What is a Company Credit Card Policy and Why Do You Need One?

In the current climate, company cards are being used for things they’ve never been used for before. After all, when everyone was office-based, there was no need to buy a desk, a chair or printer paper on the company card – let alone broadband subscriptions and travel insurance.

That’s all changed now.

Why Do You Need a Company Credit Card Policy?

The changing nature of expenses means that more and more businesses are introducing company card policies to make sure their cards continue to be used for legitimate business purchases.

A company or corporate credit card policy is the equivalent of your travel and expense policy. It sets out the guidelines for use, the responsibilities of the card holder, including the dos and don’ts and what happens if a card is misused. This helps to ensure your business finances are authorised and regulated.

Sample Employee Business Expense Policy

5 minutes is all it takes to generate a custom template for your business. Get started now.

Get your template

What Should a Company Credit Card Policy Contain?

Your company credit card policy will have a number of sections covering various aspects of their use. The following sections are standard and there may be other specific sections you’ll need to include for your own particular circumstances.

Employee Credit Card Agreement: When you issue a company credit card to an employee, they will need to sign a credit card agreement to say they agree that the card belongs to the business. It should also state that you hold the right to investigate any charges on it and you are able to take the card off them if there are any violations.

Who Can Hold a Company Credit Card? Include a section on the job roles eligible to have a company credit card to protect you against accusations of favouritism or discrimination. 

What Expenses are Allowed on the Company Credit Card? In the same way as your expense policy outlines what expenses are allowed and not allowed, your credit card policy should do the same. You should make it clear that company credit cards are to be used for work-related expenses only. You may like to give examples of appropriate spend categories and you should state if any purchases are strictly prohibited. For example, can employees use credit cards for foreign transactions?

Exceptions: Occasionally, an employee may have an expense that is not typically allowed under the policy. Your policy should outline how they can get permission (or not) for the spend.

Company Credit Card Spend Limits: It is usual to set limits depending on the job role and seniority. Set these out in your policy so the limits are known by everyone who has a card.

Employee Responsibilities: Employee responsibilities might include:

• Taking care of the company card in the same way they’d take care of their own credit card.
• Reporting it as lost or stolen as soon as they notice.
• Using it only for work-related expenses.
• Submitting receipts for all purchases so they can be reconciled against their credit card statements. You might like to refer them to your expenses policy for details on when and how to submit expenses or you could include the details in the credit card policy.

Policy Violations: Your credit card policy should cover what happens if an employee violates the policy in any way. This might range from relatively minor infringements such as losing a receipt to major transgressions such as making a prohibited purchase.

Integrating Your Credit Cards with Your Expense Process

If you are automating – or have automated – your expense process, you can see significant gains in visibility and control from integrating your credit cards with your expense system.

Claims are compiled automatically so there’s much less time-consuming data entry and risk of errors. The reconciliation of credit card spend is made easier as credit card transactions are automatically imported and categorised in your expense system. That makes it faster and more convenient for employees to create and submit claims from credit card spend.

You also get more detail than when claims are manually compiled, so you’re able to maximise tax reclaim opportunities – critical for small businesses looking to protect income in the current climate. You get sight of business spending much earlier in the process too, so it’s easier to manage cash flow. And this early visibility means you can use the credit limit as a cash float to further aid cash flow.

Best-in-class systems partner with many of the leading credit card suppliers, which makes integration easy – the SAP Concur platform, for example, integrates with nearly 40 of the UK’s credit card providers.

The Value of a Company Credit Card Policy

Like so many businesses, you’re probably keeping a closer eye than ever on discretionary spend at the moment. A company card policy keeps checks on spend, supports compliance and minimises the risk of employee fraud. And by integrating it with your expense process you can see even more gains.
 

Take a look at our eBook to find out more about How to Detect and Stop Fraud, Waste, and Misuse in Employee Expenses.

Speak to a member of our team if you’d like more advice on how to easily integrate and streamline credit card transactions with your expense process, on +44 (0)330 912 1181 or contact us via the website.