Word gets out if you treat cardholders differently—particularly if you allow some to get away with breaking the rules. One risk is cardholder resentment, which can shine a poor light on the program. Even worse, it can lead to card misuse and abuse by the “favored cardholders” who know they can likely get away with it. As such, it is critical to consistently enforce card program policies and procedures, regardless of an employee’s job role/position. This requires some planning, so following are three action items to support this Commercial Card best practice.
Three Action Items
1. Determine the Consequences for Non-compliance
To prevent a debate over what to do every time a rule is broken, identify the appropriate action up front. Consistent consequences are part of consistent enforcement, but they should be based on the severity level of a particular infraction. Consider the different types of issues, which vary widely. Examples include:
- ordering a higher quality good than what is allowed
- using a non-approved vendor
- late reconciliation of transactions
- missing or vague receipts; some organizations offer a “missing receipt form” for cardholders to complete, but be aware that receipt issues could indicate fraud
- personal use of the card that the cardholder presents as a legitimate business transaction; in other words, fraud
Some things might warrant a warning and/or additional training, but it could depend on whether it is a cardholder’s first offense or part of a repeated pattern. Fraud should be grounds for termination and never tolerated.
Ensure you also decide how to address the “approving manager” associated with a non-compliant cardholder. After all, they fulfill an oversight role. Their sign off on cardholders’ transactions represents that the transactions are legitimate and comply with program policies and procedures.
2. Create Template Email Language
Besides ensuring a consistent message when communicating an issue, having a ready-to-use template speeds up the process since you will not have to start from scratch. The tone of the email should align with the severity of the issue, as well as your organization’s internal culture. Before finalizing the template, obtain approval from management.
3. Establish a Way to Track Infractions
Finally, tracking infractions by cardholder provides documentation to support the consequences. In addition, the ability to review and filter infractions organization-wide can help instigate change by highlighting: 1) possible gaps in the training and/or 2) unclear/vague policies and procedures.
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About the Author
Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With 20 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…