Travelling for a Bankrupt Company

[Tooner]

As I have been leaving and breathing (not sleeping) Lehman Brothers in the last week, I found this article in Gulliver both amusing and disturbing

Business travel for a bankrupt company | Gulliver | Economist.com

Makes you think about what would happen if our employer went bankrupt while we were travelling on their behalf, where are we left.

Where did I put that guff about my corporate credit card....:shock:

BTW, if you haven't seen it, Gulliver is a useful blog, with interesting notes and extended Economist City Guides. (and no I'm not employed by them).

 

[Dave Noble]

When Im travelling I do try and minimise my exposure.

I am currently in the US and did get the business class flights reimbursed before I left and have been claiming hotels et al twice a week so my exposure is limited to a few nights hotel bills

Dave

 

[Mr_Gimlet]

I was an exec at Ansett when it went belly-up, and basically we were all liable for our own credit card bills for company travel etc. It was deducted from redundancy payment.

Some guys were up for thousands, I got away with next to nothing as I had a clear diary then.

 

[thewinchester]

BTW, if you haven't seen it, Gulliver is a useful blog, with interesting notes and extended Economist City Guides. (and no I'm not employed by them).

Thanks for the blog tip Tooner, haven't come across that blog before. Just been added to my feed reader list.

 

[Dave Noble]

The key thing is whether using a Corporate Card which has personal liability or one with corporate liability or whether using own funds to pay for the travel

If using personal money/card or using a corporate card which has individual liability , then the employee will be left liable for any monies owed.

If using a corporate card with corporate liability, then the employee is safe and will owe nothing

Ime, typically corporate VISA/MC tend to be corporate liability. AMEX offers Corporate cards in both Individual or Corporate, so will depend on the agreement signed

Dave

 

[oz_mark]

Ime, typically corporate VISA/MC tend to be corporate liability. AMEX offers Corporate cards in both Individual or Corporate, so will depend on the agreement signed

Amex can also be 'joint and several', so they can go after either party

 

[Dave Noble]

Amex can also be 'joint and several', so they can go after either party

AMEX in AU offers

Corporate Liability - Employee not liable
Individual Liability - Employee Liable
Limited Liability - a hybrid for which the employee is liable for charges on the card other than those which are business expenses and the company is liable for business expenses

Dave

 

[oz_mark]

AMEX in AU offers

Corporate Liability - Employee not liable
Individual Liability - Employee Liable
Limited Liability - a hybrid for which the employee is liable for charges on the card other than those which are business expenses and the company is liable for business expenses

Dave

Wrong. American Express Corporate Card: Liability Protection


Joint & Several Liability
Both the company and the individual Cardmember are jointly and severally liable for charges incurred.

Limited Liability
The individual Cardmember is liable for all charges. The company is jointly and severally liable for:
Charges for business expenses which it fails to reimburse the Cardmember for; and
Charges incurred after the Cardmember leaves the employment of the company and before the company notifies us of this.

Individual Liability
The individual Cardmember is liable for all charges.

Full Corporate (Sole) Liability
The company is liable for all charges.

 

[bambbbam2]

At work we use the NAB Purchasing Cards.

I'm not sure who is ultimately liable, but I'd be worried if the government couldn't pay it's debts..

 

[Dave Noble]

Wrong.
Limited Liability
The individual Cardmember is liable for all charges. The company is jointly and severally liable for:
Charges for business expenses which it fails to reimburse the Cardmember for; and
Charges incurred after the Cardmember leaves the employment of the company and before the company notifies us of this.

According to the agreement form for limited liability

I understand and agree that I will be liable for all charges I make
with the Corporate Card, except business expenses of the Company for which the Company
has not reimbursed me. The Company named in this application is also liable to American
Express Australia Limited for business expenses of the Company which it authorises me to
make and which the Company has not reimbursed me for.

That agreement reads to me that the individual is only liable for non-business expenses whilst the company is liable for business expenses which would seem to contradict their description

I forgot about there being a "joint and several" card too

Dave

 

[lovetravellingoz]

Well my company did not go bankrupt. BUT the accountant forgot to pay the Diners Club Account once.

Unfortunately for me when Diners then decided to stop the Diners Account I was , and I am Melbourne based, in Perth and was:

* hosting a breakfast at a Hotel for twenty odd people, which went I went to pay the bill found the DC declined

*as it was not the Hotel that I was actually staying at....the Hotel Staff would not take no for an answer and I had to get one of my "guests" to pay for me

* calls to head office were initially not answer as the office was vacant.

* by the time I had made a few calls to try and find out what had happened my guests had departed......and unfortunately as I did not have much cash left and no private CC on me (I now always travel with it as well!!!!) I could not pay fora taxi...and had a long walk across Perth CBD back to my Hotel.

* luckily there I could still chalk up expenses to my room..but I was starting to wonder how I would pay for my late afternoon check out!!! and taxi to the airport.

* after a couple of anxious hours the HO staff came back on deck with the account staff apologising profusely.

 

[thadocta]

Well my company did not go bankrupt. BUT the accountant forgot to pay the Diners Club Account once.

Unfortunately for me when Diners then decided to stop the Diners Account I was , and I am Melboune based, in Perth and was:

* hostinga breakfast ata Hotel for twenty odd people, which went I went to pay the bill found the DC declined

*as it was not the Hotel that I was actually staying at....the Hotel Staff would not take no for an anser and I had to get one of my "guests" to pay for me

* calls to head office were initially not answer as the office was vacant.

