A step-by-step guide to corporate credit card reconciliation

Corporate credit card reconciliation is the process of verifying and matching transactions on credit card statements with corresponding internal records. Every transaction on a corporate card must match up with a receipt or invoice to ensure that all spend is legitimate and in-policy.

Reconciliation ensures that all company credit card expenses are properly categorized and accurately reflected in the accounting solution. Once the accountant verifies that every statement transaction matches the general ledger, they can complete the month-end closing process.

Businesses usually reconcile their credit card expenses monthly. Credit card reconciliation is also conducted during end-of-quarter and end-of-year closes.

The reconciliation process was once entirely manual — accountants would have to go line-by-line through statements and stacks of expense reports. Now, the process can be mostly paperless with the right expense management software.

Ensuring that all credit card expenses are legitimate, properly categorized, and accurately reflected in your accounting records creates a solid foundation for all your financial activities. Corporate card reconciliation helps businesses prevent fraud, catch costly errors, stay audit-ready, and budget appropriately. This accuracy is crucial for everything — from day-to-day operations to strategic planning and investor relations.

And consistent credit card reconciliation helps to reinforce a culture of financial discipline by shining a light on spending patterns. It's like having a financial fitness tracker for your company. When everyone can see the impact of their choices, they're more inclined to make better ones.

The best corporate credit card policies are those that balance control with flexibility and compliance with practicality. These best practices will show you how to strike that balance, creating a policy that protects your company's interests while empowering your employees to do their jobs efficiently.

Conduct a comprehensive analysis of company spending patterns

Analyzing and documenting exactly how your company spends will help you create the right kind of credit card policies for employees. Set aside time to analyze typical expense categories and spending behaviors so that you can tailor the policy to your company’s specific needs. One way to do this is by using Brex, where you’ll see real-time spending as it happens, and you can run smart filters and detailed reports for any time frame.

Encourage a collaborative approach

Many areas of the business may spend differently. For example, the sales team may need to travel much more frequently than your marketing team. So it’s important to communicate with stakeholders from all departments to ensure the policy aligns with spend needs across teams. Collaboration between finance and business unit leaders can help create a balanced and practical policy.

Incorporate best practices from industry standards and regulations

To strengthen your company’s compliance even further, integrate industry best practices and recommendations from organizations like the National Association of Travel Managers (NATM) or the Global Business Travel Association (GBTA).

Tailor your policy to company needs and goals

Consider customizing your policy based on your company's size, structure, growth stage, and spending habits. For instance, you can decide how much information you might want to include on budgets, spend limits, how approval chains will work, and integrations that employees can use — like Slack notifications for all employees or accounting automation for the finance team. Focus on aspects most relevant to your operations to create a policy that’s both practical and effective.

Provide clear and concise guidelines for employees

A corporate card policy is most effective when employees can easily understand it, so it’s critical to clearly communicate your guidelines. With Brex, employees can access their company policy in an easy-to-view format with a few quick clicks or taps in their dashboard or mobile app. You’ll also get onboarding and implementation assistance, plus 24/7 live support for any questions after the onboarding phase, to ensure every employee is knowledgeable about proper card usage and expense reporting procedures.

Regularly review and update

Lastly, regularly review and update your policy to reflect changes in regulations, company needs, spending patterns, or other market changes. By keeping an up-to-date policy, you’ll reinforce responsible and controlled corporate credit card use.

Brex, a leading provider of corporate credit card programs, elevates policy enforcement through a comprehensive suite of features designed to enhance control and efficiency. As a pioneer in the fintech space, Brex has reimagined how businesses manage their expenses, offering solutions that go far beyond traditional corporate cards.

At its core, Brex offers customizable spending controls and limits that align precisely with your policy guidelines, enabling proactive spend management rather than reactive corrections. This is complemented by sophisticated AI-driven automations that handle expense categorization and reporting, significantly reducing manual workload and potential errors.

A standout feature of Brex is its real-time expense tracking capability. This provides unprecedented visibility into company spending, allowing for immediate policy compliance checks and swift resolution of any discrepancies. Brex also revolutionizes the often cumbersome expense reporting process. Through automated report generation and intelligent receipt management — including upload reminders and auto-generated receipts — Brex significantly simplifies documentation requirements.

Furthermore, Brex seamlessly integrates with other essential business tools, such as Slack for notifications and various accounting software for cohesive financial management. The platform also prioritizes security, offering robust, enterprise-grade protection against fraud. Perhaps most importantly, Brex ensures that employees have easy access to company policy directly within their dashboard or mobile app, promoting consistent adherence to guidelines. By combining these powerful elements, Brex transforms corporate credit card policy management into an efficient, user-friendly process that enhances financial control while facilitating employee compliance.

