How is everyone handling company reimbursement for personal charges that get placed on a company bill company paid corporate card? We have very few instances of this since employees are not allowed to use card for personal expenses however occasionally it does happen and I end up having to chase down the employee for reimbursement. I would like to automate the process somehow.
We mark them as personal on the report and they net against any out of pocket expenses that the employee has. Our out of pocket reimbursements are paid through ADP so if there happens to be only a personal expense or if the personal expense is more than the out of pocket reimbursement, it is taken out of their payroll. This works very well for us.
We have the same issue with our CBCP cards - it does not happen often, but it does happen. We have not been able to automate this process. Currently, our Processor sends an e-mail asking the employee to send the check. There is a bit of chasing the employee down.
With our IBCP cards, it works differently - automated. They can mark the expense as personal, and then, pay the credit card company directly for their personal expenses.
I would look into two things and you will need some help from Concur to accomplish both:
1 - Look into turning on reimbursement offsets for your CBCP corporate card. When this feature is turned on the system will deduct personal amounts from the out of pocket expenses on the same expense report.
For example: if I have $100 in out of pocket expenses on my expense report and I have marked a $50 corporate card charge as personal the system will deduct the $50 in personal from the $100 OOP. You will pay the full amount to the bank and you'll only give me $50.
With proper communications up front, this works very well. The issue that can arise is if there is more personal expenses than OOP expenses on an expense report the system will offset as much as possible, but the user will still owe you the remainder. This works just fine, but it can be confusing for the user.
2 - Many years ago Concur acquired a company called Gelco. As part of that acquisition we added a couple features from the Gelco product to the Concur product. One of those features is called Balance Carry Forward. If this feature is turned on the user is allowed to keep any balance owed the company and the system will automatically deduct that balance from the user's next expense report. This setting is turned on at the Policy level.
The two settings above can be turned on individually or in conjunction with each other. In all cases you'll need to track the balances employees owe you, but the system is trying to take as much of the collections work off your hands as possible.
We use Company Bill Statements to process our CBCP program, and when we set that up in Concur, we decided to create an expense type for 'accidental personal use'. When used, the employees sees an informational message (set as an audit rule) telling them to send a check for the personal amount, made out to the company, to Accounts Receiveable. It also reminds them that personal usage is against policy and should not be repeated. The GL account behind the expense type is an employee receiveable account.
We can audit once a quarter to ensure we've received all the reimbusements for personal charges, and follow up with any that are missing. Accounts Receivable will code the reimbursement to the same employee receivable account.
Our pre-Company Bill Statements process (prior to Concur) was very manual and much more time-consuming. So although we didn't like the tacit acceptance of personal charges that the use of an expense type might suggest, we have not noticed any uptick in the number of accidental personal charges.
Handling personal charge repayment is a time consuming issue for us. We have both processes Grant mentions turned on. The system does subract the personal amount.
However 99% of the time the employee does not have cash that offsets their charge.
We're puzzled by the fact that apparently in most other companies all their employees happen to have cash amounts to offset.
Handling personal payments is about half of a full time headcount for us. We've researched various options but so far have not found one that works.
Since Uber and Lyft came along our personal charges more than doubled. Employees can't seem to keep the personal vs business cards straight. Amazon is also a major headache since they don't let you label or describe the cards you store so it's too easy to use the wrong card.
(How is it that the Worlds largest retailer can't add a simple description field to method of payment??)
On the rare occasions where someone uses their CBCP card for personal use, our Finance team will send them an email asking for the money to be transfered to the company.
However, we do also have it in our credit card policy (signed by each user when the accept a company credit card) that in the event that they use the card for personal use, the company has the right to withold that amount from their salary payment as reimbursement.
This "threat" helps employees think twice about using the comapny card for personal items, and ensures they are quick to repay the company if they do....
I'm interested in more information about your IBCP cards and how this process for your company works. We will be transitioning from CBCP to IBCP within a few months, and this would be a great way to handle personal charges.
So if a user has a charge, marks it as personal, does that information get transferred to your bank, and the bank issues a bill to the user? Or else how is it automated? I would love to take out as much user dependency as possible.
Our expense imports to our Finance system for Corporate Credit Card charges are posted separately from Out-of-pocket expenses, and therefore we cannot offset against employee reimbursements. Any private credit card transactions are mapped to a suspense account, and the import automatically posts the personal credit card transactions to this account.
We request the employee to select the `Personal Expense' option on the credt card expense (if proportionately private, then the expense should be itemised), and provide the bank details to make an online transfer and ask that the bank confirmation be attached to the expense prior to submitting. This way, we can manage the collection of funds upfront, minimising the administration of fund collection after the fact. We request that the transfer reference contain the suspense account number so that it can be coded to the account from the bank account.
The personal credit card suspense account can then be monitored for any variances, but ideally if the process is followed, there should only be timing differences between the receipt of payment and the processing of the expense claim.
This is one of the main reasons IBCP are the best option for mos companies. The Individual part provides employee accountability while the company part ensures timely payments. You can set it up to autopay only the approved business expenses that have been processed through Concur which means any personal amount would remain outstanding, on the individuals account, and wouldn't be paid until they paid it. They pay the late fees, their card is delingquent etc. Technically the company is still responsible but nothing like payment notifications from the credit card company to get them to make a payment.