How Many Employees Should Be Allowed to Use a Small Business Credit Card?

When you sign up for a new credit card, you typically receive an offer of additional cards for other people that you’d like to allow to use your account. It is common for people to get an additional card for a spouse. It is also common for employers to allow multiple employees permission to use a business card. This type of situation can facilitate purchases because the card holder doesn’t have to be the one running around doing all of the buying. However, it also poses risks, especially when you’re talking about allowing employees to make purchasing decisions in a business. As a result, it is important to be cautious about who is allowed to use the business credit card.

A small business should typically have no more than three people who are allowed to use the business credit card. The main credit card holder will be the owner of the business. If there is a co-owner, business partner or top-level manager for the business then it is acceptable to get an additional card for this individual since he or she is likely to already be involved in making decisions about purchases for the business. Finally, there should be someone allowed to use the card to make general business purchases that don’t require extensive owner approval; this is usually a secretary or office manager. You want to have someone that’s able to run to the store and buy toilet paper for the business bathroom without getting your approval.

Some small business owners opt to refuse to allow a second or third person to have a card on the business account. They deal with the whole toilet paper problem by having a petty cash drawer in the office. In general, this is not a recommended course of action. For one thing, it’s actually significantly easier to steal from the business if you have access to cash than it is if you have to use a credit card to make purchases. Another reason is that it’s easiest to keep track of business expenses for the purposes of accounting and taxes when everyone making purchases for the business is using the business credit card account.

At the other extreme are business owners who allow practically anyone in the company to make use of the business credit card. This is especially common in small business offices where everyone is working together closely and handling multiple tasks for the business. This is also a flawed approach. For one thing, the more people you allow to use a business card, the more risks that you’re taking with the company’s money. Additionally, it gets confusing for a business when many different people are taking it upon themselves to make purchases on behalf of the business. They may be legitimate purchases but if they’re not organized then they can be wasteful.

The smart business owner will implement a system of business credit card use that keeps risks to the company low while increasing business efficiency. This means allowing at least one but no more than two staff members to use the business credit card. Make sure to also check with the credit card company about insurance and protections for the business credit card. Capped spending limits for specific employees, online user-based usage tracking and liability insurance are all available on many business credit cards.