Cue the pumpkin stands, trick-or-treating supplies, mannequins with sweaters, and the way-too-perfect apple-picking photos in your social media feed.
The calendar flipped to September and suddenly it’s fall … y’all. (Saw that one on a scrolling bank sign yesterday, so you know it must be true.)
For you, know that this is the beginning of the holiday cycle, which serves as a good reminder of things to prepare for in the coming months.
Like this…
If your Minnesota business has any type of beneficial ownership situation, the deadline for filing your BOI is coming up quickly. Not sure if you are a reporting company? Here’s how you know (as quoted directly from the BOI reporting FAQ page): “A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report.”
The rules are different if you created a business this year (2024) or start one after the deadline. They are:
- 2024: “90 calendar days to file after receiving actual or public notice that its creation or registration is effective.”
- 2025: “A reporting company created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective.”
If you’re still unsure about the whole thing, we’re here for you at Daffin Financial LLC. And if you’d like some guidance on it so you’re really clear on things, grab a time on my calendar:
calendly.com/gmdaffin
Now, if you’ll forgive me, I’m going to get pretty geeky today.
You probably didn’t realize that there are actual pros and cons to employees handling company expenses. Oh, I’m going to take you down a little rabbit hole today, yes I am.
Company Credit Card Policy or Reimbursement: Daffin’s Pro/Con List
“The secret of getting ahead is getting started.” – Mark Twain
Running a business means dealing with countless day-to-day expenses, from office supplies to small tools. Often, it makes sense for your employees to handle these purchases independently. After all, do you really need to be involved in buying every toner cartridge or parking pass?
Trusting your team to make these decisions can streamline operations, saving you time and improving efficiency. However, it also raises a key question: should you give your employees company credit cards, or should you reimburse them for out-of-pocket expenses? Here’s a breakdown of the pros and cons and some ideas to help you create your company credit card policy if you decide to go that route.
Some common expense categories employees might handle include:
- Office supplies
- Postage
- Parking and tolls
- Meals
- Small tools and parts
These purchases are essential for keeping your Minneapolis business running smoothly. So, deciding how to manage them is crucial and should be reflected in your company credit card policy or reimbursement policy.
Time Savings vs. Convenience
At first glance, issuing company credit cards might seem like the quickest solution. There’s no need for employees to submit expense reports, and you won’t have to deal with cutting reimbursement checks. But things get trickier if your company credit card policy doesn’t account for tracking expenses related to specific clients or projects.
For example, if employees are buying materials for a specific customer job, those charges will need to be correctly assigned to the appropriate account. This means someone will still need to review credit card statements, reconcile receipts, and categorize expenses—cutting into the time savings you thought you’d achieve. In larger businesses, this can result in a significant administrative burden.
On the other hand, if your business doesn’t require such detailed tracking, a company credit card can indeed save you time. Implementing expense management software alongside your company credit card policy can further streamline the process by automating expense categorization and receipt matching.
Balancing Trust and Risk
Handing over a company credit card is a sign of trust. You’re relying on employees to use that card responsibly, and in most cases, they will. But for businesses with a large workforce or high employee turnover, this can create a degree of risk.
It’s important that your company credit card policy addresses these trust and accountability concerns. You might consider limiting the credit limit on employee cards or setting specific purchase restrictions to minimize risk. For instance, many businesses now use virtual credit cards that can be assigned to employees for one-time or capped purchases, reducing the potential for misuse.
If you’re concerned about misuse or don’t know your employees well enough, it might make more sense to implement a reimbursement program. This way, employees are paying for their purchases upfront, and you can carefully review their expenses before reimbursing them.
Remote Work Considerations
With more employees working remotely, one thing to keep in mind is the growing complexity of managing purchases from various locations. This change can impact your business in several ways, including how you keep track of online purchases and where supplies are being shipped. Remote workers are more likely to make online purchases, increasing the challenge of managing expenses and ensuring compliance with your company credit card policy.
To handle this effectively, you could rely on centralized expense management tools that provide full visibility into spending, whether employees are in the office or working remotely.
Expense Reporting Systems
If you decide to go the reimbursement route, you’ll need a structured system to make things run smoothly. Here’s where creating a standardized process is essential. This system should:
- Clearly define which expenses are eligible for reimbursement.
- Standardize the forms and processes for submitting receipts.
- Include timelines for reporting and reimbursement.
By implementing an effective system, you can avoid some of the challenges that come with credit card usage, such as reconciling charges and ensuring all purchases align with your business needs. There are expense reporting softwares (like Expensify or Concur) that help by allowing employees to submit expenses through the app, attach receipts instantly, and automate approval workflows.
Ultimately, deciding between company credit cards or employee reimbursements comes down to a trade-off between time and control. A strong company credit card policy can simplify purchases, but reimbursement programs offer more oversight and accountability. Many businesses find that using a combination of the two—offering credit cards to key personnel while reimbursing others—strikes the right balance.
If you’re unsure which route to take, we’re here to help you assess your Minneapolis business’s specific needs and offer guidance on implementing the right solution. Let’s talk more about it:
Warmly,
Grant Daffin