Company Credit Card Policy: Best Practices & Template

A company credit card policy serves several important purposes for your business. It helps you manage expenses, prevent misuse, and maintain financial control within your organization.

Without a strong policy, your business is more likely to experience uncontrolled spending. It will also be more susceptible to fraud and difficulties reconciling expenses.

In this article, we discuss best practices for creating your credit card policy. We also provide a template you can use as a starting point for your document.

Key Takeaways

1. If your business issues credit cards to employees, you need a company credit card policy.
2. To create a company credit card policy, first determine who gets to carry a card. Then, establish spending limits and set allowable and prohibited expenses. Next, define an approval process for all employees.
3. Other best practices include creating an expense reporting policy and setting up cardholder responsibilities. It’s also a good idea to list the consequences of violating the policy and then make the information available to all employees.

Company Credit Card Policy Best Practices

Determine Who Gets Access To A Company Credit Card

Not everyone in your business needs to have access to a company credit card. Include a section in your policy that outlines how you will determine who gets issued a card.

Establish Spending Limits

One of the best things you can do in your company credit card policy is establish spending limits. This may include limits by merchant, category, and/or dollar amount. Or, you may choose to limit spending by location, time of day, or even vehicle tank size.

Regardless of the limits you set, be sure to specify that employees must turn in a receipt and include a job code or a reason for every transaction.

Describe Allowable And Prohibited Expenses

Don’t give your employees a credit card and expect them to know what they can and can’t buy. Instead, list allowable and prohibited expenses in your company credit card policy so it’s as clear as possible to everyone on your team.

Define An Approval Process

If your business has an expense reimbursement policy, set up an approval process. Include things like how to keep and turn in receipts and how to add a job code to each transaction. You may also instruct employees to explain the purpose of the purchase.

If your business uses a corporate card, business credit card, or p-card, you can do away with reimbursable expenses altogether. This makes the process easier for everyone involved.

Create Expense Reporting Guidelines

Even if you don’t reimburse expenses, include some type of expense reporting procedure in your company credit card policy. This usually involves employees turning in itemized receipts for your records.

With some smart cards, employees can submit their receipts on their phones right at the point of sale. This can help cut end-of-the-month expense reports altogether.

Set Up Cardholder Responsibilities

Create a section in your policy that outlines cardholder responsibilities. Include things like keeping credit card information confidential and reporting lost or stolen cards right away.

You may also want to make it clear that the cardholder is accountable for any charges made on a lost or stolen card.

State The Consequences For Policy Violation

In addition to accountability for unauthorized use, include any consequences for policy violation. This may include a verbal/written warning or suspension of card privileges. In some cases, it may even include disciplinary action or termination.

Make The Policy Available To All Employees

While you might not think it’s necessary for every employee to have access to your credit card policy, you never know when changes may happen within your organization. Someone new might need to use a company credit card without much advance notice.

To keep things streamlined, make the policy available to all employees whether they carry a company credit card or not.

Company Credit Card Policy Template

Details
Company name
Employee name
Employee ID
Card number assigned
Date credit card policy takes effect

Purpose
The purpose of this policy is twofold: (1) To outline the appropriate use of company credit cards, and (2) to control expenses, prevent misuse, streamline reporting, and ensure compliance.

Eligibility
Eligibility is determined by management, is subject to approval by [insert designated authority], and is based on job role, spending authority, and frequency of expenditure.

Spending Limits
The maximum spending limit per cardholder is set at $[Amount] per billing cycle or transaction (management will determine which of those two cases applies).

Making purchases at the following merchant categories is strictly prohibited: Casinos, liquor stores, cannabis shops, etc.

Cash advances are not permitted unless otherwise approved by management.

Any expenses that exceed the established limit (either per billing cycle or transaction) require (1) written approval from management and (2) justification for spending.

Allowable And Prohibited Expenses
Allowable expenses include: Business travel (e.g., airfare, accommodations, meals, transport), client entertainment (e.g., meals, events, gifts), office supplies, business-related software and subscriptions, and purchases directly related to work responsibilities.

Prohibited expenses include: Personal expenses (e.g., groceries, clothing, personal entertainment), excessive or lavish spending, illegal activities, and other specific prohibited uses mentioned throughout this policy.

Allowable and prohibited expenses are subject to change at any time at the discretion of management.

Expense Reporting Process
Employees must retain original receipts or invoices for all transactions.

For purchases that exceed $[Amount], a job code or note outlining the reason for the expenses must be included with the receipt or invoice.

Expense reports and all supporting documentation must be submitted to management via electronic portal no later than the 30th of each month for reimbursement in the next payroll cycle.

Expense reports and documentation will be reviewed by management, and any discrepancies or missing information will be returned to the cardholder for correction.

Failure to submit a complete expense report by the designated date may result in suspension of card privileges or other consequences.

Cardholder Responsibility
Cardholders are responsible for safeguarding their company credit card and ensuring the confidentiality of the card number and all associated information.

Report lost or stolen credit cards to management immediately. Cardholders are responsible for any unauthorized use of their card resulting from negligence. Cardholders are responsible for understanding and adhering to all aspects of this Company Credit Card Policy.

Consequences Of Company Credit Card Policy Violation

Violations of this policy may result in disciplinary action, up to and including termination of employment.

Specific consequences may include: Verbal or written warnings, removal of company credit card privileges, repayment of unauthorized expenses by the cardholder to the company, and other disciplinary measures as deemed appropriate by management.

Agreement And Acknowledgment (signatures, dates, etc.)
Employee signature
Date
Approved by
Date approved

Implement Your Company Credit Card Policy With Coast

If you’re still relying on paper policies, manual reviews, or informal rules to control company spending, it’s time for an upgrade.

Coast helps construction, trades, and transportation businesses turn their credit card policy into an automated system. With Coast, you get powerful, customizable controls that enforce your policy in real time, simplify compliance, and eliminate surprises.

• Spending rules built into the card: Turn spend categories on or off, block specific merchants, and set custom limits by category, cardholder, vehicle, or department. Coast gives you precise control over how, where, and when company cards are used, so your credit card policy is enforced automatically.
• Customizable receipt and data collection: Define your policy for when to collect receipts, memos, and job codes. Coast helps you enforce it with prompts and reminders, so your team submits the right information at the right time, based on spend amount, merchant category, or other criteria you set.
• Seamless accounting: Coast syncs with your accounting system to automate transaction coding and reconciliation. Set rules once and eliminate manual entry, saving your finance team hours each month.

To learn more about how Coast can help your company, visit CoastPay.com today.