How to create a corporate card policy

Every company must develop its own procedures and processes for creating a corporate card policy, just as it does for all of its other policies. But some common considerations are key when forming a corporate card policy. For example:

Who is eligible for a corporate card? This may be the first and most important question to ask when creating a corporate credit card policy. It’s unlikely that every employee will need a corporate card, so define likely candidates based on their job role, level of seniority and travel needs.

What are acceptable uses for the card? Formulating a clear definition of acceptable expense types is key to preventing misuse. Designate which types of travel, lodging, food and drink, and other charges are acceptable business expenses and which are not. In particular, specify the spend categories that will be approved only if they are made through the corporate card, such as airline reservations, as well as categories for which the card may never be used, such as gambling. You may wish to include a list of preferred merchants for each spend category—for example, a preferred vendor for stationery and office supplies. Enforcing acceptable spend categories can also discourage card use at unapproved merchants, helping to prevent unauthorized use.

It may be helpful to publish a set of frequently asked questions and to issue it to eligible employees along with their cards. Possible questions might be: 

• Can I use my corporate card to purchase groceries while traveling on business?
• I accidentally used my corporate card for a personal expense. What do I do now?
• Do I need to keep receipts for every business expense?
• Can I use a personal credit card for business travel to gain perks, then submit the expenses for reimbursement?

What are acceptable spending limits? Companies may set specific spending limits for each cardholder, depending on multiple factors, such as role, rank and travel profile. There may be restrictions on whether cardholders can use cards outside of business trips—for example, to purchase subscriptions to work-related publications—or specific limits on different expense categories. Such categories might include non-travel work expenses like office supplies and equipment for remote employees, as well as client-related expenses, such as meals and entertainment.

Companies often choose to implement these strategies by using corporate credit card expense management offerings. These platforms enable program managers to set and monitor spend limits on the program level, thus promoting policy adherence and encouraging greater spend transparency.

What documentation is required for expenses? Corporate cardholders should require documentation of every expense. However, employers may make concessions to lighten the administrative burden on employees. For example, companies may arrange for certain vendors, such as large hotels, car rental companies and rideshare services, to submit electronic receipts directly to the card issuer or an expense-tracking platform. Other expenses that may require no more than an employee declaration could be tips, mileage and per-diem costs. In all cases, the business expense documentation policy must align with applicable tax authority requirements.

How should receipts be kept? Your corporate credit card policy should also specify acceptable formats for expense receipts—these should also be consistent with tax authority requirements. In the U.S., the IRS accepts scanned copies of original paper receipts as long as they are legible.

What are the approval rules and hierarchy? As in any company expense policy, your corporate card policy should include clear multilevel hierarchies for card spend approval and reimbursement, as well as approval rules based on the cardholder’s role in the organization. Hierarchies should define spend approval roles and responsibilities for every level of management, potentially up to the CFO.

What are the cardholder’s responsibilities? Although some cardholder responsibilities may seem like common sense, your policy should clearly spell them out. Apart from the considerations outlined above, you may wish to specify:

• The need to keep the physical card safe and promptly report loss or theft
• Clear definitions of recordkeeping and documentation expectations
• Detailed processes for reporting fraud and resolving disputes
• Consequences for noncompliance

_{JPMorgan Chase Bank, N.A. Member FDIC. Visit jpmorgan.com/commercial-banking/legal-disclaimer for disclosures and disclaimers related to this content.}