Trust But Verify All Spending
As a business owner, it’s crucial to strike the right balance between trust and oversight. On the one hand, it’s essential to trust your team and give them the autonomy they need to do their jobs effectively. On the other hand, it’s equally important to keep a close eye on the financial health of your company, especially when it comes to unexpected expenses and unauthorized spending.
Here is a real-life story that illustrates this point. A business owner built a successful company with substantial profits. He had a big heart and hired a family friend who had accounting experience and was in need of a job.
Everything seemed to be going well until, two years into the job, the accountant was injured in a car accident and had to take time off for recovery. In an effort to help with the backlog, the owner began looking through the stacked mail and discovered an alarming 15 credit cards in the company’s name that he didn’t know existed.
At first, the owner was confused and concerned. How could these credit cards have been obtained without his knowledge? Who was responsible for using them, and for what purpose?
To get to the bottom of this mystery, the owner took several steps. First, he contacted the credit card companies to determine the extent of the unauthorized spending and to cancel the cards, if possible. He also conducted an internal investigation to figure out how the cards were obtained and who was using them.
The investigation revealed that his internal accountant, who was also a close personal friend, was responsible for obtaining the credit cards without the owner’s knowledge. The owner was disappointed and disheartened by this betrayal of trust, but he knew had learned a valuable lesson. He should always be involved in the oversight of his accounting.
This situation raises a crucial question: how can business owners prevent unauthorized spending and protect their companies from loss?
Take These Steps To Protect Your Company
Docyt could have helped mitigate theft through the software’s tracking capabilities. Additionally, companies who have a system in place to manage and track spending are less likely to experience fraud and financial loss. Here are some guidelines.
First and foremost, it’s important to have robust internal controls in place, including strict policies and procedures, for obtaining and using company credit cards. This can help prevent employees from obtaining unauthorized credit cards and using them for personal expenses.
Second, use software tools that automate and streamline credit card spend management for you. If you’re manually collecting employees’ receipts and manually matching them to the credit card statements, it’s time consuming and error prone.
Docyt is an accounting automation software platform that includes automated credit card spend management. Here’s how it works.
When setting up your corporate credit cards in Docyt, it’s important to establish access controls and software permissions for every credit card. For example, within Docyt you can identify each credit card, enable a data connection so the credit card transactions flow into Docyt, and choose who can upload receipts and who can approve receipts.
Additionally, every expense has to go through an approval process so there are no expenses that slip through the cracks. This allows business owners to have full visibility into how every card is being used. Lastly, Docyt enables business owners and managers to automate the matching of receipts to credit card transactions using Docyt’s AI-powered Autopilot feature.
Get Started with Docyt
Ultimately, the key to preventing unauthorized spending and protecting your business from financial loss is to strike the right balance between trust and oversight and to operate with the right business tools. Trust your team, but be vigilant about monitoring company spending through reporting and tools. By taking these steps, you can safeguard your company and ensure its continued success.
If you’d like to learn more about how Docyt can help you track your credit card spending, schedule a free consultation today.