Ways To Protect Your Small Business Credit Line
Nov 23, 2009 Business Loan
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Whether you are a firm owner of a convenience stores, retailer shops, or gas stations, how do you protect against company mal-practices? If you control a small business chances are you’ve most likely developed some credit lines with local vendors. If you have a company that has employees then you may be in a position of having to trust other people to use those credit lines for you.
Businesses frequently have employees such as delivery drivers, someone who fills out expense report. Some people that are trusted to pick up materials from time to time. For example if you own a carpentry shop, plumbing company or other such firm. You are the boss and you often need things so you don’t get the time to be running out to the store every time a person in your business needs something. So then the apparent alternative is you direct someone else to do it. Unless you want to give that person a check every time you need something you are better of establishing some sort of business credit line.
Commonly the company you established the credit line with will have the person picking up the item sign an invoice to acknowledge the purchase for their records and then give a second copy to your worker. It is your worker’s responsibility to give you that copy so you can pay the bill when it comes due. Over time as the person doing your shopping becomes known to your suppliers, then the chance for misuse develops.
When it is time for you to the bill, you should observe it carefully. This is your opportunity to check and see if any other suspicious event is taking place. Check the invoice for things like the date of the purchase was made and if included on the invoice what time did they make the purchase? Was the purchase made during normal company hours or was it after? Often such bad purchases are made on a weekend. People that misuse your trust many times could try to do things after hours and tell the vendor about working late.
There are particular things you can do to avoid the problem. Most suppliers maintain a card of official signors from your company. This way if you spot a signature you do not recognize the vendor can be held reliable for granting the payment. It will still be your obligation to handle the employee and their conduct. You can also inquire the vendor to send copies of all invoices to you so that you can verify all purchases. You can make it known to your employees that you do check all the statements and expenses from your vendors just so that you can discouraged them from doing something they shouldn’t.
Nearly all employees would never be regarded as abusing the trust given to them by an employer but there are always some that feel they can get one over on the boss. They could want to get back at you due to not giving them a raise, or being disappointed about some outcome. The point of course is that it does happen and it’s better to be safe than sorry in the future.
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