Best Practices for Corporate Credit Card Reconciliation: From Policies to Automation
Managing corporate credit cards can help simplify the handling of business expenses. They can help simplify the handling of business expenses while giving employees a bit of financial freedom. Still, without a proper system of reconciliation in place, corporate credit cards can become chaotic, unaccounted for, and improperly used. Keeping the financial management transparent and definite requires a comprehensive credit card reconciliation system. Policies guided automation, routines, and centralized systems, all will help simplify the processes and increase transparency.
1. Set Down Internal Usage Policies:
Reconciliation starts with credit card internal usage policies. Clear internal usage policies help employees understand the parameters around business expense and the limits for every documented transaction.
Cardholders must sign a terms of usage agreement, stating the policies are subject to change and can be taken away for any violations. Defining policies around travel expenses and specifying employee roles will help mitigate disputes.
2. Centralize Your Record Keeping:
One of the bigger headaches in credit card management is, when everyone sends receipts using a shared digital tool like our internal expense management system, they get matched to the correct transactions. This helps us to quickly finish the remaining work and helps auditors and the finance team to access the receipts. The finance team has the ability to monitor and control how much a team has spent in a week, spotting fraud or excessive spending in under a week. This helps strengthen the ability to control spending.
3. Use Automation to Save Time:
Reconciliation truly becomes a cumbersome and tedious task in the manual system, especially with a system that allows multiple corporate cards and numerous volume transactions. Use Automation to Import transactions, match receipts, and place holds on transactions that are disallowed.
Routine automation is true and it improves accounting work and saves time. It also helps to monitor spending. Generate reports to quickly see and understand spending in different time frames and activities.
4. Reconcile Regularly For Smooth Operations:
Everybody needs to understand that to make credit card reconciliation work the right way, it needs to happen continuously. Waiting to the end of the Month or quarter, it should collect receipts and work toward automation to reduce the workload in reconciliation. It helps to decrease problem when accounts automatic work toward reconciliation regularly.
Keeping a consistent schedule helps make sure cardholders are reminded about receipt submission and that the finance team keeps their books up to the date. The sooner the discrepancies are fixed, the easier they are to be corrected, is saving the company from potential fraud or duplicate payments.
5. Integrate People, Process, and Technology Together:
The best systems for reconciliation combine automation with human intervention. Automated systems and human compliance with internal control policies should allow leaders within the finance team to oversee automated systems, validate flagged unusual transactions, and reconcile competing reports. This method will help companies for cope to constant refinements based on audit result feedback.
A strong reconciliation strategy will help harmonize trust within the finance division and the entire organization. Clearly defined policies, integration of disparate data, use of automated systems, and periodic reconciliation will help reduce the risks which are involved in corporate credit card usage.
For practical tips about protecting your business finances, click here for related reading— how regular credit card reconciliation protects your company from fraud and mistakes.
