Controlling Purchasing Card Risk

March 8, 2012 — 1,278 views  
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It is a big day for you at the office. After a few years of hard work and promotions, you have proven that you can be trusted with something as important as a purchasing card. These slivers of plastic have nearly unlimited access to corporate funds, so a diligent company and its employees can follow a few basic tips to minimize the financial risk of p cards.

The goal of any risk mitigation program is to create preventative measures that stop fraud before it occurs. Therefore, a company should work with the bank issuing the purchasing card to draft a contract that all participating employees must sign. The document can include statutes on the financial liability of the respective user, as well as certain restrictions on transactions - a credit limit. It should also explicitly state the consequences associated with fraud and misuse.

Auditing every transaction can be a time-consuming process, and many companies forgo this important task altogether. However, this is essential to detect fraud, for even a simple banking mistake can lead to significant losses. In the interest of saving time and money, the solution is to audit heavy card users as well as high-value transactions - for example, an improperly charged corporate lunch is a lot less important than a $100,000 leasing transaction.