How Accounting Entries for Corporate Card Transactions Are Distributed
Accounting entries vary depending on which payment option is used by your company.
The following table illustrates a sample expense report with various payment liabilities and amounts.
Payment Method |
Amount |
---|---|
Cash |
500 USD |
Corporate Card Business Expenses |
650 USD |
Corporate Card Personal Expenses |
299 USD |
Corporate Card Transactions from Corporate Card Issuer |
949 USD |
Data in the preceding table is used in subsequent sections to illustrate how accounting entries are distributed for each payment liability.
Settings That Affects Payment Options
The following options available from the Payment Option choice list in the Create Company Account dialog box affect payment liability: Both, Company, and Individual.
How Accounting Entries for Payment Options Are Calculated
When an employee's expense report is exported to Payables, the amount of the payment request equals the amount due the employee.
The following table summarizes amounts owed by a company to an employee and the corporate card issuer based on the payment liability.
Payment Liability |
Expense Report Total |
Amount Due Employee |
Amount Due Corporate Card Issuer |
---|---|---|---|
Individual Pay |
1,150 USD |
1,150 US |
0 |
Both Pay |
1,150 USD |
500 USD |
650 USD |
Company Pay |
1,150 USD |
201 USD |
949 USD |
Accounting Entries for Individual Pay
Since the payment option is Individual Pay, a single payment request is created to reimburse the employee. It's the employee's responsibility to pay the card issuer.
The following table describes the accounting distributions for a corporate card with Individual Pay liability.
Account |
Debit |
Credit |
---|---|---|
Cash and other expenses |
500 USD |
Not Applicable |
Corporate card business expenses |
650 USD |
Not Applicable |
Employee liability |
Not Applicable |
1,150 USD |
Accounting Entries for Both Pay
With Both Pay liability, two payment requests are created, one to pay the employee for any out of pocket expenses and a second one to pay the card issuer.
The following table describes the accounting distributions for a corporate card with Both Pay liability.
Account |
Debit |
Credit |
---|---|---|
Payment Request for Employee Cash and other expenses |
500 USD |
Not Applicable |
Due to employee |
Not Applicable |
500 USD |
Corporate card business expenses |
650 USD |
Not Applicable |
Expenses clearing account |
650 USD |
|
Payment Request for Card Issuer Expenses clearing account |
650 USD |
Not Applicable |
Due to card issuer |
Not Applicable |
650 USD |
Accounting Entries for Company Pay
With Company Pay liability, a company can pay the card issuer at any time. The payment request for an employee is created when an expense report is approved and processed, while the payment request for the card issuer is created separately.
The following table describes the accounting distributions for a corporate card with Company Pay liability.
Account |
Debit |
Credit |
---|---|---|
Payment Request for Employee Cash and other expenses |
500 USD |
Not Applicable |
Corporate card business expenses |
650 USD |
Not Applicable |
Expenses clearing account |
Not Applicable |
949 USD |
Due to employee |
Not Applicable |
201 USD |
Payment Request for Card Issuer Expenses clearing account |
949 USD |
|
Due to card issuer |
Not Applicable |
949 USD |