You saw the employee side steps for purchase cards in the last post. http://faoblog.com/processes-ap-p-card-process-details/
We got a guest post http://faoblog.com/te-expenses-differ-p-card-expenses/. The lady pointed out that P-Cards and T & E expenses were different. Yes, from an accounting perspective these are different. However, the scope of P-Cards over a period of time has changed. Though they are still called P-Cards, however, besides being used for purchases, these are used for office expenses, like stationery and other transactions as well. I have seen a client of mine who issued such cards to its vendors as well, and the vendor used it for immediate payment by swiping it, whereas this client paid to the banker after 15-45 days, depending on the date of the transactions. See my comment on the post http://faoblog.com/te-expenses-differ-p-card-expenses/#comment-804
Another query came for use of such cards only for travel related expenses. A variant of these cards is a travel card, in which an amount can be pre-loaded so that the employee can spend on the card. See the comment for more details. http://faoblog.com/processes-ap-p-card-process-details/#comment-811
My current focus is on process, how it will work for an outsourcing provider or a company back office.
Coming back to the process, the bank / card company forms an important part of the process as well.
From the bank’s / card company’s side the following steps will be mandated:
- Bank will submit a detained statement to your client – consolidated or by individual card wise
- In case of consolidated statements, details by each card and transaction will be shared
- This will be done on a pre-defined frequency, normally monthly. In case of high volumes, this could be weekly or fortnightly as well. Normally this does not exceed a month for most of the organizations.
- Usually electronic data is preferred, being transferred in a secure mode to the accounts department of the organization.
- This can be in the form of password protected flat files (CSV / TXT) or some EDI (electronic data interface) – encrypted or general format etc.
- Some banks give excel and PDF formats as well.
- The amounts spent will be debited to the employee’s account.
- A payment process shall be triggered by your client for release of funds to the bank. In some cases this may be automated.
I will share more on purchase card maintenance in the next post.
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