---
title: "Company cards and reimbursements: coding, receipts and the statement"
description: "How a company card statement and an out-of-pocket expense report are booked, with a receipt for each, and why paying the statement is not a second expense."
canonical: "https://lopifi.com/learn/company-cards-and-reimbursements"
---

# Company cards and reimbursements: coding, receipts and the statement

> How a company card statement and an out-of-pocket expense report are booked, with a receipt for each, and why paying the statement is not a second expense.

Source: https://lopifi.com/learn/company-cards-and-reimbursements
Part of: Lopifi — Planned: US GAAP books on autopilot, checked by a CPA (https://lopifi.com)

---

**Should employees use a company card or be reimbursed, and how do you book each?** How a company card statement and an out-of-pocket expense report are booked, with a receipt for each, and why paying the statement is not a second expense.

Northwind's people pay in two ways that are not a vendor bill. On a [company card](https://lopifi.com/md/glossary/corporate-card) the issuer pays the merchant, and Northwind owes the issuer. Out of pocket, the employee pays the merchant, and Northwind owes the employee, which is a [Reimbursement](https://lopifi.com/md/glossary/reimbursement). Both are liabilities from the day of the purchase, and both need a receipt and a code. They differ in who is lending whom money while the paperwork catches up.

**Company card**
- Pro: The employee never lends the company money
- Pro: The card feed lands in the books before anyone has to remember the charge
- Pro: A limit is a pre-approval
- Con: Needs limits, a monthly review and a plan for the day someone leaves
- Con: Personal charges happen, and have to be caught and repaid
- Best for: Anyone who buys for the company more than once or twice a month

**Reimbursement**
- Pro: Nothing to issue or cancel
- Pro: The expense report is a ready-made approval step
- Con: Employees lend the company money until the next payment
- Con: Receipts arrive late, in a pile, and the cost reaches the books late
- Con: If it is not handled as an accountable plan, it can become wages (next lesson)
- Best for: Occasional purchases, and the first weeks before cards are issued

**Pay the vendor directly**
- Pro: Matched to an order and approved before payment
- Pro: Settled by the weekly payment run
- Con: Slowest, and needs the vendor set up first
- Best for: Anything with a contract, a recurring fee or an amount that needs a purchase order

Card, reimbursement or direct payment.

## October's card statement

Seven lines posted to the card in October. The [card feed](https://lopifi.com/md/glossary/card-feed) brings each one in as an unreviewed line; the work is to match it to a receipt ([receipt matching](https://lopifi.com/md/glossary/receipt-matching)) and give it a code. Four different answers are hiding in the seven.

| Date | Line | Amount | Coded to | Why |
| --- | --- | --- | --- | --- |
| October 3, 2026 | Cloud hosting | $412.18 | 6800 Software expense | Usage for October: an expense now. |
| October 7, 2026 | Airline, trade show | $486.30 | Travel expense | A trip taken in October. |
| October 9, 2026 | Restaurant, customer lunch | $96.40 | Meals expense | Needs the guest and the purpose written down. |
| October 12, 2026 | Domain and DNS, annual | $180 | 1410 Prepaid software | A year in advance: a prepaid, not October's cost. |
| October 15, 2026 | Label printer | $389 | 6700 Equipment and supplies expense | Under the capitalization threshold: expensed. |
| October 19, 2026 | Racking add-on | $2,780 | 1510 Store fixtures | Over the threshold: an asset, even on a card. |
| October 24, 2026 | Grocery store | $54.20 | Due from employee | Personal. Repaid by the cardholder, never expensed. |

Each line, and what it was.

| Line | Amount |
| --- | --- |
| Expense in October | $1,383.88 |
| Prepaid, released over the year | $180 |
| Asset, depreciated over its life | $2,780 |
| Owed back by the cardholder | $54.20 |
| Statement total | $4,398.08 |

What the statement did to October.

**Wrong:** Nov 15  Dr 6700 Equipment and supplies expense  4,398.08
        Cr 1000 Cash  4,398.08
October expense: 5,781.96

**Right:** Oct 31  Dr each charge to what it was
        Cr Credit card payable  4,398.08
Nov 15  Dr Credit card payable
        Cr 1000 Cash  4,398.08
October expense: 1,383.88

The charges were expensed when they posted. Coding the payment to an expense as well counts them again, and the card liability never goes down.

> **Mistake.** Coding the statement payment to an expense, or letting both the card feed and the bank feed bring the payment in. The month's cost doubles, the card payable never clears, and the P&L is wrong by exactly the statement. Match the bank line to the payable and nothing else.

