When a company credit card is used, the transaction goes through three phases: The Accrual (automatic feed from the card issuer), The Expense (employee’s settlement in Acubiz), and The Invoice (the final settlement with the card issuer). The 3 steps:
- Step 1: The provisioning (The Automatic Card Feed)
- Step 2: The Expense (User’s Entry in Acubiz)
- Step 3: The Monthly Invoice (Settlement with the Credit Card Company)
Step 1: The provisioning (The Automatic Card Feed)
As soon as the transaction is registered by the card issuer, it is automatically imported into Acubiz as an provisional. The purpose is to immediately make the outstanding spending visible in the balance sheet, even though the receipt has not yet been processed.
Debit: Provisioned to operations (Balance Sheet account) – Expected expense
Credit: Accrued to creditor (Balance sheet or operating account) – Expected liability to credit card company/bank
Why? We know the money has been spent and that we owe it, but we don’t yet know the exact expense account (e.g., representation, hotel, or IT equipment).
Step 2: The Expense (User’s Entry in Acubiz)
When the employee opens Acubiz, adds their receipt, and selects the correct expense account, the expense is released to operations. The temporary accrual to operations is cleared.
Debit: Expense account (Operations) – e.g., Hotel or Representation
See also the derived flows: Cash withdrawal on company credit card: and Private purchase on company cardCredit: Provisioned to operations (Balance sheet or operating account) – Counter entry to Step 1 Debit
Why? The expense is now correctly placed in the income statement, and the “Provisioned to operations” account is zeroed out (offset) for this specific transaction.
Step 3: The Monthly Invoice (Settlement with the Credit Card Company)
When the total monthly invoice or PBS withdrawal is received from the credit card provider (e.g., AirPlus, FirstCard, or similar), the final liability must be posted and paid. The temporary accrual to creditor is cleared.
Debit: Provisioned to creditor (Balance sheet or operating account) – Counter entry to Step 1 Credit
Credit: Credit card provider (Collective creditor/Bank) – The actual liability/payment
Why? The temporary liability in the balance sheet (Provisioned to creditor) is closed, and the entry is moved to the actual creditor, who is paid via the bank.
How to set up the correct accounting entries in Acubiz for the above setup
See explanation of the different Acubiz flows
Derived Flows
There may be derived flows for common expenses explained below
Cash Withdrawal on Company Credit Card:
Cash withdrawals are typically made in situations where card payment is not possible. In Acubiz, a cash withdrawal is registered and handled as an advance salary paid to the employee.
The Principle: From Expense to Receivable (Employee Debt)
When the transaction arrives in Acubiz via the automatic feed (Step 1), the accrual happens exactly as usual: The money has been charged to the card, and the company owes the amount to the card issuer.
| ℹ️ Step 1: The Accrual (The Automatic Card Feed) and Step 3: The Monthly Invoice (Settlement with the Credit Card Company) remain unchanged! |
It is only in Step 2, when the employee must settle the transaction, that the derived flow is activated. Instead of selecting an expense category (e.g., "Travel expenses"), Acubiz automatically selects a system account called "Cash withdrawal on company card". Accounting-wise, the posting is now moved away from the income statement (operations) and remains in the balance sheet as a receivable between the company and the employee.
Step 2: User’s Registration of Cash Withdrawal
When Acubiz marks the spending as a cash withdrawal, the debit posting changes. Instead of an expense account, the company’s receivable from the employee is debited. Typically, one of two methods is used depending on the company’s payroll system and ERP setup:
| Method A: Employee Intercompany Account (Payroll Deduction) | Method B: Employee Creditor (Collective Account) |
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This method is most often used if the amount is automatically deducted from the employee’s next payroll payment.
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This method is used if the employee must repay the amount back to the company via bank transfer, or if intercompany accounts are settled manually.
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| How is the intercompany account closed (Step 4)? | |
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When an employee withdraws cash for business purposes – for example, during a business trip – the withdrawn amount is considered an advance salary and thus a debt to the company. The employee is obliged to document all expenses incurred. This is done by continuously registering expenses as reimbursements and attaching valid receipts, after which the amounts offset the employee’s outstanding debt. Missing documentation: If there is a remaining amount that cannot be documented with relevant receipts, this is considered an outstanding balance with the company. Below are options for final settlement | |
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When payroll is run, the balance from the intercompany account is transferred to the payroll system. The employee receives less salary, and the account is zeroed out:
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When settling balances on the employee creditor account, any outstanding balances can be handled in the following ways if the employee owes the company money:
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How to set up accounting for cash withdrawals on company credit cards
Private Purchase on Company Card
The Principle: From Expense to Receivable (Employee Debt)
When the transaction arrives in Acubiz via the automatic feed (Step 1), the accrual happens exactly as usual: The money has been charged to the card, and the company owes the amount to the card issuer.
| ℹ️ Step 1: The Accrual (The Automatic Card Feed) and Step 3: The Monthly Invoice (Settlement with the Credit Card Company) remain unchanged! |
It is only in Step 2, when the employee must settle the transaction, that the derived flow is activated. Instead of selecting an expense category (e.g., "Travel expenses"), the employee selects a specific category in Acubiz called "Private purchase on company card". Accounting-wise, the posting is now moved away from the income statement (operations) and remains in the balance sheet as a receivable between the company and the employee.
Step 2: User’s Registration of Private Purchase
When the employee marks the purchase as private in Acubiz, the debit posting changes. Instead of an expense account, the company’s receivable from the employee is debited. Typically, one of two methods is used depending on the company’s payroll system and ERP setup:
| Method A: Employee Intercompany Account (Payroll Deduction) | Method B: Employee Creditor (Collective Account) |
|
This method is most often used if the amount is automatically deducted from the employee’s next payroll payment.
|
This method is used if the employee must repay the amount back to the company via bank transfer, or if intercompany accounts are settled manually.
|
| How is the intercompany account closed (Step 4)? | |
|
When payroll is run, the balance from the intercompany account is transferred to the payroll system. The employee receives less salary, and the account is zeroed out:
|
When settling balances on the employee creditor account, any outstanding balances can be handled in the following ways if the employee owes the company money:
|
How to set up accounting for private purchases on company credit cards
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