Spending by VISA/Mastercard or similar has increased over the years, as online purchasing has become more prevalent.
Of course this is a big topic generally but we thought we’d share our views on this commonly asked question. Based on our practical experience and industry best practice, Purpose suggests the following simple guidelines:
In terms of transparency and efficiency, the least optimal outcomes are:
- where many staff share cards; and/or
- where staff need to regularly use their own cards (out of pocket), for reimbursement later
These approaches create issues because:
- where cards are shared, missing receipts are far more common (as Admin and Finance teams do not know who to follow up)
- where staff are out of pocket, this can place an unfair burden on them, and the reimbursement process is more manual/time consuming
NFP Boards may be reluctant to extend cards, for fear of increasing the ability of organisational funds to be spent. This is a natural instinct. However, with reasonable controls over who is issued a card, there are several advantages. The transparency of bank feeds and efficient receipt management (through tech systems such as Dext Prepare), mean that transactions are so highly visible. Any unsubstantiated spending is quite discoverable.
We find that the preferred outcome is to have strong systems of individual responsibility, and cards in more Manager’s hands. As a minimum rule of thumb, a ratio of 1 card per 10 staff members is a good guide. For example, in an organisation of 25 staff, we could reasonably expect at least 3 cards. We offer this as a minimum, and higher ratios of cards to total staff can be equally as safe.
If you have fewer cards, you are likely to find practices emerging where cards are shared en masse to facilitate online and subscription purchases, with many missing receipts.