While a credit card statement can provide a record of expenses charged to a company credit card, it is not sufficient for expense reporting for several reasons:
- Credit card statements do not include sufficient detail: Credit card statements may not provide enough detail about the purpose of the expenses, or the specific items purchased, making it difficult to determine if the expenses are eligible for reimbursement.
- Credit card statements do not include supporting documentation: Credit card statements do not include receipts or other supporting documentation, which are required to verify the validity of the expenses by various entities and regulatory bodies.
- Credit card statements may not include all expenses: Some expenses, such as cash payments or personal expenses, may not appear on a credit card statement.
For these reasons, it is essential to not just rely on credit card data for expense reports. Instead, a proper expense reporting software should be utilized that ideally generates the expense reports automatically for employees from the incoming receipts and invoices. The receipt or invoice data should be the ground truth data, so that expense records in the books match what the supporting documentation says. This helps to ensure that all eligible expenses are properly accounted for and that the expense report is complete and accurate.
At the same time, this data from receipts should be utilized to audit credit card statements. For many companies, a credit card statement may be one of the largest bills received and should not be blindly relied upon. Instead, expense reporting software is needed that can independently audit the credit card statements, detect any deviations and flag possible discrepancies.
A credit card statement may not be completely accurate:
- Fraud or unauthorized charges: If someone has gained access to an employee’s credit card and made unauthorized charges, these charges will appear on the credit card statement.
- Processing errors: In some cases, a credit card transaction may be improperly processed or recorded, resulting in an incorrect charge appearing on your statement.
- Returns or refunds: If you have returned a purchase or received a refund for an item, this may not be reflected on your credit card statement immediately.
To check the accuracy of a credit card statement, a company should review the statement carefully and compare it to records, such as receipts or account statements from merchants, which can be very time-consuming. With expense reporting services such as ABUKAI, you can automatically detect discrepancies by comparing the card data to what the actual receipts state. Deviations can get highlighted so that issues can be immediately reported to a credit card issuer. ABUKAI’s patented receipt recognition technology enables this level of automation.
You should also be mindful when picking a software vendor that the vendor is not tied up with the credit card provider, so that the expense reporting service can take an independent role in auditing card statements. Services that are tied to a specific card provider may have an incentive to just rely on the credit card feeds as the ground truth and means to all ends, while cutting corners on validating that receipts and card transactions actually match. You will find that some vendors get a reward for the more money spent on your credit cards instead of taking an independent role of an auditor of your bills and statements.
If you are interested to learn more, contact us today discuss your needs and how ABUKAI may be able to assist your business.