Buyers Seek To Play Cards Right

BTN's Jay Boehmer last month discussed corporate card programs with Connie Cirillo Freeman, Pitney Bowes director of global travel management, and Michelle Lee, managing director of Credit Suisse First Boston's internal client services group—both American Express users—and Steve Quincel, American Electric Power manager of employee expenses, who manages AEP's MasterCard one-card program.

BTN: How important is card singularity to your global program?

Michelle Lee: We believe building strong regional programs is a critical component to leveraging the global strength that we need, but Credit Suisse First Boston also mandates policy compliance, which is a key factor in our ability to control spend and deliver on our commitments to suppliers. The benefits of having one source for T&E expenditures are that it provides the information we need to use in our negotiations and the confirmation that is critical to ensure we are controlling our spend and driving marketshare. Our card program mirrors our travel policy, which is also very strongly mandated. For example, our out-of-policy percentage for our global airline spend is less than 2 percent, which has been approved in advance of travel and ensures that it is out of policy for a solid reason.

Steve Quincel: Since we are primarily a U.S.-based company and most of our operations are here, we have one card rolled out throughout the company. We do have some employees on special projects in other countries, and those expatriate employees have our U.S. dollar-based card. We have some operations in the United Kingdom—several hundred employees are there—but they do not have a card program yet. They use their personal cards and are reimbursed.

Connie Freeman: We are a global company, but we have different cards in different regions.

BTN: Are you seeking to drive more card program consistency across regions?

Freeman: Over time. It's been a goal, and something that we're trying to make happen. When you have different kinds of businesses, it takes time to integrate those acquisitions into a single program.

BTN: Do disparate card programs make it difficult to combine data?

Freeman: That does become a challenge. We take the agency data, the card data and at a high level we're able to make the types of assessments that benefit the program. We're small enough that we can do that.

BTN: Steve, please tell us how you tied T&E and procurement together in a one-card program.

Quincel: We figured we should put these things together and run that through one expense management program and make it easier on everyone. We also had people who were carrying multiple cards: They had their procurement card and T&E card and in some cases people had several procurement cards, depending on whether they conducted business for several of our units. We turned that around with our one card. However, it does not include fleet. There's a negative impact on our rebate if we include fleet in the program, so we opted to leave our fleet card alone since it is assigned to the vehicle and not the individual. In our prior program, we had a rebate system for our T&E card but not for the procurement card. When we coupled them, we kept the rebate and were able to capitalize on it on that side.

BTN: How do you maximize rebates?

Freeman: Basically, it is about managing delinquency and making sure they use the card. The other thing we had to do is maintain the card base with active cards, because it's definitely a negative when you have inactive cards. This past summer we canceled people's cards that were not in use. We decided not to couple the two into one program, in case we decide not to go with p-card for the long term in terms of our overall purchasing strategy. We felt it gave us more flexibility not to tie the two together.

Lee: We also have been focusing on doing everything possible to expedite payment and aggressively manage that with our cardholders. As a result, we have experienced an increased performance with our rebates.

BTN: Online account maintenance tools have gained some traction in the past few years. Do you use these capabilities?

Freeman: We definitely use Amex @Work, and it's very effective. It's fairly easy to get to the basic information you need and, for the people who are more astute, we can run the kind of reports we need very quickly. They can download and manipulate the files. It works very well. Two or three times a week, something will come up that I'll have to look up. Formerly, I would have to call our account manager. Now, the corporate card administrators go on it much more often.

Lee: It is an excellent tool. We have a Web-based program with policies that we effectively use. All of our cardholders have access to it at some level. We estimate that about 50 percent of them use it regularly.

BTN: Connie, how many of your cardholders use the tool?

Freeman: I don't know, but I'm sure it's a high percentage because we get far less calls. I'm still picking up the phone for certain things, but in terms of someone's account status or looking at vendor reports I can do that myself.

Quincel: We do it primarily for reporting. We have a separate expense management tool that isn't available to our cardholders, but we use it for administrative purposes. We're probably in there everyday looking at one thing or another. It's good to an extent, but the problem we have is that we can't do ad-hoc reporting. That's the one area that we found lacking by what's provided by our card issuer and MasterCard.

BTN: Are any of you receiving hotel folio detail?

Lee: We see this initiative as key to the effective management of our hotel program. However, it has been discussed for years and we've yet to see any result. We currently utilize pre-trip reports and post-trip booked data from our agency. The information that comes from the card program is actual data. However, we need to see the breakdown of the hotel folio to provide more relevant negotiation points.

Freeman: Definitely.

Quincel: We've not seen that data yet. We've seen the level three data coming through on the procurement side, but not on the T&E side.

BTN: We've heard rumblings from MasterCard saying that they're working on that.

Quincel: I've heard that too, but we haven't seen any detail.

BTN: It's on your wish list?

Quincel: Definitely. If we had that kind of information coming through on a file feed, we could get rid of the hotel receipts that we have to maintain.

BTN: Do you have any interest in using a meeting card?

Lee: We do manage travel and events among other areas and what we've done is ensure we have direct billing with hotels. Depending on the size of the event, we don't want $500,000 on someone's individual card for obvious reasons. We'd be open to looking at it, but we've found that we don't have a need for it.

Quincel: Our travel manager is also our meeting planner. We don't have anyone with a specific card for a meeting. Things will just be set up and charged to the card of whomever is responsible for the meeting. They'll be responsible for assigning the accounting classification to those expenses.

Freeman: We do have a meeting card, but we don't use it for large meetings. Those are centrally billed. For small meetings, we just implemented the card last spring to get a handle on what our small meeting and group activity was. We were getting a lot of $2,500 or $5,000 bills after the fact. That was another part of the policy that we put in place in April, where anyone doing any meeting had to come through travel so we could advise them to use the hotels we have rates with. We have an electronic online purchasing system, which ensures the proper approval. In procurement, we decide whether it should be a purchase order-based transaction or if it should go back to the meeting card. We've had significant activity.

BTN: Is it one card?

Freeman: Right now, it's one card that the commodity specialist in our group has. Ultimately, we're going to move the administration of it to the people who handle corporate card and p-card administration.

Lee: The CSFB policy requires that all conferences, events and meetings with spend of $5,000 or more be booked through our corporate events department. This is mandated globally and ensures we can effectively implement policy and provide consistency with the CSFB brand in all countries.

BTN: Connie, is the meeting card effective for that $5,000 and under spend?

Freeman: Definitely. Then at least you'll have some consolidated information. This is another area of spend management that we're trying to get a handle on. And I would say it's one of the last frontiers for us.