Some of our employees have corporate credit cards. When the statements are submitted to AP for payment with a reason for each charge, do we also need receipts?

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Provided you have documentation of the business reason for the charge, with date, purchase amount, and vendor, that may be adequate as far as IRS concerns. The IRS says you must have “adequate evidence” of the expense. According to the IRS, “Documentary evidence ordinarily will be considered adequate if it shows the amount, date, place, and essential character of the expense.” The other consideration, of course, is having adequate internal controls on spending in your P-card policy and processes, such as manager oversight and approval, etc.

Credit card statements are accepted by many organizations in lieu of receipts, with the exception of hotel receipts (portfolios) which are required in order to see the detail that the credit card statement typically lacks. Credit card statements are acceptable to the IRS provided that the information on the statement meets the IRS requirements per Publication 463, as stated above.

You may wish to review TAPN’s P-card policy manual for ideas regarding recordkeeping, card statement reconciliation and receipt documentation.

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