Lets simplify the expense process and give every executive a corporate card. Sounds simple but if not managed well this could be a nightmare for the company.
Credit cards are definitely a simple way to pay for expenses, but from an accounting perspective all expenses should have receipts to ensure whether the expenses are legitimate, are for the business not personal, for which period and what type, to have an audit trail and for tax documentation.
Maybe as a startup the audit is not on your mind, but ensuring receipts for all expenses puts a sense of accountability on the employees. It sets the tone for fiscal responsibility in the company. Setting the right fiscal culture goes a long way in the company.
Fiscal responsibility doesn’t mean the company has to be stringent, but setting up right expectations definitely is a must. Once the norm is to have $150 dollar dinner for two people, it’s hard to go back.
A good strategy is to set a policy that gives general guideline about using the card. Let employees know that the card is for business purpose and for each transaction they should provide receipts. Let employees know that they should be spending the company money like they would their own.
