Professional Services Credit Card Reconciliation
A standardised procedure for reconciling corporate credit card statements to ensure all transactions are legitimate, properly coded, supported by receipts, and recorded in the accounting system.
Purpose
To maintain control over corporate credit card expenditure by verifying every matter, ensuring compliance with the credit card policy, and accurately recording expenses in the general ledger.
Scope
Covers all corporate credit cards issued to employees, from monthly statement receipt through to reconciliation, coding, approval, and posting in the accounting system.
Prerequisites
- Corporate credit card policy distributed to all cardholders
- Monthly credit card statements received from the card provider
- Cardholders have submitted receipts and matter explanations for the period
Designed to meet professional indemnity requirements, client confidentiality obligations, and industry body reporting standards.
Step-by-Step Procedure
Distribute Statements to Cardholders
Distribute monthly credit card statements to each cardholder for review and receipt attachment.
- 1.1Obtain the monthly statement from the card provider for each card
- 1.2Send each cardholder their statement with a deadline for reconciliation submission
- 1.3Provide the credit card reconciliation template if required
Cardholder Reviews and Annotates Transactions
Each cardholder reviews their statement, attaches receipts for each matter, provides a business purpose, and codes each item.
- 2.1Review each matter and confirm it is a legitimate business expense
- 2.2Attach the original tax invoice or receipt for each matter
- 2.3Provide a brief description of the business purpose for each matter
- 2.4Assign the correct general ledger account and cost-centre code
- 2.5Flag any personal or disputed transactions
- Keep receipts as you make purchases rather than trying to find them at month end
Submit Reconciliation for Manager Approval
The cardholder submits the completed reconciliation with all receipts to their line manager for review and approval.
- 3.1Compile all receipts and the annotated statement into a single submission
- 3.2Submit to the line manager by the specified deadline
- 3.3Follow up on any items the manager queries
Manager Review and Approval
The line manager reviews all transactions for policy compliance, verifies receipts, and approves the reconciliation.
- 4.1Verify each matter has a receipt and a valid business purpose
- 4.2Confirm all transactions comply with the credit card policy limits and approved categories
- 4.3Review and address any flagged personal or disputed transactions
- 4.4Sign off on the reconciliation and forward to the finance team
Finance Team Verification and Posting
The finance team verifies the coding and GST treatment for each matter and posts the credit card expenses to the general ledger.
- 5.1Review general ledger codes and cost-centre allocations for accuracy
- 5.2Verify GST has been correctly claimed only where a valid tax invoice is provided
- 5.3Post all transactions to the general ledger
- 5.4Reconcile the credit card liability account to the statement balance
Arrange Payment of the Credit Card Statement
Process payment of the credit card balance by the due date to avoid interest charges and late fees.
- 6.1Confirm the total payment amount matches the statement balance
- 6.2Schedule the payment via direct debit or manual bank transfer
- 6.3Ensure payment is processed before the statement due date
- 6.4Record the payment in the accounting system against the credit card liability account
Address Exceptions and Policy Breaches
Investigate and resolve any missing receipts, personal transactions, or policy breaches identified during the reconciliation process.
- 7.1Follow up with cardholders on missing receipts and obtain statutory declarations if required
- 7.2Arrange repayment from the cardholder for any personal transactions
- 7.3Report any policy breaches to the Finance Manager for action
- 7.4Document all exceptions and resolutions in the reconciliation file
Quality Checkpoints
Common Mistakes to Avoid
Expected Outcomes
All credit card reconciliations are completed and posted within 10 business days of the statement date.
At least 98% of transactions have a valid tax invoice or receipt attached.
Fewer than 2% of transactions are identified as policy breaches per quarter.
Frequently Asked Questions
What happens if a matter is fraudulent?
Contact the card provider immediately to report the fraudulent matter and request a chargeback. Notify the Finance Manager and follow the organisation fraud reporting procedures.
How are disputed transactions handled during reconciliation?
Disputed transactions should be flagged on the reconciliation and a dispute raised with the card provider. The matter remains on the ledger until the dispute is resolved, at which point it is reversed or confirmed.
What should I do if I lose a receipt for a credit card matter?
Attempt to obtain a duplicate from the merchant. If a duplicate cannot be obtained, complete a lost receipt declaration form. GST credits generally cannot be claimed without a valid tax invoice.
Can I use the corporate card for personal expenses in an emergency?
The corporate card should only be used for business expenses. In exceptional circumstances, notify the Finance Manager immediately and arrange for prompt repayment of the personal amount.
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