Beyond just keeping your books balanced, a reliable corporate credit card reconciliation process:

Enhances financial accuracy and transparency

By meticulously matching transactions with internal records, businesses can ensure that their financial statements truly reflect their spending. Accurate data is essential for:

1. Budgeting and forecasting: Accurate financial records provide a solid foundation for creating realistic budgets and forecasts. When you know exactly where your money is going, you can make more informed decisions about future spending.

2. Financial reporting compliance: Many businesses are subject to strict reporting requirements. Accurate reconciliation helps ensure that your financial reports meet these standards, reducing the risk of compliance issues.

3. Improved decision-making: With a clear picture of your company's spending patterns, leadership can make more informed strategic decisions about resource allocation and cost-cutting measures.

Safeguards against fraud

A well-executed reconciliation process is one of your best defenses against credit card fraud. By regularly reviewing transactions and quickly identifying suspicious activity, you can prevent small issues from snowballing into major financial losses.

For example, imagine an employee's corporate card number is stolen and used to make a series of small, seemingly innocuous purchases. Without regular reconciliation, these charges might go unnoticed for months, allowing the fraudster to gradually increase the size and frequency of their illicit transactions.

But, with a strong credit card reconciliation process in place, these unusual charges are flagged quickly, allowing the company to take immediate action.

Promotes responsible spending habits

Regular credit card reconciliation promotes transparency and accountability throughout the organization. When employees know that their expenses will be closely scrutinized, they're more likely to be mindful of their spending habits. This increased awareness leads to more responsible use of company dollars and significant cost savings over time.

Moreover, the insights gained from the reconciliation process can help identify areas where the company might be overspending or where there are opportunities for negotiating better rates with frequently used vendors.

Through reconciliation, a company might find that employees are frequently using one particular hotel chain for business travel. This insight could prompt the finance team to negotiate a corporate rate with that hotel chain, potentially saving thousands of dollars annually. Conversely, corporate credit card reconciliation could also show significant spending on office supplies from different vendors, which could lead to consolidating purchases with a single supplier and better pricing.

Improves efficiency and operations

By catching and correcting errors early, you can avoid the manual, time-consuming process of tracking down discrepancies months later.

In turn, the accounting team can focus on higher-impact work. Instead of chasing receipts, accountants can dive deeper into financial analysis, identifying trends and opportunities for cost savings or revenue growth. They can also dedicate more time to strategic planning, helping to guide financial decision-making that supports the company's long-term goals.

Expense management automation can further drive efficiency by automatically categorizing expenses, flagging policy violations, and even generating expense reports. Direct integrations between your expense management and accounting software reduce manual entry even further.

These adjustments to your reconciliation process significantly improve operational efficiency across the organization. With more accurate and timely financial data, leadership can make better-informed decisions about resource allocation and business strategy. The standardized processes developed for reconciliation can also improve workflows across departments, fostering better interdepartmental collaboration and communication.

“[Before Brex], we could only see what was spent after the fact, and it was hard to have true control or oversight. We were spending a lot of time trying to reconcile and categorize spend and get accurate data.” — Candice Chow-Gamboa, Chief of Staff at Heirloom

A well-crafted corporate credit card policy isn't just a rulebook — it's the foundation for financial discipline and a catalyst for growth in your company. By incorporating the key elements we've discussed and embracing smart practices, you're not just keeping spending in check; you're fostering a culture where every dollar spent contributes to your business's future.

Remember, the best policies evolve with your company. Regular reviews and updates aren't just good housekeeping — they're how you keep your policy relevant in a fast-paced business world.

We understand that creating and implementing such a policy can feel daunting. That's where tools like Brex come into play. They're designed to turn your thoughtful guidelines into smooth, day-to-day operations. Why not see for yourself? Book a demo with Brex to explore how their features can simplify your expense management and bring your policy to life.

At its core, your corporate credit card policy is a powerful ally. When done right, it's not just about watching expenses — it's about empowering your team, enhancing transparency, and freeing up resources to focus on what truly matters: growing your business.

So, take this knowledge and put it into action. Create a policy that aligns with your company's values and supports its ambitions. Leverage the right tools, like Brex, to make implementation smooth and compliance effortless. You might just find that good financial governance isn't a necessary burden — it's the wind beneath your company's wings.

Ready to kickstart smarter spending and future proof your company’s financial health? The time to act is now. Your future self (and your bottom line) will thank you. Don't wait — sign up for a Brex corporate credit card today and take the first step towards transforming your expense management.