purchased everything from fast food and vehicle repairs to jewelry and pet supplies. When all was said and done, she’d stolen more than $130,000 over the course of three years.
2. When you change card carriers. The former A/P manager at Columbus Regional Health in Columbus, GA, took almost $250,000 in a scheme with her finance director, who stole over $660,000 as well. How did they pull it off? Using old credit cards. When the company switched credit card providers, the director of finance was told to collect and destroy the old cards. Instead, she and the A/P manager kept and used them for personal purchases. The director approved the purchases and A/P paid the bills.

Promoting smart corporate credit card use, dissuading abuse

Of course, when your company places a corporate card in an employee’s hand, it’s also placing a lot of power and trust in them. And you want employees to use that power wisely.

So how can Finance create more awareness and increase compliance with corporate cards?

One company, Intermountain Healthcare, shared how they make it happen with the expense experts at Oversight.

Take a look at how Intermountain did it, then consider how you can mimic their process for success at your own company:

1. Training first. At Intermountain, employees can’t get a card until they complete module training sessions.
2. Sign here, please! After training, employees must sign a card agreement that spells out disciplinary action for violating policy.
3. Resources galore. At this point, Intermountain gives employees a summary sheet with the most important polices and additional resources. The company also pushes out a cardholder newsletter with timely reminders and policy tips.
4. Point system tracks it all. Intermountain tracks employees’ errors and spend behaviors with a point-based system. The less serious the offense, the fewer points. The more severe the violation, the more points the employee receives.
5. When lines are crossed, action’s taken. This points-based system has a limit. If an employee gets to 150 points, their card is suspended. Then Intermountain carefully looks at their transactions and has an “audit call” to discuss the errors and why certain purchases were out of policy.
6. Serve your sentence! To get their cards back, employees must complete the card training modules again.
7. Repeat offenders watched. Employees who hit 150 points a second time get their card suspended for a longer period, and upper management intervenes. If an employee hits it a third time, the card is permanently revoked.