## Receipts and the month-end tie

1. **Match the receipts.** Every posted charge is matched to a receipt. Under Northwind's policy that is all 7 of the lines above, since the minimum is $25.
2. **Code and explain.** A department, an account and a business purpose for each line. A restaurant charge without a guest and a purpose waits.
3. **Review.** Someone other than the cardholder reviews the cardholder's month and approves it.
4. **Route the exceptions.** Prepaids go to the prepaid account and are scheduled; assets go to the asset register; personal charges are billed back.
5. **Tie the payable.** The credit card payable ties to the issuer's statement balance. Charges the feed has not brought in yet are the difference, and they are listed.

Closing a card statement.

> **Tip.** Make the cardholder attach the receipt and the purpose from the phone at the moment of purchase. A receipt photographed that day costs ten seconds; the same receipt in three weeks is a conversation.

> **Tip.** Give every cardholder a default department, so a charge with no other instruction lands somewhere reviewable instead of in an uncoded pile. The pile is where the month-end hours go.

> **Tip.** Move recurring software off personal cards and onto the company card before the person who signed up leaves. A subscription that dies with someone's card is an outage, and one that outlives them is a charge nobody owns.

> **Tip.** Watch the feed for annual charges. A year of a tool, billed once, is a prepaid; if the feed codes it straight to expense it overstates the month and understates every month after.

## The out-of-pocket path

An employee paid for three things herself and submits an [expense report](https://lopifi.com/md/glossary/expense-report). When it is approved, the expense belongs to the month it was incurred, and the liability is to the employee. Payment, a few days later, only clears the liability.

> **Watch for.** A founder who owns the company and pays for company things with a personal card. Whether that is a reimbursement, a loan to the company or paid-in capital depends on the entity and on how it is documented, and the books can record it wrongly in a way that is hard to unwind. Ask your tax preparer before you pick one; this lesson states no rule for owners.

**Use case — The first month, before the card arrives.** A new hire starts on Monday and needs software, a keyboard and a train ticket before the card arrives. Under the policy, they buy the keyboard and the ticket themselves and expense them, while the software goes on the company card the manager holds. Three weeks later the hire has a card and a limit, and reimbursements go back to being occasional.

> **Code every charge when it posts, and treat the payment of the statement as nothing but cash against a payable.**

**Scenario — Challenge: code October's statement.** The statement above is open and the payment is due. Code each of the seven lines to what it was (an expense, a prepaid, an asset, or personal), then code the payment, and watch what the month's expense total does depending on how you code the payment.

**Exercise — Code October's card statement.** October's card statement and the payment that follows it. Code each charge to what it was, then code the payment. Watch the total of October's expense: every charge already hit it when it posted. Type it in the workbook at https://lopifi.com/playground.

## Where this lesson's rules come from

- [Treas. Reg. §1.274-5(c)(2)(iii)(A)](https://www.law.cornell.edu/cfr/text/26/1.274-5) — When a receipt is required: lodging, and any other expense of $75 or more (regulation)
- [IRS Publication 463, Travel, Gift, and Car Expenses (2025)](https://www.irs.gov/publications/p463) — Reimbursements, per diem, the 50% limit on meals and accountable plans (irs)
- [ASC 405](https://asc.fasb.org/405/tableOfContent) — Liabilities (codification)

## Read further

- https://lopifi.com/md/journal-entries/credit-card-expenses
- https://lopifi.com/md/journal-entries/accounts-payable
- https://lopifi.com/md/startups/company-cards-and-receipts
- https://lopifi.com/md/startups/employee-expense-reimbursements
- https://lopifi.com/md/docs/domain/procure-to-pay
- https://lopifi.com/md/docs/domain/schedules-and-accruals

- **Track:** [Accounts payable](https://lopifi.com/md/learn/ap)
- **Lesson:** Lesson 16 of 21 — 11 min
- **Terms taught:** [Corporate card](https://lopifi.com/md/glossary/corporate-card), [Card feed](https://lopifi.com/md/glossary/card-feed), [Receipt matching](https://lopifi.com/md/glossary/receipt-matching), [Expense report](https://lopifi.com/md/glossary/expense-report), [Reimbursement](https://lopifi.com/md/glossary/reimbursement), [Prepaid expense](https://lopifi.com/md/glossary/prepaid-expense)
- **Previous:** [Expense policy: who spends, who approves, what proof, AP · Lesson 15](https://lopifi.com/md/learn/expense-policy-and-approvals)
- **Next:** [Accountable plans: when a reimbursement is not wages, AP · Lesson 17](https://lopifi.com/md/learn/accountable-plans-and-reimbursements)
- **The course:** https://lopifi.com/md/learn