The Problem with Business or Club Credit Cards

So you have a credit card in the business or club name that offices/employees/workers use to make purchases for the business or club.  What if you see the statement and these purchases are unauthorized?  Unless you have a specific credit card policy signed by the person using the card, you cannot pursue the matter criminally.  And, chances are, if you try to recover in civil court, it will cost you legal fees and there will be nothing to recover.

Moral of this story: Do not allow anyone to have/use/hold a credit card in the name of the business or club without a signed specific authorization and limitation of use of that card for purposes directly related to the club or business – and limits on how much can be spent on a single item or per month or without authorization.  Have each person with access to the card sign the policy and keep the signed document in your file.

By Maura Phelan (maura@lpvlaw.com)

When a Long Term Employee can be bad for Your Business:

Area in which a small business or service can be vulnerable:

•             Long term, long time employees in your financial division that never take a vacation

You might believe this to be a good thing, but any scheme or plan to systematically divert funds takes care and maintenance.  An employee who is so much in control may be hiding something.

How to Address This:  Force all employees to take a two week vacation.  Not split – the full two weeks.  Most fraud schemes will fall apart if left unattended for two full weeks and your substitute can inform you of any aberrations.

CAVEAT: If you have two employees who cover each other’s position, bring in a third to fill the vacationers spot.  You might have fostered a team approach to your theft.

By Maura Phelan (maura@lpvlaw.com)