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06 July 2020

Business card for legal entities: features of use, accounting

A business card is one of the main payment instruments for legal entities. It allows you to carry out business operations in a convenient way, helps to avoid risks and costs that arise in connection with the use of cash. You will find answers to the main questions related to this tool in the material.

Who can be issued a business card?

A business card is issued by both the director and the company's proxies. If the card is drawn up for a specific person, it is impossible to transfer it to another person without amending the contract with the bank. If such a person is not indicated, then the order of the company may determine the list of persons who are entitled to use the Business Card. You can initially identify several proxies in the name of which several Business cards will be issued, and operations on them can be reflected both on one account and on separate sub-accounts.

What are corporate cards?

The Bank issues only corporate debit cards to legal entities (hereinafter referred to as the Business Card), unlike FLPs that have the ability to issue a “credit card”. In addition to the hryvnia, companies are available business cards in dollars and euros.

For what purposes can I use a business card in Ukraine?

A business card helps to simplify many business operations:

- avoid cash transactions and associated costs and risks,

- reduce the amount of reporting documentation,

- saves time and helps control employee costs.

A business card can be used in the calculations:

1. on a business trip, including abroad. It can be paid for:

- registration of foreign passports, visas, insurance, other documented expenses associated with a business trip;

- booking and buying tickets for a train, bus, plane, airport transfer, baggage, transport rental;

- accommodation in hotels (motels), rental of conference rooms, meals in restaurants, other expenses associated with the organization of a business trip;

2. for the purchase of necessary goods, materials, components, ingredients, raw materials, etc. necessary for the activities of the company;

3. participation in exhibitions, conferences, seminars, hospitality expenses;

4. expenses for payment of communication services, postage, utilities;

5. the cost of renting premises, cars and equipment;

6. transportation costs and other expenses associated with the activities of the legal entity.

What operations are prohibited?

It is unacceptable to carry out using a corporate card:

 - receipt and payment of wages and other social benefits;

- Settlements under foreign economic contracts, with the exception of the points described in the next question;

- investments outside Ukraine.

For what purposes can I use a business card abroad?

The business card makes it possible to pay the full range of travel expenses (the standard list is in the question “For what purposes can I use the business card in Ukraine?”, Paragraph 1). The main thing is that these should be documented expenses associated with the purpose of the trip. The current legislation has not established restrictions on the amount of expenses. The only per diem is regulated by law. It cannot exceed 80 euros for each calendar day of the trip at the hryvnia to euro rate established by the NBU (clause 170.9 of article 170 of the Tax Code of Ukraine (hereinafter the TCU). The exact amount is determined by the order for the enterprise and directly in the order for the employee’s business trip.

It should also be noted that starting from 04.04.2019, cards issued in foreign currency can be settled with non-residents under a foreign trade agreement. Provided that payment under one agreement on one business day will amount to a small amount (paragraph 2 of paragraph 109 of the Regulation, the text of which is available here). The size of the insignificant amount until April 28, 2020 was the equivalent of UAH 150,000, and from this date - UAH 400,000.

Are there any withdrawal limits?

Currently, there are no restrictions on the amount of funds that can be transferred to the Business card from the account of the enterprise. But on the withdrawal of cash from any card from 04/28/2020 a restriction was introduced. One time can be withdrawn no more than 4999 UAH, while the total amount of funds withdrawn can be significantly more - within the limits set by the bank and the enterprise itself.

Can a business card pay for goods, services for their own needs?

It is impossible to use the Business Card either for the manager or employee of the company for personal needs, since the money on the card is the property of the enterprise, despite the fact that the card can be issued in the name of a particular employee. For all the funds that will be withdrawn from the card in cash or used for cashless payments, he will definitely have to report to the accounting department.

