Checklist: Create Card Usage Guidelines to Rein in Expenses

A well-crafted corporate credit card program can improve cost controls and give employees a fast and flexible payment tool. Providing clear use guidelines from the start will help you quickly unlock those benefits and streamline expense tracking.

Business people discussing file

Use this checklist to develop sound policies and documents that set the foundation of a robust card usage program.

1. Draft a formal cardholder agreement. This document should be signed by all employees when they are given corporate cards, providing an official record that they have read and accept the rules. The agreement should include these points:

  • References to spending rules. State that employees can use the card only for allowed business expenses, as defined by your spending and travel guidelines. 
  • Method for handling unauthorized expenditures. When employees misuse a corporate card, they often do so in error, so establish a clear way for them to correct the mistake and repay those expenses. Consult with your legal team to make sure your plan is legal within your state, especially if you plan to deduct reimbursements from an employee’s pay. For example, you may need to break payments into multiple, smaller deductions so the employee’s compensation doesn’t fall below minimum wage for a pay period. 
  • Who gets cash rebates, points and other perks. Clarify whether all rebates or travel points revert to the company or whether your program allows for individual rewards redeemers. If employees can participate in rewards programs, spell out how they would receive those perks.

2. Define appropriate spending guidelines. Make it clear what is and is not an acceptable expense in a written policy that can be updated as needed. Cover both of the following areas: 

  • Day-to-day spending. Provide specific examples of what expenses employees may put on the company card, along with non-allowable transactions such as personal expenses. For instance, you might set dollar limits on client meals or parameters for approved tiers of express delivery services. Build in flexibility by allowing supervisors to sign off on exceptions.
  • Travel expenses. Establish guidelines on spending for hotels, flights and other travel expenses that everyone, from company founder on down, should follow. Pay attention to gray areas — for example, let employees know if hotel dry cleaning won’t be reimbursed. If you expect employees to make an effort to take public transportation rather than Uber or a taxi, say so. 

3. Clearly explain expense-reporting requirements. Doing this will save you — and your finance staff — headaches with both card statement reconciliations and tax reporting. Be sure to describe the following:

  • Categorization rules. You’ve likely set up your reporting to organize charges into common expense lines or categories, so list the ones employees must use, along with examples. Employees often make errors in assigning expense types if definitions aren’t crystal clear.
  • Supporting material. List the documentation employees must supply, such as receipts, invoices, and proof of delivery or boarding passes. Your accounting department can tell you what’s necessary to satisfy tax requirements. Be sure to explain how those materials should be submitted. Most companies use expense-filing software or create a standardized template that asks for date, expense amount and other information depending on the expense category. 
  • Filing deadlines. Set a deadline for filing that allows your finance department to promptly reconcile card statements with expense reports — if not when the statements are first received, then within the month afterward. Many companies find it works well to require spending reports from cardholders at month’s end and travel reports within two weeks of a trip.

As you craft your policy, balance your need for information with a program that does not overly burden busy employees. Have your legal team review your card usage policy before you distribute it to ensure that it’s comprehensive and complies with applicable laws. This effort will result in greater flexibility for your staff, and improved expense control and better spending data for your finance office.

Learn more about SVB’s Commercial Card program, or contact your SVB Global Treasury and Payments Advisor to get started. 

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Read more in our series about how to optimize your company's payments tools and processes on SVB's Payments Trends & Insights page.


The views expressed in this column are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. You should obtain relevant and specific professional advice before making any investment or other decision. Silicon Valley Bank is not responsible for any cost, claim or loss associated with your use of this material.

About the Author

Robert O’Connor is a Senior Advisor with Silicon Valley Bank’s Global Cash Management team. In this role, he focuses on developing credit card and payments solutions for clients.

Prior to joining Silicon Valley Bank, Robert was Vice President of U.S. Commercial Product Sales at MasterCard Worldwide. During his seven years with MasterCard, Robert worked with many U.S. commercial card issuers on developing their commercial card strategies. Robert’s previous experience includes various business development roles with U.S. Bank’s Corporate Payment Solutions and Merrill Lynch.