Managing Risk with Commercial Card Programs
Don’t leave the door open to risk with your corporate card program. With a customized commercial card program, you can set guidelines and reduce risks of fraud and misuse.
Commercial credit cards are a cost-effective and convenient solution for many business purchases. However, there’s always a chance that your card program could be misused — either intentionally or unintentionally — in ways that add to your costs and leave the door open to risk.
That’s why it’s important to define procedures and protocols to manage risk and guide responsible corporate credit card[SB1] use. Setting up your own credit limits and purchasing procedures, and heading off misuse and fraud internally can protect your bottom line and keep your liability in check.
Define Rules and Guidelines
In many cases, key corporate expenses made by employees are preauthorized and pose minimal risk. A company’s unique purchasing demands and the extent of travel and entertainment transactions made by individual employees may trigger the need for certain rules. Consider the following when defining your purchasing card procedures:
- Develop companywide T&E and card usage policies with rules for acceptable amounts and types of purchases, whether they are to related travel and entertainment or everyday purchasing such as office supplies.
- Screen employees to be issued cards, be vigilant about who is given purchasing power, and have them sign an agreement for card use.
- Define spending category limits for card users. Corporate card programs are built with cardholder credit limits, but you can set specific limits for individual users that limit the types of purchases they can make. Doing so helps mitigate credit risk by limiting spending opportunity where it’s not needed.
- Monitor individual card activity through mobile enabled expense review and approval workflows that include receipt images to make sure spending is legitimate.
- Periodically audit your transactions through random sampling and use reporting tools that allow you to search for transaction characteristics outside of your company policy.
- Communicate the risks and reasons behind your purchasing card limitations. When employees and management are aware of the risks, they are more likely to take card misuse seriously.
Reduce Risk with a Customized Program
With Amegy Bank, you can design your commercial credit card program to suit your organization and minimize risk. You have complete control and oversight over your program, including:
- Set employee-specific spending controls on purchase amount, number of transactions, types of suppliers and other criteria for any spending category.
- Closely monitor business spending with mobile expense management tools.
- Stop potential fraud quickly with Mobile Fraud Alert Service.
- Detect misuse and streamline audit procedures using Visa Compliance Auditor.
Contact a business banker at Amegy Bank to learn more about managing credit risk and preventing or detecting fraudulent use of cards. We have a dedicated support team to consult on commercial card solutions.