Corporate Purchasing Card

Like all purchase orders/expense reports, implement safeguards to waste, abuse and fraud.

Make this policy a double-bind, on the purchase and then on the payment using different people to review, sign-off and actually cut the payment.

Edward,
I understand that many of these purchases will be for software subscriptions and other key recurring purchases. We recommend a control system for clients in small to medium businesses for one company paid card as follows:

- One individual is responsible for the purchase card and acts as the “Buyer” for the company for credit card purchases.
- That Buyer orders as needed on the card, accumulating receipts and filing in a separate file. We recommend a vinyl pouch if that person doesn’t have an organized filing system.
- When the monthly credit card bill arrives, the Buyer is responsible to attach all receipts to the bill and submit to accounting. Wherever there is a supporting receipt, the Buyer should check that item and note the department charged on the credit card bill. The Buyer should mark the recurring items, which do not have monthly receipts, by department. All items should be marked in some way so the analysis is complete.
- Depending on the dollar amount of purchases, you may want department head approvals for the total charges to each.
- Every few months, the Buyer should review these recurring items with each department head to make sure the purchases are still needed (pay special attention to items from departments with high turnover).
- Buyer retains a copy of the statement and receipts and sends the original as a voucher packet to AP for processing as a normal bill.

Additional:
All AP controls will stay in place as far as verification, approvals, etc.
Consider setting a lower limit on the card’s balance, so the risk of loss is reduced.
Set policies on what charges are appropriate for credit card payment.

I hope this helps.

You can set up a corporate purchase card program so that the right people have the right authority to purchase the right products and services. Permissions are set up my MCC codes, purchase cards also allow great efficiencies in getting journal entries posted, offer clear audit trails for transactions, and can offer rebates and better management of working capital. It has been a few years since I was directly involved in managing a purchase card program, but I would advise that you look into it further. This is a core treasury management issue, and the Association for Financial Professionals would be a great place to find resources. You can also post questions in Treasury Management LinkedIn groups to connect with fellow Finance Leaders who run purchase card programs.

We use USBANK Pcard program. They have various options such as 1) PCard only without travel and 2) ghost cards that can be used for specific purchases (this is good if someone leaves as the card is not assigned to a specific person, but AP or Purchasing usually handles these cards). USBANK offers a rebate program based on the amount spent on all Pcards for your company. They may have other options that I am not aware of as well.

We have had a p-card program in place for a few years with no issues. The banks all have systems designed with controls and a review process to ensure compliance with company policies. Like Ernie stated, it actually increases controls and streamlines the entire accounting process and eliminates procedures in AP. With enough spend, you also earn a rebate from the bank. All in all, I am a big proponent of the system. I recommend contacting two to three banks and find the partner that will work best for you and your needs.

Suggest that this may be done through the Purchasing organization. Buyers can be issued a card for MRO and indirect purchases, or can set-up as a ghost account for recurring spend by Purchasing or P Card administrator, depending on who administers program.

In any event, all monthly purchases per user statement and receipts should always be reviewed and approved by separate Manager.

I also have had experience with various P-Card programs. I highly recommend that there by a sign off before payment by the individual responsible for the card, their superior, and a review by someone in the controllers organization. Most of what I have experienced has been positive, but there are some risks of abuse. Lack of discipline on the three sign offs has usually been the reason.

Hi,
we also introduced a company credit card, linked to a person in finance.
Instruction had gone out that any INTERNET purchase this card had to be used and NOT someone's personal card or another corporate card usually linked to a sales person traveling a lot.
The person ordering something through Internet had to come to the finance dept with a per-approval in order to do the purchase. Finance would then have the necessary approval/proof/documents needed.
Make sure you have a back-up system in place.
If any 'strange' transactions went through the card it would be captured immediately and we could simply replace the card.

Reason for introducing this was, often the sales person card showed smaller amounts being debited on a monthly basis and they didn't remember or know what it was for.
Although we got the money back for the Credit card company the next month these amounts would re-appear, in the end we had to replace the card, causing a lot of hassle with the sales person.

Since then we have changed our system, giving the sales person a permanent advance on his expenses, forcing him to use a personal card with the promise to pay back his expenses maximum 1 week after he had presented his expenses. Advantage to this system is that it is in their best interest to present their expenses on a timely basis, it's controllable. Indeed in the past it took some sales persons months to present their expenses.....