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Employee using personal credit card for company purchases

  • 1.  Employee using personal credit card for company purchases

    Posted 10-14-2019 15:44
    We issue company credit cards to employees to use for travel expenses, miscellaneous purchases for projects, etc.  We had a newer employee recently use his personal credit card to purchase about $3,500 in materials for a project and turned it in on an expense report for reimbursement.  When I asked him why he didn't use his company issued credit card, he said he'd like to continue to use his personal credit card in order to get the points/travel rewards and get reimbursed via expense report.  He asked if that would be OK.  I have never been asked this question before and told him I'd get back with him.

    From an accounting standpoint is there any reason an employee could not use his personal credit card for company purchases and be reimbursed?  Either way it's a business expense whether it's paid to a credit card company or to an employee via expense reimbursement. So I can't think of a reason why we couldn't do that.  But I'm not a CPA so maybe I'm missing something.  Any thoughts?  Thanks all.

    Martha K. Meyer, Controller
    Resource Commercial, Inc.

    Martha Meyer
    Dallas TX
    (214) 478-3825

  • 2.  RE: Employee using personal credit card for company purchases

    Posted 10-15-2019 11:39
    There isn't any accounting or tax reason to require company cards vs personal cards. There are several advantages to company cards from an accounting/finance standpoint though. The primary advantage from the company's standpoint is that it allows you to see costs and expenses more immediately, depending on how frequently expense reports are entered into the system. It also limits the "whoops I forgot to turn in my expenses from 3 months ago" factor and allows management to have more visibility of expenses.

    In general, if it is company policy that they use the company card, it would probably be wise to enforce that across the board so that expense recognition is consistent.

    Chris Sundberg CPA
    Assistant Vice President
    Mullis Newby Hurst LP
    Addison TX

  • 3.  RE: Employee using personal credit card for company purchases

    Posted 10-16-2019 08:34

    Another advantage of using a company card is that you should be able to negotiate a cash rebate on credit card purchases with the bank issuing the credit card - probably ranging from .5% to 1.5% depending on your volume of credit card use.  Comdata is an alternate source to consider for these types of payments.  Comdata not only offers your company a cash rebate, but also give a rebate to CFMA.
    If you ultimately decide to allow the use of personal credit cards, I would put in place strict rules about the documentation you expect to see.  For example, I would not accept a line item on a credit card statement as the receipt.  Additionally, Chris Sundberg stated, to avoid the "I forgot to submit my request" excuse, your policy should clearly state that items must be submitted for reimbursement within 90 (or 60) days of invoice date.

    Frank Cinatl, CPA
    Executive VP
    Abatix Corp.
    Dallas, Texas