What are the rules for reporting the use of a corporate card?
The use of funds from a business card of a legal entity is the issuance of funds sub-report. Therefore, the employee must provide an advance report within the time period specified in clause 170.9 of Art. 170 GCC. The advance report is prepared in the form approved by order of the Ministry of Finance dated September 28, 2015 No. 841 as amended on March 10, 2016 No. 350. Together with it, the employee must provide primary documents confirming the expenses incurred, namely:
- settlement documents (cashier's check, sales receipt, settlement receipt, travel document, etc.) confirming the fact of the acquisition of goods / provision of services;
- documents confirming the fact of cashless payment using a Business card (terminal receipt, ATM, slip and other documents).
When paying via the Internet or in other remote service systems, the settlement document is issued in electronic form by the system itself, it is enough to print it.
Terms of preparation and submission of an advance report to the accounting department of the enterprise:
- for expenses on a business trip, if cash was withdrawn from the card - within three days after the end of the business trip (paragraphs “a”, paragraph 170.9.3 of Article 170 of the Tax Code), if expenses were paid exclusively in non-cash form - no later than 10 banking days after graduation. If there are good reasons, the manager can extend up to 20 banking days (subparagraph “b” subparagraph 170.9.3 of article 170 of the TCU);
- payments for goods and materials not on a business trip - until the end of the 5th banking day following the day on which payment was made (paragraph 170.9.2 of article 170 of the TCU).
Nuance. If an employee of the enterprise replenishes the corporate account with his own cash, in order to receive compensation (money back), he is obliged to report to the accounting department for the money deposited into the account. To do this, he needs to submit an application of any form and attach a document confirming the replenishment of the card (check of the PTKS terminal or a check received from the bank teller, if the money was deposited through the bank cash desk).
What documents govern reporting on the use of a business card?
Business accounting, incl. cash flow using Business cards is conducted in accordance with the requirements of the Law of Ukraine of 16.07.99 No. 996-XIV “On Accounting and Financial Reporting in Ukraine”, the National Accounting Regulations (Standards), corresponding to the orders of the Ministry of Finance.
Should a company provide any tax reports?
The bank informs the tax authority about opening an account. No special reports on the movement of funds on the card account or on the Business card to the tax are required. Neither separately nor when filing tax reports for the period. The same applies to financial and statistical reporting, reporting cash flows. But none of them reflects the use of Business Cards as separate indicators. That is why there are no deadlines and form for providing such reports.
Is the card reflected in accounting for cashless and cash transactions?
The accounting provides for separate accounting of cash flows for non-cash and cash transactions, both using Business cards and without them. For this, appropriate accounting accounts are provided (in more detail below). It is for the organization of this accounting that settlement documents are used that confirm the form of the operation (cash or non-cash), the date of its operation and the amount.
How to reduce an advance report to an accountant if inappropriate operations were carried out from a corporate card?
If the expenses on the card were not related to the economic activities of the enterprise, then the employee or manager must return the amount of such expenses to the cashier of the enterprise. Moreover, even if the employee, having spent the money in a targeted manner, presents an advance report without settlement documents, he will have to reimburse the company for all expenses incurred by him (return the money to the cashier). If you do not require the employee to return all the funds or he refuses to return them, then this amount is included in his taxable income of the month in which the expenses were incurred, and is subject to personal income tax and military duty. Accordingly, these funds will not be allocated to the expenses of the enterprise. Initially, in accordance with the expense report, they will be listed as the employee's debt to the company (according to Dt 372). If the employee returns the money, the debt will be closed (Dt 301 (313) and Kt 372).

What are the nuances of accounting for transactions in foreign currency?
The costs of a foreign trip when calculating with a Business Card are reflected in accounting records according to the date of payment for goods (services) and / or the date the currency was withdrawn at the NBU rate at that date. There are no other features.
An example of an accounting transaction Dt / Ct for maintaining corporate card accounting.
In accounting, funds deposited on the Business Card are accounted for on a separate subaccount 313 “Other bank accounts in national currency”. Write-off of funds from the current hryvnia account of the enterprise and their transfer to the card account is reflected by posting Dt 313 - Kt 311. Posting of goods and materials purchased with the Business card or the Key to Account card is carried out on the date of submission and approval of the advance report based on attached to it primary and settlement documents. To credit the assets received to the balance sheet, depending on what was purchased, the appropriate accounts are used:
Dt 20 "inventories";
Dt 22 "Low-value and wearing items";
Dt 28 "Goods" in correspondence with the account of CT 372.
Example:
06/06/2020, the company transferred 10 000 UAH to the Business Card and issued it to an employee for the purchase of office supplies.
06/07/2020 the employee purchased in the store and paid through the payment terminal stationery in the amount of 6600 UAH (including 20% VAT - 1100 UAH).
06/08/2020, the employee submitted to the accounting department of the enterprise an advance report approved by the head, to which the fiscal cash register check of the cash register and the receipt of the payment terminal are attached.

Accounting for the acquisition of goods and materials using a PDA

№ p/p
The content of the business transaction
Account Correspondence
Сумма, грн
Dt
Кт
1
Перечислены денежные средства с текущего счета предприятия на его карточный счет
313/1
311
10000
2
Отражено списание денежных средств со счета в оплату стоимости канцтоваров на основании выписки банка
372
313/2
6600
3
Оприходованы канцтовары
(составлен авансовый отчет)
22
372
5500

Отражен налоговый кредит по НДС
644/1
372
1100
641/НДС
644/1
1100

Каким справочником корреспондентских бухгалтерских счетов пользоваться для ведения бухучета по Бизнес-карте?

Бухгалтеры пользуются планом счетов и инструкцией по его применению, утвержденными приказом Минфина от 30.11.99 г. № 291 с изменениями и дополнениями, который вы можете найти по ссылке.