Should You Give Your Employee a Business Debit Card?

It's not a decision you want to make too hastily.

Growing your small business can be exciting, but it can also bring new challenges you weren't prepared for. For example, you may want to delegate certain purchasing tasks to your employees so you don't have to do this all on your own. But to do this, you'd have to put a lot of trust in them to care about your company's finances as much as you do.

If you've been considering a business debit card for employees, here are a few things you should keep in mind.

Pros and cons of giving employees a business debit card

The upside of giving your employees access to a company debit card is obvious. They won't have to seek your approval every time they need to buy something to do their jobs, and you won't have to spend as much time running to stores or ordering things online to get your employees what they need.

But some employees may abuse this power. They might use the debit card to purchase things your business doesn't really need or even to purchase things for themselves. This can land your business in hot water.

Three steps to take when giving employees access to a company debit card

You can avoid the downsides of giving your employees access to a business debit card by taking the following steps.

1. Only give debit cards to employees who actually need them

There's no reason to give every employee access to a debit card. You should only give them to individuals who are involved with purchasing supplies for your company. More importantly, you should only give them to employees you believe won't abuse the power.

2. Set rules about how the employee debit card can be used

Draw up clear guidelines about how employees can use the debit card, including what they can purchase with it, how much they can charge to it, and when they need to seek your approval before making a purchase. Share this with all employees who will have access to the debit card and get their written acknowledgement of the rules.

3. Impose limits on debit card spending

Some small business bank accounts may enable you to set limits on how much employees can charge to the debit card. This can act as a failsafe for your finances. Even if an employee decides to ignore your rules for debit card usage, they won't be able to charge too much to the card each month.

You probably have a pretty good idea whether certain employees in your company can be trusted with the use of an employee debit card. But it doesn't hurt to take the above steps just to be safe. And if you find that the employees aren't using the debit card very often or are using it improperly, you can always take it back later.