Corporate card optimization strategies to avoid year-end audit challenges

As early-stage companies reach Series A growth milestones, it becomes more critical to scale up spending controls. Particularly when it’s time for a year-end financial audit, annual corporate card optimization helps reduce work and complexity.

Q4 is a critical time to optimize corporate card management. It helps reduce audit risk and sets the stage for better cash flow management in the year ahead. Your year-end card program audit should review cardholder criteria, expense policies and spending limits. This optimization ensures your card program keeps pace with your growth and provides audit-ready expense management.

What are the most common audit challenges and how can you avoid them? Let’s review strategies and practical tips for corporate card optimization.

Be prepared with sufficient documentation

Fast-paced innovation companies often lack formalized systems for capturing and organizing receipts, invoices, purchase justifications, and expense codes. But you’ll need all that information to substantiate all your corporate card transactions during year-end financial audits. Without complete documentation, legitimate expenses might be flagged and disallowed as business deductions, which could impact your taxes. It could also trigger additional scrutiny from investors and regulators.

To avoid these pitfalls, I always advise clients to integrate their corporate card program with a robust spend management system. It enables you to automate reporting to save time and capture more complete data upfront, while reducing manual work and errors downstream.

With automated mobile expense reporting, employees can easily submit purchase details with embedded expense codes, and attach digital receipts as spend occurs. And your finance team gains a real-time stream of richer card data that can automatically sync with your accounting software or ERP (via API integration). This tech-driven strategy helps ensure your business has the right documentation in place to justify all your corporate card spending.

Implement corporate card controls and approval flows

Many innovation economy companies quickly outgrow their initial ways of managing spend. What started as founder-controlled finance no longer makes sense as departments and teams evolve. Yet updating financial controls often sits on the back burner – and that introduces risk. When card spending scales up with too little oversight and accountability, it becomes harder to manage cash flow and ensure compliant audit trails.

Corporate card optimization should include implementing customized controls and automated approval flows. With SVB’s platform, for example, clients can:

• Instantly issue cards customized for any user or use case with preset budgets, embedded expense codes and more.
• Define and automate approval rules and routing to document purchase authorizations, including exceptions.
• Gain real-time visibility over all card spend, and complete data accurately stored in their spend management and accounting systems. 

These corporate card controls free up your finance team from tedious manual oversight, and enables your company to maintain continuous audit readiness .

Update and auto-enforce spend policies

Companies with lean teams rarely have dedicated resources for spending compliance and risk management. Card policies might exist on paper but are often not followed consistently or enforced. But that’s an audit trap. It’s not enough to show that expense policies exist; auditors want proof that policies are being followed.

For venture-funded firms that have to answer to investors, it’s crucial to avoid red flags in your spending patterns during due diligence reviews and board reporting. Companies need systematic controls to promote and enforce policies across all cardholders. But don’t worry, it’s easier than you think.

I advise clients that one of the best corporate card optimization strategies is automating spend policy enforcement through your expense management platform:

• Create rules that align with operational needs and update 1-2x a year to best support growth.
• Auto-enforce policies with alerts to cardholders that restrict purchases if the vendor, category or amount is out-of-policy.
• Ensure compliant reporting with policy alerts built into automated expense reporting, so staff submits required purchase details and receipts. 

Being prepared for smooth year-end audits demonstrates savvy corporate card management. Having year-round controls for card distribution, spending limits and expense policy enforcement helps you boost efficiency and better manage cash flow.

Learn the power of card program optimization with SVB corporate cards with AI-driven spend management.

Frequently asked questions

How does expense automation help with corporate card optimization?

Automated expense reporting helps optimize a corporate card program by capturing more complete and accurate transaction data. AI-powered spend management platforms (like SVB) automate reporting and reconciliation to ensure real-time visibility and reduce manual work and errors. Optimized processes help companies manage card spend cost-efficiently and have the right documentation for year-end finance audits.

What card controls do we need for easier year-end audits?

To be audit-ready, corporate card spending should be consistently controlled, monitored and documented. Card program optimization should include spend management controls based on cardholder roles, spending limits and categories, as well as the ability to auto-enforce expense policies. You should also define and automate approval routing, so purchase justifications and authorizations are documented, including exceptions.

How do you automatically enforce corporate card spending policies?

Having a corporate card program integrated with a robust spend management platform gives companies a rule-based system to customize and auto-enforce spend policies. As cardholders attempt transactions, the system can push alerts to restrict purchases if the vendor, category or amount is out-of-policy. Alerts can also notify users within automated mobile expense reporting to ensure they submit required purchase details and receipts. These policy controls help companies prevent non-compliant spending and demonstrate effective financial oversight to satisfy auditors.

What documentation do auditors require for corporate card transactions?

Financial auditors require documentation that substantiates all your corporate card transactions during the year, including receipts, invoices, purchase justifications, and expense codes. This documentation helps clarify card spend as legitimate expenses that can be used as business deductions on your taxes.