Brex Toolkit | How To Build Your Corporate Card Expense Policy
As a business owner growing and scaling your newly incorporated or small business, establishing a corporate expense policy that can grow with you will pay off in the long term. Aside from setting financial expectations, a thoughtful expense policy can save you precious time by reducing the manual work of categorizing month-end expense reports, eliminating workforce friction and frustration around business credit cards, keeping your company IRS compliant, and offering cardholders a sense of ownership over their business expenses.
When you're first starting out, an expense policy on company card usage can be as simple as one-liner spending limit frameworks like “Spend as if it was your grandma’s money” or “Use an owner’s mentality.” But as you scale and expand your workforce, you’ll benefit from establishing infrastructure and visibility that streamline operations, letting you fulfill your mission rather than chase down employees.
As a part of our own mission to help growing companies reach their potential, we're sharing a comprehensive corporate card expense policy template to make it easier to scale T&E and procurement, and keep your business running smoothly and consistently behind the scenes. While the full template provides key considerations for creating and implementing your own, these are some high-level points to address in the process:
1. Corporate card program purpose and scope
Outline the purpose and scope of your corporate card expense policy. Decide who will be responsible for creating, authorizing, and enforcing the policy, at what cadence it will be reviewed, and by whom. Work with leadership to determine expense reimbursement and expense policies for personal use and company credit card use.
2. Roles and responsibilities
Outline the roles and responsibilities of employees, managers, and T&E team members, as well as the expectations for each party in terms of expense management. Decide who will be responsible for establishing budgets, issuing new cards, interacting with the credit card company, paying card bills, and setting credit limits on company cards, as well as submitting, monitoring, and validating transactions on card accounts.
3. Company credit card spending guidelines
Outline spending guidelines for employee expenses, travel expenses, vendors, events, office supplies, and employee travel on a personal, departmental, and company-wide level. Consider business travel airfare, events, ground transportation, entertainment, conferences, lodging, meals, parking, after-hours travel, and other expenses. Decide which expense categories should be expensed on personal, corporate, and departmental cards, and where the line between business and personal expenses exists.
4. Cardholder expense guidelines
Establish expense thresholds, and determine which documentation will be required for expense reporting at each level. Consider budget allocation, card issuance, approval processes, and purchase order processes, as well as pairing card statements with business purpose memos and receipts.
5. Corporate credit card policy compliance
Determine which charges will fall under your corporate credit card policy, as well as the penalty for out-of-compliance expenditures. Decide who will be responsible for determining that penalty, at which cadence will they review card spend, and against which thresholds compliance and penalty will be determined. Consider whether and how the reviewing party will be notified of out-of-policy spend, and what the appropriate timeline for disciplinary action will be.
Small business credit cards can do wonders for a growing company, but it's important to lay the proper foundation. The right corporate card policy can save your business time and money by making sure employees adhere to the same standards and expectations across the company. Along with increasing annual revenue and cash flow, offering readily available resources and a consistent expense lifecycle provides your workforce with the transparency necessary to do their jobs. Access the full expense policy template to begin building an employee resource that'll help your company grow. We’ve designed this template with Brex and its expense management features in mind, but it can be used across other credit card issuers like American Express and Chase, as well.
As you build your business, we’re here to help you every step of the way.