Company card

What it means

A company card is a debit or credit card issued on the business account to a director or employee for paying company costs: fuel, accommodation, software subscriptions, small materials or online purchases.

Compared with cash, its advantage is that every payment shows on the bank statement and there is no cash book to keep or advances to settle. The statement is not, however, an accounting document for the expense: each payment needs an invoice or till receipt showing what was bought.

A card can have limits, blocked merchant categories or no cash withdrawals. With several cardholders the bank records who paid with each card, which makes checking and allocating costs easier.

How it works in practice

The most work with cards goes into collecting receipts. We recommend a rule that cardholders hand in receipts by a set day after month end, ideally through an app that matches the receipt to the transaction. Unmatched payments at month end we go through with the client as a list.

A card payment for the director’s private purchase is not a company expense. If it is not repaid, it is booked as a receivable from the director or treated as a loan or a payout, with tax consequences. For entertainment, it must be clear with whom and why the meeting took place.

For card payments abroad for services such as advertising or software, invoices arrive without Slovak VAT. Even when paid by card, the tax must be self-assessed and a foreign-currency payment translated under the rules for exchange differences.

What to watch out for

The most common mistake is payments with no receipt. At year end dozens of transactions remain that nobody can explain. Such payments are not deductible, and at an audit the tax office may treat them as a hidden distribution of profit.

The second risk is weak internal control. If several people use cards without limits and nobody approves spending, misuse is discovered late. Limits, regular review of statements and clear rules on what may be paid prevent trouble.