Q. (cont.) We do not have a formal procurement card program but we do have a business VISA bank credit card in the name of our company, under which we have cards issued to most of these people. The problem is that a few of them habitually do not turn in their receipts. In addition, we also have an “office” card, and our payable administrator gives the number out to different people in the office so they can make online or call-in purchases, and often the person making a purchase fails to give the AP person a receipt.
When the card bill arrives each month, we may have 10 to 20 missing receipts, which take time to investigate to discover the purchaser, and if we know the purchaser, the nature of the purchase so we can code and process it.
- How do companies normally handle a cardholder who habitually does not turn in credit card receipts? What if the person is very good at what he does and is an otherwise very valuable employee whom the company could not do without?
- How do companies handle the second situation, in which an AP person gives a credit card number to many different office people to make a purchase, but those people fail to turn in a receipt? Should we log each time the card number is given out, with the recipient signing his name and listing the proposed vendor, general amount and purpose?
Your first question presents an interesting challenge, and even within formal p-cards programs, a common one. (We would argue that while you do not have a formal p-card program, you do have a company credit card for which the company is liable, so the same principles and practices apply.) Best practice is to have company card policies and procedures (P&P) in place and enforced. It is important to have good controls on card use, spelled out in the P&P. Key controls regarding a company credit card include:
- Reconciliation (card users)
- Review (managers/supervisors)
- Audit (auditors)
A crucial factor, of course, is management support of P&Ps. If management overlooks or winks at non-compliance, you will have difficulty overcoming it, so one step is to get management support – if they’re not currently on board, present them with the risks/possible consequences of lax card controls.
The P&P should include an acknowledgement sheet that employees must sign annually that says the signer understands and agrees to comply with the policy, and the consequences for non-compliance. Then make the case to the employees, not only laying out policy, but why the policy is important. The teeth of a policy generally take the form of suspension of privileges. Of course in your situation, it may be argued that such an enforcement procedure shouldn’t or can’t be employed – it is a decision of management but should be made based on the degree of risk they are willing to take. Your responsibility is to call out the risk.
Review the following resources on the Network:
As for the second question, your proposal is a good one – you capture the information up front. You could add a receipt agreement to that (the user completes and signs the information form, which includes a promise to provide receipt); an enforcement provision could be that they are unable to use the card next time without a signed approval from their manager (works if they are likely to use the card again) or some other consequence.