Survey: Card, Expense Ties Cut Costs
The integration of corporate cards with expense reporting applications has yet to reach critical mass, but companies that have done so have reported significant annual savings, according to a Deloitte Consulting study commissioned by Visa Corporate Solutions and released last month.
The study examined several large and midmarket companies that have integrated their corporate cards in an attempt to provide recommended practices relevant to integration, said Laima Kardokas, who directed the research for Visa.
"They're getting to the point now where they want to automate the back end, which is the payment portion," Kardokas said. "Instead of paying or cutting a check or a draft to the employee for compensation for expense reporting, they want to automate that process and make it simpler for the employee."
The findings underscore card-integration benefits suppliers have touted. Companies with integrated programs reported process improvements and cost savings, including decreasing the time in which employees complete reports, a decrease in such manual processes as data entry in accounts payable and increased card usage, leading to a better view of travel spend.
In addition, the companies saw better compliance with travel policy because of the monitoring ability through reports. Employees also reported satisfaction with the move because of the ease of the reporting process and faster reimbursement, according to the study.
The benefits shouldn't be surprising because card integration is a combination of two best practices, said David Hillman, principal of Deerfield, Ill.-based Consulting Strategies.
Expanding on card integration at the National Business Travel Association's 2006 International Conference & Exposition in Chicago, BNSF Railway director of strategic sourcing Carol Devine, the immediate past president of NBTA, said her company realized about $500,000 in savings after integrating its Visa program with Concur's expense solution in 2003. Card volume increased by $2 million, cycle time decreased from four days to one day and rebates increased by 14 percent, she said.
The key to success, Devine said, was working with card issuer U.S. Bank and Concur, as well as launching a pilot program and maintaining regular communication with those first users during the pilot phase. It's also the vendor's responsibility to ensure the maximum value is there by automating control and compliance as well as providing actionable information, said Gelco Expense Management vice president of business development Ann Altepeter.