How it works

How a purchase moves, step by step

Two paths end in the same ledger, and on the card path the decision comes before the evidence.

The card path

1. Company onboarded by the program manager under the bank's policy: KYB (checking who owns and runs the business), underwriting, a liability model (who owes the bank), a limit and settlement terms. What can go wrong: a decline or a smaller limit than asked, which can need a Reg B notice (telling the applicant why).
2. Card issued. Virtual cards work at once; physical ones ship. Controls attach: merchant categories, amounts per purchase, day or month, merchant lock, expiry, single use.
3. Authorized. Merchant, acquirer (the merchant's bank), network, then the issuer processor (which runs the card accounts for the bank). It checks balance, limit, card status and static controls, then gives the platform 2 to 3 seconds to approve, partly approve or decline. What can go wrong: a decline for limit or merchant type, or a timeout, where a default rule or the network's stand-in decides. This is the last chance to say no.
4. Held. The authorization holds part of the limit; hotels add incremental authorizations. What can go wrong: a hotel hold eats the limit and the next swipe is declined. Say an engineer checks in for three nights at $250: the hotel may hold $900 or more against a $1,000 limit, and the team dinner that evening fails.
5. Cleared. The merchant captures, usually within a day; hotels and airlines up to about a month later, sometimes for a different amount (tips, fuel, currency). On a charge card the bank's receivable starts here. What can go wrong: a late or forced capture posts after the card was canceled.
6. Matched. Receipt, business purpose, attendees and GL code attached. What can go wrong: no receipt; the receipt's name or total doesn't match the card line.
7. Approved. Manager for purpose, budget owner, finance audit if a rule flags it. What can go wrong: out of policy, and the employee owes the company.
8. Settled. The company pays the card daily or on the statement date; under individual liability the employee pays the bank and claims it back. What can go wrong: past due after a short grace period (about five days at one public platform, which charges off at 120 days).
9. In the ledger. A journal to the ERP with GL account, cost center and tax code (recoverable GST/HST, the 50% meals split); statement reconciled; period closed. What can go wrong: uncoded card spend at month end.

The out-of-pocket path

1. Employee pays with a personal card or cash. Their float starts, and so does any legal clock.
2. Captured: receipt photo, e-receipt or mileage log. What can go wrong: a lost receipt needs a signed statement plus corroboration.
3. Submitted. What can go wrong: late. Illinois expects claims within 30 days unless policy allows longer; the IRS safe harbor wants proof within 60 days.
4. Approved and audited, with a duplicate check against card lines.
5. Paid by ACH or EFT, in the next payroll, or by check. What can go wrong: payroll adds one to two weeks; an ACH return; a check never cashed.
6. In the ledger, coded like a card line.

The fastest quarter of companies approve and schedule a travel reimbursement in 3 days or less; the slowest take a week or more, according to APQC benchmarks reported in July 2023. Controls only work before the money moves; after that the product is collecting evidence, and the law wants the same evidence whichever path the money took.

Ways employees spend company money, compared

Rates are rough, as of October 2026, from Visa's US table. Rebates are benchmarks from filings and public contracts. The regulated debit and prepaid cap applies at issuers with $10B or more in assets.

Why do personal cards survive? The employee keeps the points, and the IRS doesn't tax personal use of business-travel miles unless they're cashed in. Large companies' bank programs, and the US federal travel card, still use individual liability. Each instrument settles who lends to whom: the bank to the company, the company to the employee, or the employee to the company.