Understanding the Benefits of Corporate Card Reconciliation
Over the last few years, businesses have started adopting corporate cards programs to make reconciliation easy. Corporate card programs monitor T & E spending to ensure every expense is reconciled in compliance with company policies. Corporate card reconciliation programs help finance department monitor, control and reconcile expenses and make the expense reporting process easy for employees.
Corporate card programs benefits and challenges
While the corporate cards are there for a while, businesses started adapting to those recently. Some of the key reasons to adapt to these programs are as follows:
- Eliminate paper-based processes
- Integrate spend data with the accounting system
- Monitor policy compliance
- Negotiate vendor discounts
The IRS has set-up some guidelines around audit requirements for T & E expense to which a business should comply:
- Receipts are mandatory for business transactions above $75
- Record all the transactions
- Report business transactions within 60 days
While corporate card programs help companies tackle a plethora of challenges, it also comes with new challenges. Companies have to deal with various scenarios such as:
Employees make personal expenses on corporate cards – Admin should understand this and account for this.
Missed receipts –Employees don’t take it seriously about holding receipts when spending.
Organizations have multiple card programs for various offices – and the data needs to be pulled and managed under one roof. Normally, more than one employee uses the same card for corporate expenses, which brings inconsistencies in T & E reporting and analytics.
These operational inefficiencies make the finance department lost between transactions and receipts. The impact will be seen in reconciliation, which gets translated into poor compliance. While some problems can’t be corrected by software, a lot of them can be handled with the right software with the right features.
Reconciling corporate card transactions involve:
Recording all card transactions including date, merchant, amount and the employee:
- Assigning transactions to employees
- Matching transactions with expense receipts
- Handling policy violations on card transactions
- Processing corporate card payments
Receiving Transaction Records
Expense report solution allows organizations to get corporate card transactions in two ways:
Corporate Card Feeds
Direct feeds can be obtained from corporate cards providers – American Express, Visa, Mastercard and more without any third-party integration. The feeds are directly pushed to the expense solution for payment processing.
Manual Statement Upload
If direct feeds can’t be configured, you can directly enter the expenses into reporting solution. Configure the entries with the form fields and the next time you do this, all the expenses can be imported into the application directly.The automated solution should enable you to manage expenses across multiple banks, or card programs.
Once transactions are recorded in the expense software, one can easily assign transactions to employees. This is required for accounting employee-wise spend and reconciliation. The solution allows you to assign a card to a user or to select specific transactions and assign to particular employees. If the transaction is incorrectly assigned, administrators can re-assign the transactions to other employees.
Matching Receipts with Transactions
Transactions need to be supported with a receipt and the context. While other details such as payment mode, merchant, amount and date are pulled from bank for accuracy. Besides these, there are other features that make receipt management easier:
Expense entry is made before the transaction in imported
When transactions are imported, our expense report software suggests possible matches in card transactions for the expense entries.
Transactions are imported prior to the expense or receipt entry. Admins will assign the transaction to the employee and the employee will be notified by the solution to add receipts with other expense entries to support the transactions.
Policy violations can be automatically detected and processed by expense software and highlighted to the administrator. Administrators can define business rules to accept, reject or change expense claims as per the company policies.
Processing Corporate Card Payments
Corporate card transactions are directly taken from the company’s credit card account, so the expenses are to be matched with receipts for audit and compliance. However, administrators can see different transactions such as personal expenses, and reversed transactions on corporate cards. If the transaction is marked as reversed, users are required to point towards the reversed transaction entry. These kind of transactions should be supported with receipts and expense entries. If the transaction is marked as personal, the amount will be considered as advance disbursement and the amount gets deducted from the employee’s payroll. All the approved records will be transferred to the accounting software for processing payments.
As corporate card programs getting popular and business expenses are increasing, choosing SutiExpense incorporating all the features can help you support the organization’s expense management process.