Treat credit card expenses just as seriously as you would regular purchases.
While the dollars may be much less, you could save a lot of discretionary spending with little or no corporate value.
- Decide if corporate credit cards are really necessary or could be cut back. Have people put things on their own credit cards and submit the expenses. When it is not as automatic like on a corporate credit card, some expenses may just go away. If cash flow is an issue, consider modest cash advances. Make the reimbursement process simple and quick.
- If you still need to use credit cards, separate out the business from the personal. Have a separate credit card for business only. Avoid running personal costs through. Shut that door. It also greatly simplifies things for accounting. One of the most unpleasant tasks accounting can have is going through credit card statements and having to separate out personal versus business expenses. It is a great waste of time, drains their energy and is very messy. It also opens up questions for taxes that the IRS might challenge in an audit.
- Decide if some things should really go through accounts payable and paid by check rather than by credit card. Sure, it may be nice to rack up the airline miles, but you may be paying a real hidden cost. It could make those free airline tickets more expensive than first class travel.
- Have accounting keep on top of credit card charges. Do not wait for the credit card statements. Have them download data from the online statements. Do it weekly or more often if there is enough volume. Get the information processed more frequently than monthly.
Know what you are on the hook for. You may be liable for the credit card charges personally. Even if you shut down your company, the credit card companies could still come after you.
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