Should you stop using company credit cards?



Are you concerned about the amount of time spent by your accounts team reconciling the company credit cards used by employees? Perhaps you are considering no longer using company credit cards.  Let’s look at what you can do to resolve the issues before withdrawing them completely.



Often companies issue a company credit card to an employee to cover expenses such as travel, subsistence and entertaining. The company then settles these costs with the credit provider each month. The employee is then required to submit an expenses form with receipts to show what the transactions on the company credit card were for. This means that your accounts team spend significant time reconciling these figures.

However, there can also often be errors and omissions between what the employee submits and the costs that appear on the credit card. This may be personal costs on the credit card that need to be recouped from the staff member, or that the expenses submitted do not match the credit card expenses. Perhaps the staff member does not submit the form at all, meaning more wasted time chasing this information. It can be frustrating for your accounts team and also costly to the business.


How to improve the process?

Here are some steps you could consider taking to improve the process and reduce the overheads of providing company credit cards:

  • Ensure you have a clear credit card policy in place
  • Request accounts to highlight any repeat offenders so that their line manager can meet with them to resolve the issue and make sure they understand the impact of their actions.
  • Establish an escalation policy.
  • Introduce weekly expense submissions by credit card holders to reduce the instance of expenses not being submitted on time.
  • Ensure that the credit card statement dates fit with work patterns and amend them if they do not.


Withdrawing company credit cards

If, even after you have made all the efforts listed above your employee can still not be disciplined to follow the process, then you may have to consider removing their company credit card. Meaning they would then have to pay for their own expenses and reclaim them from the company each month. If this is a course of action you feel obliged to take, here are some tips:

  • Ensure that you have a clear expense reclaim policy, which also has a level of expense claim approval incorporated.
  • If expenses are claimed on or before the deadlines set in the policy, ensure that claims are always reimbursed on time without fail.
  • If the employee incurs significant sums monthly, then encourage them to reclaim their expenses weekly, instead of monthly.
  • In exceptional cases for big (legitimate) spenders you may want to consider giving them a standing advance so that their personal credit card limits are not exceeded.


Should you stop using company credit cards?

Before you stop using company credit cards altogether, consider whether you can better manage the use of these cards with a clear policy. You may also look to introduce escalating sanctions for staff who don’t follow it.

If after these efforts, you still feel that the best decision would be to move away from the use of company credit cards, then ensure that you have a robust expense reclaim policy set up and that all staff understand the process before switching to this method for all employee expenses.


Further information

If you found this information useful you may also want to check out the following:

MRA help individuals, businesses and families achieve the best quality of life they can with the resources they have. MRA specialise in corporate solutions, cash-flow analysis, taxation, debt management, savings and investments, life centred planning and much more.
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