* by the time I had madea few calls to try and find out what had happened my guests had departed......and unfortunately as I did not have much cash left and no private CC on me (I now always travel with it as well!!!!) I could not pay fora taxi...and hada long walk across Perth CBD back to my Hotel.

* luckilly there I could still chalk up expenses to my room..but I was starting to wonder how I would pay for my late afternoon check out!!! and taxi to the airport.

* aftera couple of anxious hours the HO staff came back on deck with the account staff apologisng profusely.

* even

All I can say is........

OOPS!

Dave

 

[simongr]

At work we use the NAB Purchasing Cards.

I'm not sure who is ultimately liable, but I'd be worried if the government couldn't pay it's debts..

I note you dont live in NSW

Purchasing cards are the responsibility of the business.

I actually don't like having a Corporate Credit Card as I still have to do the same amount of admin as if I had a personal credit card - except I now have to carry two cards, split awards accounts (although that is working well at the moment as I have a -12000 point credit on my corporate card for refunded flights).

This does however make me think/rethink that. Also a slightly cynical/unpleasant side of is thinking that as a company it would be best to have individual liability cards/no corporate cards in case something happens as it would limit the overall debts of the company...

 

[Tooner]

Also a slightly cynical/unpleasant side of is thinking that as a company it would be best to have individual liability cards/no corporate cards in case something happens as it would limit the overall debts of the company...

Remembering also that a number of banks found out about the downside of having merchant facilities when Ansett fell-over.

Another side to your view Simon is that purchasing cards are often recommended to Finance as a way to "control" and monitor expenditure and manage cash flow better.

 

[anat0l]

All I can say is........

OOPS!

Dave

You say oops - I say THAT SUCKS! Looks like Head Office was also asleep at the switch.

Honestly, I hope your accountant either got quite a lashing after that, or at least tarred and feathered. Certainly your reputation amongst your clientele was severely damaged.

 

[lovetravellingoz]

You say oops - I say THAT SUCKS! Looks like Head Office was also asleep at the switch.

Honestly, I hope your accountant either got quite a lashing after that, or at least tarred and feathered. Certainly your reputation amongst your clientele was severely damaged.

Yes he most certainly did!!!!


He was wanting in a number of areas.....and a few months later he acted opun the suggestion that he would be better off elsewhere.

 

[simongr]

Another side to your view Simon is that purchasing cards are often recommended to Finance as a way to "control" and monitor expenditure and manage cash flow better.

I have never bought into that view of control (being an auditor - I spend my sad life looking at controls). If you have effective budgetary controls (review of performance against budget, accurate forecasting) then having some centrally controlled cards is pointless. Also by the time finance see the expenditure on the card it is already spent.

You can endeavour to control expenditure through credit limit caps - but then basically you are using a tool to control behaviour and it means that you effectively do not trust your people to remain within budgetary limits.

You can restrict where money is spent but that is useless for out of pocket business expenses such as lunches, hotels, flights etc - but then you have to build an administration framework which could cost more than the money you are trying to save.

My view is that you make managers accountable for the expenditure that they are approving, give them a budget and remunerate them based on performing against that budget - both positively and negatively.

In terms of monitoring there should be no difference between expenses charged to corporate cards and expenses reclaimed through out of pocket expense claims (which you have to have for things that can't be put on cards - overseas taxis, trains etc.).

If it wasn't clear - I really hate corporate credit cards

The main advantage that I see is that the company can control the cash management of this. If staff have to pay for things personally then they will make more frequent claims (submitting claims before credit card payments are due) - the solution to that is to have one monthly payments of expenses. Mind you if a company is relying on credit card spend to manage liquidity then there are greater underlying problems.

 

[Tooner]

I have never bought into that view of control (being an auditor - I spend my sad life looking at controls).

As someone who spends a large part of his sad life creating controls for auditors to look at....

The main advantage that I see is that the company can control the cash management of this. If staff have to pay for things personally then they will make more frequent claims (submitting claims before credit card payments are due) - the solution to that is to have one monthly payments of expenses. Mind you if a company is relying on credit card spend to manage liquidity then there are greater underlying problems.

Agree this is the main reason - I also don't buy the control thing. I often see these things all stated in an attempt to sell them to Treasurers, but the real liquidity issue is broader, and cards are just a part of the strategy...or should be:shock:

 

[bambbbam2]

Slightly OT, but I work in Finance for a State Govt Department and look after the purchasing cards.

We have a monthly direct debit from NAB for the balance of all our cards, so no worries about me missing the deadline.

We vary the limits staff get.. some only have $1k while others have up to $60k.

 

[medhead]

Slightly OT, but I work in Finance for a State Govt Department and look after the purchasing cards.

We have a monthly direct debit from NAB for the balance of all our cards, so no worries about me missing the deadline.

We vary the limits staff get.. some only have $1k while others have up to $60k.

With the greatest respsect to you as an individual. This sounds likely to be due the usual stupidity of Govt finance departments, that I've often experienced working for a state govt.

E.G. your boss tells you to go to a conference but you can't pay for it because it's over the limit on the CC. You can't pay for 2 single day registrations for the same person. But you can pay for 2 days registrations for 2 people because each registration is just under the limit but the total is 25% higher.

BTW the government can not go bust no matter what the real financial position is.