Ghost cards

Problems with Company Procurement Cards

Many organizations allow their employees to use personal credit cards to buy goods and services on behalf of the business, for which they are reimbursed. This approach presents a risk to employees, since the company might choose not to reimburse them, or a cash crunch may delay reimbursement. A higher level of sophistication that avoids this problem is to issue company procurement cards to some employees, which allows them to make certain types of purchases that the company will pay for directly.

If either of these purchasing methods are allowed, employees can pretty much purchase anything from anyone, which may bypass the company's purchasing rules for dealing with a short list of preferred suppliers. Also, procurement cards are typically only distributed to a small group of individuals, leaving everyone else without a reliable purchasing method for smaller items, other than reimbursement by the company.

The Ghost Card

A third purchasing option that sidesteps the problems presented by the first two options is the ghost card. A ghost card is simply a credit card number that is specific to each company department, for use by anyone in that department. Purchases made on each of these cards are then charged back to the department to which the card was issued.

The ghost card concept makes it easier to assign the cost of purchased items to specific departments, while also giving more employees access to this purchasing option. This approach also speeds the rate at which the company is made aware of employee purchases; expenses submitted for reimbursement are sometimes not forwarded to accounts payable for months.

A ghost card can even be issued to selected suppliers. These suppliers simply charge the card number of every company purchase made through them, which reduces the paperwork that would normally be associated with each individual purchase.

Finally, the provider of ghost cards should be able to port data on purchases made directly into the corporate accounts payable system, so that no data entry by the payables staff is required.

A downside of the ghost  card is that former employees may still attempt to use it; this would not be the case if they had been issued a specific procurement card, since that card would be retired and its number inactivated when they left the company.

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Payables Management