I am looking for the best or most common practice on allowing employees to charge personal expenses using their corporate credit card. We are looking to restrict this practice and management has asked for information on other company practices.

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We do not have specific statistics on members who allow personal charges on their business credit cards. In general, our recommendation is that only business expenses are able to be charged and not personal expenses. If your company pays the credit card bills directly to the merchant provider and your company has to wait to get a reimbursement from your employees for their personal expenses tends to get very messy and you could potentially miss getting reimbursed.

If you have an IRS audit and they are unable to see how each personal expense is reimbursed then they would deny the expenses, resulting in an increase in your corporate tax liability.

However, the decision is ultimately up to management. Allowing personal expenses on the business credit cards opens up the opportunity for fraud and for expenses getting charged to your business that the IRS would later deny in an audit.

We recently posted a poll to TAPN questioning organizations about their policies regarding personal expenses being charged to corporate credit cards. 2 out of 3 participating companies said they prohibit this practice.

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