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Corporate credit card reconciliation challenges

Here we’ll discuss what the typical reconciliation process is for corporate credit cards, the challenges that come with it, and how businesses can address this challenge by choosing a corporate card provider that suits the needs of their business.

It’s that time of the month again - time to reconcile those dreaded corporate credit card expenses. Although it tends to be a painful and challenging process for finance teams and staff members alike, having a corporate card makes sense for both businesses and their employees - it’s just a matter of finding the best way to do it. 

Here we’ll discuss what the typical reconciliation process is for corporate credit cards, the challenges that come with it, and how businesses can address this challenge by choosing a corporate card provider that suits the needs of their business.

What’s the typical corporate credit card reconciliation process?

At its core, reconciliation is a way for businesses to make sure the charges they receive on corporate cards match their internal finance records before they make any payments. It’s a necessary process that ensures that the amount of money leaving the account matches the amount spent in a fiscal period - and, of course, that no fraudulent activities slip through the cracks.

Typically the reconciliation process can be separated into three parts:

  1. Collecting and sorting receipts. Staff who hold corporate cards must account for the money spent by holding on to all receipts in case they are needed for future reference. That usually means filling out some kind of expense report form in a spreadsheet.

  2. Match expenses to transactions. Next, expenses on the credit card statement must be matched to reported business transactions. Finance teams may work directly with staff to achieve this (although that may be time-consuming, depending on how many staff members are using corporate cards), and sometimes use an online system to help.

  3. Address any errors with the bank. When fraudulent or unauthorised transactions are found, finance teams will notify the bank. Common transactions include refunds for cancelled purchases, charges for failed transactions, or duplicate charges. 

What challenges does this pose for finance teams?

The manual labour involved in reconciling expenses with a spreadsheet is inefficient and leaves room for human error. Businesses have started to address this by using software to automate parts of the process, providing a digital audit trail. 

However, the fact that credit cards are being used (as opposed to cash cards like Budgetly) means that there are still significant challenges being posed - the biggest culprits being:

  • Employees sharing cards (because of the barrier to entry in getting a credit card issued)
  • Inability to control and limit spending (beyond the monthly limit)
  • Lack of visibility into what is being spent and when (when you find out, it’s too late!)

For this reason corporate cash cards are becoming more popular for small-to-medium sized businesses, where finance teams are likely to be wearing multiple hats and are stretched for time.

Why a corporate cash card could be better for managing business expenses 

This is a relatively new option - using a platform like Budgetly, small businesses can issue preloaded corporate cards to staff. There are several benefits to choosing this option when compared with the previous two:

  • Increased financial security, as you aren’t borrowing money from the bank.
  • You can control and limit spending by applying rules to each card. 
  • There is no need to reimburse employees, reducing the amount of time spent on the manual tasks that are typically involved with this process.
  • It reduces the likelihood of employees sharing cards (a logistical nightmare for expense tracking and reporting). Because you can issue as many cards as you like, with as much or as little budget as you like, it is much easier to issue cards to staff members who need it.
  • You can manage and monitor cards from a central dashboard, meaning financial controllers can easily track where money is being spent, and by who - in real-time.

If you’re an Australian SME, a prepaid corporate card and expense management platform like Budgetly is probably the best option, because traditional cards are limited in terms of flexibility and control (and we’re not just being biased, there’s a reason that this solution was created, after all!).

If you’d like to learn more about Budgetly, download our eBook, Managing expenses with Budgetly. Or, if you’re interested in seeing how it works, feel free to schedule a demo.

Managing expenses with Budgetly eBook



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