Brex Guide: How To Build Your Corporate Card Expense Policy
As a business owner or finance professional scaling your business, establishing a corporate card expense policy that can grow with your company can be one of the most important things you’ll ever do.
Aside from setting financial expectations, a thoughtful expense policy can help you save a lot of time, money, and hassle by:
- Reducing the manual work of categorizing month-end expense reports
- Reducing 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 for how employees use your company card can be as simple as, “Spend as if it was your own money,” but, as you scale and expand your workforce, you’ll need a framework that helps you streamline operations, letting you focus on growing your business rather than chasing down employees for receipts.
As a part of our mission to help growing companies reach their potential, we're sharing a comprehensive corporate card expense policy template to make it easier to scale Travel & Expense (T&E) and procurement, and help keep your business running smoothly and consistently behind the scenes.
Our full template provides key guidelines for creating and implementing your own policy from start-to-finish, but below are some broad steps to address in the process. Remember that after finishing work with our template, you’ll also want to consult a professional with your business before finalizing your policy.
1. Determine your corporate card program’s purpose and scope
First, 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 who. Work with leadership to determine expense reimbursement and expense policies for personal, departmental, and corporate credit card use.
2. Define roles and responsibilities
Once you’ve determined the purpose and scope of your policy, you’ll want to 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 submission, review, and approval. 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. Outline company credit card spending guidelines
From there, 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, client meetings, 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. Employees who are given access to have set up an expense policy with Brex can easily view the guidelines in the Brex app, and will be notified when they are out of policy.
4. Create cardholder expense guidelines
The next order of business is to establish expense thresholds, and determine which documentation (receipts, memos) will be required for expense reporting at each level. Consider budget allocation, card issuance, approval and purchase order processes, as well as pairing card statements with business purpose memos and receipts. Employees who have a Brex corporate card, for example, can text a picture of their receipt or upload it into the app, and Brex will auto-match it to the corresponding expense.
5. Determine corporate credit card policy compliance
Lastly, 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 they will 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. With Brex, certain employees can be notified of each out-of-policy transaction, and easily review and respond to these transactions in a dedicated area in the Brex app.
As your company scales, it's important to lay the proper foundation. The right corporate card and built-in expense policy can save your business time and money by making sure it’s easy for employees to 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 life cycle 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 control spend without slowing down. We’ve designed this template with Brex and its expense management features in mind, but it can be used across other credit card issuers.
As you grow your business, we’re here to help you every step of the way.