Some Methods To Protect Your Business Credit Line

If you are a business owner of a hardware stores, printing shops, or gas stations, how do you protect your business from employees abusing your business line of credit? If you run a small business then you’ve most likely established some credit lines with local vendors. If you have a company that has workers then you may be in a position of having to trust other people to use those credit lines on your behalf.

Businesses often 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 shop needs something. So then the apparent solution is you send someone to go out and do it. Unless you want to give that person cash every time you need something you have already established some sort of business credit line.

Typically the business the credit line 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 employee. It is your employee’s responsibility to give you that copy so you can pay the bill when it comes due. Over the course as the person doing your shopping becomes known to your suppliers, then the opportunity for abuse manifests itself.

When it comes time for you to the bill, you should observe it cautiously. This is your chance to see if something is going on that shouldn’t be. Check the invoice for things like the date the purchase was made and time did they make the purchase? Was the purchase made during normal business hours or was it after? Often such fraudulent purchases are made on a weekend. People that abuse your trust many times could try to do things after hours and tell the vendor about working late.

There are certain steps you can do to avoid the problem. Most suppliers maintain a list of approved signors from your company. That way if you see a signature you do not distinguish the vendor can be held responsible for allowing the payment. It will still be your responsibility to handle the employee and their action. You can also request 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 invoices from your vendors but don’t make it sound so threatening though.

Almost all employees would never consider abusing the trust given to them by an employer but there are always certain people that feel they can get one over on the boss. They could want to get back at you due to not giving them a promotion, or being frustrated about some consequence. The point of course is that it does happen but it can be prevented before it happens.

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