Bruce Telecom CEO explains company's use of VISA card
By Liz Dadson

 

Internet & Technology

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Bruce Telecom's need for a company VISA card with a credit limit of $500,000 has been explained through a report by president and chief executive officer (CEO) Michael Andrews.

At the April 15 Kincardine council meeting, Bruce Telecom board chairman, Richard Martin, asked that the question about the VISA card be deferred until the board can make a recommendation to council later this month.

Council raised the question at its April 1 meeting when it was asked to authorize a line of credit and overdraft protection for Bruce Telecom. There was concern that the company also has a VISA card with a $500,000 limit.

In his report, Andrews states that the total available credit on the VISA account is $450,000 but that limit varies with the level and the role of each of the cardholders. For staff and directors, it's $5,000; managers and vice-presidents, $10,000-$15,000; for the CEO, chief financial officer, manager of accounting services and purchasing agent, $20,000.

The card is basically used when staff are working off-site, reports Andrews. For example, if a technician is sent to the Owen Sound location on a repair call and requires a simple computer cable, battery, printer cartridge, etc., to repair a problem, he is able to purchase it at a local vendor rather than drive an hour back to Tiverton for the part.

The company also uses VISA to streamline the import process by payment of taxes on brokerage fees on imported goods, such as modems, set top boxes and network components only available outside Canada. This also provides administrative savings, states Andrews.

In 2008, typical monthly balances for the VISA account ranged between $5,000 and $15,000. Only three times during the year did the balance exceed $15,000 and it has never exceeded $20,000, Andrews reports.

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20/04/2009 10:30 PM

 Bruce Telecom has a credit card for each full-time employee, each manager, and each member of the board of directors, states Andrews in the report, and these are all strictly controlled.

There are credit cards in the name of 56 staff members, plus five directors with $5,000 limits each, for a total of $305,000, reports Andrews. There are also three middle managers with $10,000 each, for an additional $30,000. There are three vice-presidents and one senior manager with $15,000 limits, for a total of $60,000. And the four senior staff have $20,000 limites, for a total of $80,000. Bruce Telecom's total VISA credit available from the bank's perspective is, therefore, $475,000.

"Every credit card is kept in high security under the control of the manager of finance," Andrews added. "The cards are released to employees and directors only when they are attending out-of-town training or conferences or under other special circumstances. All users of credit cards are required to maintain a detailed log of purchases, retain receipts and submit both when statements are issued by the Royal Bank. Every person's expenses are reviewed and approved by his/her manager prior to process and the CEO's are reviewed and authorized by the chairman of the board."

Andrews explained that, "Having the card and purchase in the actual user's name provides the company with better tracking and oversight of travel and training expenditures and increases the controls of such expenses,"
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