Best Practices for Writing Your Corporate Credit Card Policy

Originally published in Payments Journal on May 2, 2019 by Faheem Rahman.

The benefits of using a corporate card are hard to ignore. With a corporate card program, organizations gain better control of their spending, reduce fraud, and process expenses more easily. And, of course, there’s the most visible benefit — the cash rebate on purchases. But how to manage company corporate cards can become a time-consuming headache if your team doesn’t use them appropriately. That’s why it is a best practice to create a straightforward, clearly written and easy-to-follow corporate card policy manual.


How to Write a Company Credit Card Policy

Effective corporate card manuals start with sound preparation. The contents of the corporate card policy manual will naturally differ from company to company, but they should reflect careful upfront thought and conversation about your organization’s goals for your card program. For instance, if an important goal is trying to estimate your return on investment for particular categories of expenses, you should develop policies for those specific categories. Your goals will also help you determine which employees should receive cards. If your objective is to better manage your sales force’s expenses, you do not have to issue cards to managers in your home office. These decisions do not need to be spelled out in your manual — but the manual should reflect them.

Regardless of their purpose, corporate card policy manuals tend to cover a series of common topics:


  • Cardholder Responsibilities

  • Limits on Spending

  • Exceptions

  • Expense Reporting



Cardholder Responsibilities

  • Most manuals begin by laying out the responsibilities of cardholders. Perhaps the most important statement in any corporate card policy manual is that cards cannot be used for personal expenses.

  • Cardholders should also be reminded that only the person whose name is on the card is allowed to use it and that they are responsible for its security. This entails safeguarding their PIN and storing the card in a safe place. In case of theft or loss, they should also know whom to notify.


Limits on Spending

  • Each corporate card should have a spending limit determined by the holder’s responsibilities and level of authority, and these limits should be spelled out in the policy manual. A person in sales, for instance, might have a higher limit than a person in project management. Similarly, the vice president of sales might be permitted to spend more than a sales manager.

  • These spending limits might be specified on a per item as well as on a cumulative basis. For instance, a cardholder might be limited to spending no more than $150 on a client dinner and no more than $750 on client dinners a month.

  • Card policy manuals should also indicate under what circumstances approvals are necessary. For instance, employees at some companies can only book travel with their cards after their trip has been preapproved.



Oftentimes, manuals will list purchases that cannot be put on a corporate card. For instance, they may specify that traveling employees cannot book suites, just basic hotel rooms. Or that employees cannot make bulk alcohol purchases unless they are event planners. In addition, corporate card policies often include blanket prohibitions on such items as weapons, prescription drugs, and adult entertainment. Most also forbid cash advances. Card issuers can set up controls to block these transactions.

However, corporate card managers should recognize that the unexpected always happens and the process for managing the unexpected should be outlined in the credit card policy manual.

  • Manuals should also spell out a procedure that employees can follow if they find themselves in an emergency where unauthorized use of their corporate card is their only option.

  • By making allowances for the unexpected, card managers can review these requests as a way to measure the appropriateness of their spending limits and update corporate card policies accordingly. For instance, if they receive repeated requests for exceptions on car rentals, they might reexamine their car rental limits to determine if they are reasonable.


Expense Reporting

For IRS tax purposes, all business expenses over $75, whether they are made with a corporate card or not, must be documented, but organizations trying to monitor their cash flow often hold employees to a higher standard, for instance requiring documentation for expenses starting at $25.

The policy manual should spell out the information employees must provide about their purchases — for instance, amount, date, vendor, and purpose — as well as the kinds of documentation they can use to justify them, whether a boarding pass, delivery confirmation, or receipt. The policy manual should also include guidelines on reporting expenses paid with cash rather than card such as tips.

Corporate card manuals should indicate the procedures employees should follow when submitting their expense reports. In this context, it is worthwhile to stress that organizations that make expense reporting as frictionless as possible, achieve higher compliance. This is the reason that some card issuers are developing apps for travel expenses that, among other features, will give users the ability to easily scan their receipts from their mobile phone.


Make it Easy: Designing Your Corporate Card Policy Manual to Encourage Compliance

Compiling a set of corporate card policy guidelines is the first step in creating an effective compliance manual. Translating those guidelines into a form that your employees will embrace is the equally important second step. A common error that corporate card managers make is producing an unreadable manual. In their zeal to be helpful — to account for every possible situation that employees might encounter — managers often produce weighty volumes — 30 pages or more in length — clogged with minutia. The result: employees with the best of intentions inadvertently use their cards improperly because the guidance they need is buried under extraneous detail.

At Capital One, our approach is just the opposite. In our own corporate card policy manual, we cover just the basics using clear, easy-to-understand language. Our message to our employees: we trust you to use your best judgement.

In fact, striking that tone of trust and respect in your manual is a key contributor to the effectiveness of your corporate card program. While it is undoubtedly true that one of the goals of corporate card policies is to help organizations detect waste, fraud, and abuse, it is counterproductive to take a punitive tone. The vast majority of your employees are good actors. They want to do the right thing, and your manual should acknowledge that from the very start. Let them know that you trust them to spend the organization’s funds appropriately even as you set out clear expectations and responsibilities. In effect, by enlisting your employees as partners in a shared enterprise, you empower them to actively take ownership of your corporate card program’s success.

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