John Tangredi, president of Insperity's Expense Management
division, recently fell asleep by his pool and woke with sunburned skin because
he hadn't applied sunblock. The experience made him realize that the difference
between managing expenses and controlling expenses is much like the difference
between putting on sunblock before sun exposure or treating it with aloe vera
after the burn.
"I did expense management, instead of expense control,"
Tangredi quipped. "The analogy is similar to what most businesses do. It's
easier to hope you don't get burned and if you do, put the aloe on and hope it
doesn't happen again."
To help corporations not only manage spending but also gain better
control over it, Insperity this week officially made available the Insperity
ExpensAble Plus MasterCard, a rechargeable debit card.
"A lot of times [corporate credit cards] have no
spending limits and very little control, or [organizations] have employees use
their own personal cards, which give the company even less control,"
Tangredi said. "The ExpensAble Plus MasterCard allows for control because
the card can have money allocated on or taken off in real time."
With Insperity's latest product, companies can issue the
debit cards to employees for an average monthly charge of about $5, depending
on the estimated spend a client will make on the card. Employees can request
funds for trips through a mobile app or web portal. Once a manager approves the
trip, funding is loaded on the card within 30 seconds for such purchases as
lodging expenses, meals and car rentals.
The cards are integrated with Insperity's expense management
tool. "We spent a lot of our engineering time making sure that we fully
integrated this so information seamlessly flows right across into the expense
report automation system," Tangredi said.
The cards also give corporations flexibility to provide more
money than the employee would need or to set a threshold at which the cards
reload automatically.
Insperity is in discussions with MasterCard to develop some
type of incentive associated with the card. However, Tangredi was careful not to
call it a rewards program.
"Rewards incentivize the end user to spend more money,"
Tangredi said. "We're not sure that's the best behavior to incentivize
employees. We want them to really be thinking about the right thing to do for
the company. We're working with MasterCard to put something together that will
benefit everybody, but we don't have the details yet."
The card likely will not have an associated rebate program, which
credit cards typically offer. Tangredi suggested that rebates, which usually
return about 3 percent on spending, become less important as companies realize
savings by using the debit card.
About 35 Insperity customers have been using the cards since
the beginning of the year. When combined with the expense management automation
system, some customers have saved between 20 percent to 30 percent on annual
spend, according to Tangredi.
"To contrast, when the [expense management] system is
used without the card, the savings are not as significant," Tangredi said.
"It's the total solution that produces the significant savings."
Will these new cards completely supplant traditional
corporate card programs? Probably not. But they give companies another payment
option and the means to control spending.
Tangredi said that in 2008 "almost 80 percent of
spending that was processed through our expense management system was done on
corporate card. If you look at 2012, that's down to less than 50 percent."
Instead of cards, some of those clients are using cash advances and personal
cards for payment, he said.
Tangredi also noted that recent college graduates often don't
have credit cards and "don't want anything to do with them. Companies are
going to need a solution for those individuals, and I think you'll see debit
cards become more mainstream in the corporate culture. That's one of the
reasons we needed to come up with another solution and provide something else
for companies to give their employees."
Tangredi said one Insperity employee already using the
ExpensAble Plus MasterCard commented that the procedure is reminiscent of
asking a parent for money. Conveying the employee's sentiments, Tangredi said,
" 'Because I have to ask up front, I'm really thinking through decisions
before I ask for funds.' "