I do not believe in distributing corporate credit cards to the management team or employees. Let me explain why. I have had two transactions with employees that have convinced me that if you own a company, it is not a wise decision to issue your employees a company credit card.
I was the President / CEO of a large corporation ($475 million in sales) doing a turnaround when the first transaction occurred. The business was losing approximately $500,000 per month. During the first week when I started, I reviewed the company’s American Express invoice for the current month. The charges on the bill shocked me. The management team and the eight sales managers each had a company credit card.
Corporate Issued Credit Cards
One of the sales managers had a charge on his card for $12,000. It was in the year 2000, when $12,000 was worth a little more than it does today. I did not recognize the vendor who received the $12,000. I called the sales manager to my office to ask him about the charge. When he arrived and saw the AMEX bill on my desk, he looked distressed. He lowered his head and did not look up at me while he told me the story about the $12,000 AMEX charge.
He and a client with the client’s management team went to a “gentlemen’s” club. Late in the night after several beverages, they ended up in the VIP room with several “performers” to entertain them for a couple of hours. The client drank so much that he passed out and was taken away in an ambulance. My sales manager ended up paying the bill and used the company credit card because that was the only card he had with him with a high enough credit line to cover the $12,000 charge.
I asked him how and when he was going to reimburse the company for the AMEX charge. He said that he would bring me a check for the total amount the next morning. Even though I wanted to fire him immediately, I waited until the end of the pay period, so I had the money refunded and his check cleared the bank.
Immediately, I called the HR manager and the VP of Sales into my office to have little chat. Neither one of them enjoyed our meeting. Based upon the event at the “Gentlemen’s Club,” we added to our corporate policies and procedures manual. We added a policy stating that entertaining customers must be preapproved and will never be done at a “Gentlemen’s Club.”
Corporate Issued Credit Cards are a bad idea every time!
Two days later at the weekly management meeting, I had the CFO of the company collect all the AMEX cards from the managers, and the VP of Sales gathered the rest from his managers.
About the Author
Robert S. (“Bob”) Curry - Bob Curry is an Author, Keynote Speaker, Seasoned Business Coach, and successful Turnaround Specialist. Earlier in his career, he served as President and CEO of three different companies, the largest with annual sales of more than $1.3 billion dollars - all which experienced successful turnarounds under his management. After turning around three companies as the President/CEO, he started his turnaround consulting firm, and for the past twenty years, he has turned around more than eighty distressed companies in many different industries helping each to establish a strong management team and become profitable. He has published three books: "From Red to Black," "The Turnaround," and “The Turnaround 2.” He resides in Fort Lauderdale, Florida, with his wife, Esther.
All three books are true stories about the turnarounds of real companies that I have turned around during my career. In each book, I shared my (“PIR’s”) Profit Improvement Recommendations which helped turnaround the companies from Losses to Profits. PIR’s help to grow sales, reduce expenses, improve cash flow, increase profits, and most noteworthy, strengthen the management teams. All three books are on sale on Amazon.com in paperback, kindle, or audio.