An announcement that around 20,000 government credit cards will be frozen as part of a clampdown on ‘wasteful spending’ has been hitting the headlines and has got many people talking. It may lead some businesses to think about Company credit cards/expenses in their organisation, particularly in the face of what for some may be an increasing squeeze on their finances generally.
Here are five top tips for businesses when it comes to Company credit cards/expenses:
- Have a clear policy
- Make sure people in your business know the rules
- Have appropriate processes in place
- Review and assess
- Know what to do if you suspect wrongdoing
1. Have a clear policy
It may sound obvious but having a clear policy on Company credit cards/expenses is a simple step that can work wonders. It enables your business to clearly set out your rules in these areas, reducing the risk of issues arising and putting your business in a more robust position to deal with any that do.
Whilst some businesses do experience conduct issues where an employee has acted in a deliberate way, (e.g using a Company credit card for personal purposes where this is clearly prohibited by that employer, failing to seek advance authorisation for a purchase for the Company above a set amount) issues can also arise where there is uncertainty (for example if employees working away are permitted to claim reasonable expenses for food, guidance/limits may be needed around this). An effective policy can help to combat uncertainty and save management time in dealing with avoidable issues.
2. Make sure people in your business know the rules
It’s important to make sure that you clearly communicate your workplace rules, including those around company credit cards/expenses, not just to employees but to managers and other relevant people in your business too so any issues of concern can be spotted and picked up promptly. Including your policy on Company credit cards/expenses as appropriate, in induction training, team meetings and refreshers where needed can help you to make sure your employees know the rules, and if needed, support your businesses in evidencing this.
3. Have appropriate processes in place
Many businesses have processes and controls in place when it comes to the use of Company credit cards / claiming expenses. If your organisation operates more informally, you may wish to consider whether formalising your position would better support your business, for example, because your workforce has grown.
4. Review and assess
Things change over time so it’s important to make sure your policies and processes continue to be relevant and appropriate for your business. Reviewing and assessing areas such as your Company credit card policy periodically can help you to ensure they meet your business needs. If you identify any changes you wish to make, remember it’s important to seek advice on the facts of your situation before taking any action.
5. Know what to do if you suspect wrongdoing
If you reasonably suspect misconduct has occurred, for example, a Company credit card has been used for prohibited purposes, it’s important that the matter is dealt with promptly and appropriately.
In brief, if an employee has two years’ service or more, from an HR perspective this will usually involve:
- Carrying out a full and thorough investigation into the matter
- If there is sufficient evidence to warrant it, inviting the employee, in writing, to attend a disciplinary meeting, enclosing the evidence and advising them of their right to be accompanied.
- Holding a disciplinary meeting
- Following the meeting, giving the employee a written outcome with a right of appeal
If you have concerns regarding a potential conduct issue in your business, please contact us for advice before taking action. We can provide guidance and support on the situation your business is facing and the steps to be taken.
You may find it helpful to bear in mind that if your employee has short service, it may be quicker and easier to dismiss them for their conduct than would otherwise be the case as at least two years’ service is usually required for an ordinary unfair dismissal claim. That said, whether a quick ‘short service dismissal’ is safe depends on the individual circumstances of the situation you are dealing with so it’s always important to seek specific advice before taking any action. This is because there are some claims employees can bring from day one of their employment, such as discrimination and dismissal for an automatically unfair reason, so it’s important not to get caught out.
Need help with an HR issue? Please get in touch.