Using a Corporate Credit Card Responsibly

After a lot of work and a lot of responsibility, your boss at the corporation you work for has just given you a corporate credit card. The boss, however, may not have told you exactly what that means.

Keep in mind the cautionary tale of Seinfeld’s Elaine, who ended up in the Burmese jungle after using her expense account for cookware, a WaterPik and an $8,000 sable hat for her friend. Very few companies would allow you to put personal purchases on a corporate card, even if you pay them back. But that’s just the beginning of understanding how to use a corporate card.

Different types of corporate credit cards

A purchasing card allows you to purchase day-to-day items on behalf of the business, such as office supplies, couriers or computer equipment. A corporate card is a card that lets you bill business-related travel and entertainment (T&E) expenses. There are also cards that combine the two functions. Understand what kind of card you have and you will have a good starting point to know what expenses will and won’t be acceptable.

How will your corporate credit card work?

Your organization should have a clear policy of how corporate cards will work and how employees must use them. Make sure you understand:

• The purpose of your card
• How your card can be used. You will have a credit limit on your card, but you may also have a daily transaction limit, or certain merchant categories may be blocked.
• Who will approve your expenses
• What expenses are appropriate. Ontario’s ministry of education, for example, advises school boards that personal travel expenses or lavish gifts are inappropriate items for an employee to put on a corporate card. Many corporations also forbid cash advances.
• How payment on the card will work. Visa Canada, for example, offers corporations three different methods of billing: the company is billed and pays, the employee is billed and the company pays, or the employee is billed, pays and is then reimbursed.

If you are expected to pay and then be reimbursed, find out how what information you will need to provide, who you must give the information to, and how long it will take for you to receive reimbursement. Make sure you also understand the billing cycle on your corporate card.

Personal use of corporate cards

When it comes to Canadian federal government credit card regulations, corporations are free to dictate whether employees can or can’t use their corporate card for personal use. Most corporations forbid the personal use of credit cards – even the best-intentioned employee can forget to pay back a personal expense. Also, most corporations use a corporate card system specifically so that they can track business expenses, not so they can separate your business and personal expenses on your monthly statement. You will need to carefully understand and follow your particular corporation’s policy on personal use.

While a corporate card may initially make you feel as giddy as Elaine on Seinfeld, responsible use of the card is no joke. Understanding the rules, usage and policy on your particular corporate card will protect the financial health of for both your employer and you.