What basic accounting steps help you track down credit card purchases?
Do you track company credit card transactions? Every busy owner, manager, and employee who is issued a company credit card should already know the answer to this question. The answer should be yes! It is paramount to an organization to ensure that proper controls are set in place and enforced to monitor and track company credit card activity. This is especially critical for companies that are frequently issuing or closing accounts for large numbers of employees. Control needs to start with well-crafted company issued credit card policies that hold card holders accountable for their account activity. Without a policy it will be difficult to maintain standardization for tracking card transactions, as well as ensuring accountability. Poor control can lead to negative issues that will quickly spiral out of control. Those issues are usually related to excessive expenditures, inadequate record keeping, and even losses related to outside fraudulent charges.
For some, making sure credit card transactions are tracked and recorded properly might appear to be a daunting task, but in reality it doesn’t have to be. This is true whether there is one card to monitor or a large corporate account. It starts with providing the card holders with the best tools to assist with monitoring activity. It isn’t always necessary to purchase expensive software or subscriptions to help track activity. A simple spreadsheet can do the trick for most small business owners.
A 2 step process in tracking transactions:
Step 1: Start with recording every credit card transaction on a spreadsheet or accounting software as a bill or accounts payable invoice. Think of it as keeping track of bank register.
Step 2: Scan or take a picture of invoices with a smartphone, which most individuals have and save to a centralized electronic folder. Keeping receipts may seem to be a mundane task, but it is an extremely important one. Saving receipts ensures that you stay compliant with IRS regulations as well as validating charges.
When the statements are received and the credit card payments are issued account reconciliation should begin. A quick match of the charges listed in the statement should match the transactions recorded earlier. From here the charges can be validated.
“It is paramount to an organization to ensure that proper controls are set in place and enforced to monitor and track company credit card activity.”
Multiple credit card user organizations
For larger organizations with several credit card holders this will not be the best solution. In this case using software solutions such as Concur may be the best option. The cost of the subscription can be easily justified by the amount of employee hours freed from manually tracking credit card activity. Another advantage of using a system like Concur is that it enables employees with the power to instantly take a picture of a receipt, create an expense report, and submit for approval all from their mobile device. Once the expenses are approved they can be uploaded directly to an accounting platform. Concur also provides essential reporting features that can be utilized for reporting purposes.
What other kinds of tools and methods do you use? Is there one that you would consider good bookkeeping tips share for our discussion? Please feel free to leave a comment!
LUXA Enterprises offers outsourced accounting services for small businesses in the Tulsa and surrounding areas. If you’re considering a short or long-term approach to outsource accounting, give us a call for more information at 918-928-7288.