Friday, January 04, 2008

When Was The Last Time You Looked At Your Corporate Credit?

By Robert Bain

Why is it that most people keep better tabs on their personal credit than on their business credit? You can be sure criminals know about this and they will use it to their advantage. They can obtain new credit in that business name in large amounts, access it, and be long gone before many business owners have any idea what just happened.

It used to be that identity theft was only something individuals had to deal with. However, it didn't take long for criminals to know that they can access larger amounts of money on a corporate account. It also takes longer in most cases for them to find it. Many people don't think it is stealing if it is from a business instead of from a person.

Even though there are screening processes and background checks for employees, white collar crimes continue to increase. Have a good system in place to prevent your corporate credit from being compromised by your employees. There have been stories that employees have purchased homes and cars with corporate credit that didn't get noticed until years later.

A couple of personal dinners on the business credit card isn't going to harm anything right? This is often the attitude that some employees have. They will use what it intended for business related expenses personally. Even if it is only $100 a month that adds up rapidly, especially if you have several employees involved.

Corporate credit access is often necessary for many of your employees, but establish clear guidelines for it. Make it know that they accounts will be reviewed on a regular basis. Let them know they have to submit receipts for everything or they can be liable for the charge. Have strict policies in place relating to how you will deal with corporate credit being abused.

Corporate credit needs to be readily available when you need it. There may be some amazing deals on the table for you to benefit from. This can result in buying new equipment or a larger building. If your corporate credit has been compromised in any way it can prevent you from accepting such offers. Always know what your corporate credit profile looks like so there aren't any surprises lurking around the corner.

Avoid frivolous expenditures on your credit accounts as well. Too many new business owners see the amount of money they have access to and make unnecessary purchases. As a result their profits go to pay for these items plus the interest that has accumulated for them. This prevents people from being able to use the credit they need when it matters the most.

Always know what you have available in the way of corporate credit. Keep an eye on those accounts and who is accessing them. Ask in house questions about any issues that don't seem right to you. Make sure any lost or stolen credit cards are reported immediately.

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