- What type of documentation do businesses require for the P-Card to show proof of purchase?
- What type of audits are conducted on the P-Card to ensure compliance to the business rules?
- When a P-Card user no longer requires the card (either job change, leaves the company, retirement, etc) what is done with the paperwork and back-up documentation? Is it sent to one specific department?
A: The answers depend on several factors including your record retention policies, management philosophy related to documentation requirements, risk management for audits, computer systems, and size of your organization.
Documentation: Your question about proof of purchase should be guided by management as to what level of documentation must be retained for back up of the purchase. Many companies will at least follow the IRS guidelines where purchases in excess of $75 should have documentation such as a transaction receipt. We have seen some companies place a threshold as low as $25 for requiring a receipt.
Audits: The audits performed will depend on the capabilities of your p-card system and accounting system as well as the number of transactions. It generally is cost prohibited to do a 100% audit of all transactions although some companies may require it at some point. Often a sample of transactions is selected to test compliance to the Company's policies. The sample can be done using a statistical calculation or a random sample interval such as testing every 100 transactions after starting with a random number. You can find a random number generator at www.random.org/nform.html.
Record retention: The record retention responsibilities after a p-card is cancelled depends on how your company is structured and its size. Often the Accounts Payable department is charged with the task of maintaining the payment transaction records with the corresponding receipts. Record retention services are available to pick up and store documents off-site at secured locations. You would want to consider how long to keep records on-site for audit and tax purposes before sending them to another location. TAPN has a record retention listing in the disaster recovery category of our Tools section of the site.