Without clear rules, corporate credit cards can introduce risk, confusion, and compliance issues into your business. Every organization that issues corporate cards should establish a formal credit card policy. A well-designed policy provides structure, protects the company from misuse and gives employees confidence in using their cards responsibly.
Why a Corporate Credit Card Policy Matters
Without guidelines, businesses face challenges such as:
- Unclear spending rules leading to unapproved purchases
- Difficulty in reconciliation when receipts and records are inconsistent
- Compliance issues with tax, audit, or donor/funding requirements
A strong policy makes expectations transparent, reduces administrative overhead, and integrates seamlessly with your expense management system.
1. Define Who is Eligible
Start by clarifying:
- Which roles or departments can request a corporate card. Limit to managers, frequent travelers or staff handling procurement.
- Approval processes for issuing new cards
- Circumstances when a card might be revoked
2. Set Spending Limits and Categories
Outline both per-transaction and monthly limits. Consider different limits for different roles (e.g., executives vs. field staff).
Specify categories of approved spend, such as:
- Travel (e.g., airfare, hotels, rental cars)
- Client entertainment (with limits per person)
- List prohibited expenses such as personal expenses, cryptocurrency, alcohol (if not related to business entertainment), or cash advances.
3. Require Documentation
Automating this process with receipt capture integrations like ExpensePoint, reduces errors and speeds reconciliation.
To keep records clean:
- All cardholders must submit receipts for every purchase above a certain threshold (e.g., $25).
- Receipts should be captured digitally and uploaded into the expense management system.
- Cardholders should tag expenses to the correct project, client, or cost center.
4. Clarify Approval and Reconciliation
Include instructions on how reconciliations will occur with accounting software like QuickBooks, Sage, or your ERP.
Define who reviews expenses:
- Direct managers for day-to-day spending
- Finance or accounting for policy compliance
- Timeline for approvals (e.g., expenses must be submitted within 10 business days)
5. Address Fraud, Misuse and Security
This section should strike a balance between trust and accountability.
Your policy should include:
- Guidelines for protecting card details (no sharing of cards, secure storage)
- What to do if a card is lost or stolen
- Consequences of policy violations, ranging from warnings to repayment and card revocation
6. Keep Compliance in Mind
Corporate cards impact tax reporting and audit readiness. Integrating with tax and banking systems makes compliance much easier.
Your policy should align with:
- IRS substantiation rules for business expenses
- Donor or grant requirements (for nonprofits)
- Internal audit processes for accountability
7. Communicate and Train
Policies only work if employees understand and follow them.
Once your policy is finalized:
- Distribute it to all employees with cards
- Provide short training sessions or quick-reference guides
- Reinforce expectations regularly (e.g., during onboarding or annual refreshers)
8. Review and Update Regularly
Business needs evolve, so revisit your corporate credit card policy annually. Update limits, categories, or processes as needed and communicate changes clearly.
A corporate credit card policy isn’t just about control, it’s about creating clarity, efficiency and accountability. By setting clear expectations, streamlining reconciliation, and leveraging technology for integrations and receipt capture, companies can make credit card management simpler for employees and finance teams alike.
FAQ
What should be included in a corporate credit card policy?
A corporate credit card policy should outline eligibility, spending limits, approved and prohibited expenses, receipt documentation requirements, approval workflows, security measures and consequences for misuse. It should also align with tax and audit compliance requirements.
How do you prevent misuse of corporate credit cards?
Misuse can be prevented through well-defined rules, spending limits, real-time expense tracking, mandatory receipt submission and regular audits. Integrating credit card data with expense management software also ensures transparency and faster reconciliation.
Should employees sign an agreement when issued a corporate credit card?
Yes. Having employees sign an acknowledgment of the policy reinforces accountability and ensures they understand their responsibilities, including what expenses are permitted and how to report transactions.
How often should a corporate credit card policy be reviewed?
It’s best practice to review the policy annually or whenever there are changes in business needs, tax regulations, or expense management systems to ensure it remains effective and compliant.
Request your ExpensePoint demo today and learn about our All-in-One Business Corporate Card from Swipe to Reconciliation.
