The more spending that corporations capture through their
corporate card program, the better the data and the reconciliation, and the
greater the benefits, according to a survey and assessment of card best
practices conducted by the Association of Corporate Travel Executives and Citi.
What are the traits of high-spend-capture organizations? In
companies that capture at least 75 percent of travel and entertainment spending
on a corporate card, finance/treasury and procurement departments most often
owned the corporate card program with travel as a distant third, according to
115 qualified respondents to an online survey fielded last fall. (Only
respondents who said their companies captured a minimum of 25 percent of
T&E spending on a corporate card were considered in the results.) At
companies that captured less than 75 percent of their T&E on the card, half
of the respondents said card programs were owned by travel, one-third said
programs were owned by finance/treasury, and the reminder said procurement or
human resources. Nearly 70 percent of responses were from companies
headquartered in North America, with other responses from Europe, the Middle
East, Africa, Asia and Latin America.
Among those that captured 75 percent or more spending on the
card, nearly 60 percent said they had a centralized, standardized global policy
implemented across their entire organization. Respondents who captured less
spending on the card were more likely to have regional or decentralized
policies.
Policies With Teeth
At companies that captured the highest spending on the card,
nearly half of respondents said noncompliance is reported to line managers,
more than 30 percent said noncompliance results in revoked card privileges and
about 20 percent don't reimburse expenses outside policy. After follow-up
interviews with respondents, ACTE and Citi noted that "many
high-spend-capture organizations said their policies use tone and wording that
convey a high expectation for compliance without using the term 'mandate.' "
Rather than react in a punitive manner, "many travel managers and their
companies viewed noncompliance as an opportunity for communications or
re-education."
At companies that captured less of their T&E spending on
the card, more than 30 percent of respondents said there were no consequences
of not complying with policy. About 30 percent said their companies reported
policy violators to line management.
"The group with the higher-tier spend capture is
focused on data integration as a key priority in the next year," according
to the study. "The lower-capture group is mainly looking at reconciliation
processing, a basic utilization of card data in the managed corporate program.
The inability to optimize data capture inhibits the lower-spend-capture group's
success in maximizing the value provided by the card program." The
higher-tier spend-capture group also indicated much greater reliance than
others—nearly 80 percent of respondents—on card data to monitor compliance,
negotiate better rates with key suppliers and prepopulate expense management
systems.
Ways To Boost Spend
Capture
ACTE/Citi recommended the following tactics to capture the
largest possible portion of T&E spending on cards:
Secure a senior management champion with influence across
the enterprise to sponsor the program and communicate policy.
Define and communicate a standard expense policy with stated
consequences for noncompliance.
Implement a T&E program with the traveler at its center
that provides consistent and supported experiences.
Continuously communicate the benefits the T&E program
brings to all stakeholders. "One travel director from a global 500 company
emphasizes the enhanced safety and security aspect that T&E card usage
brings in cases of crisis management, as well as the savings accrued to the
company and travelers."
Use expense policy noncompliance as an opportunity to
communicate the program's benefits to employees.
Prescribe a preemptive process for travelers to follow in
cases where card acceptance is low, such as with restaurant charges.
Integrate T&E cards with other travel tools to increase
seamlessness for travelers.
Use providers' analytic tools and consultative services.
Work with providers' merchant acquisition processes to
increase merchant acceptance among your program's heavier-spend vendors.
This report
originally appeared in the February 2012 issue of Travel Procurement.