Employee compliance with company card programs appears to be on the rise as companies hone their methods of mandating use of those programs, be they through reward, punishment or better integration with expense reporting tools.
Credit card providers for the most part reported increased volume in travel and entertainment transactions last year. While part of that was caused by increased travel costs and more travel, card providers said it also indicates that companies are having greater success in getting their employees to use their cards.
Higher usage rates are certainly in the companies' interest, said Heather Turk, executive vice president of commercial business development for Diners Club North America. The data that can be extracted from corporate cards has proven valuable as a negotiating tool with airlines, hotels and car rental companies. A study by Visa U.S.A. showed that companies with a card program in place were able to negotiate an average 26 percent discount from travel suppliers compared with a 13 percent discount for those companies that do not have a card program, she said.
"You're really talking about doubling the discount that you're able to obtain, whether that's through better negotiations through your suppliers or capturing more of the spend on your T&E product," Turk said. "That's a pretty compelling number of why mandates are so critical."
Strategies vary, however, on the best method of communicating that to employees. Policies may incorporate reward and punishment, with some companies reaching as far as to refuse expense reimbursement to those who spend using payment mechanisms other than the corporate card.
Tom Barrett, American Standard Cos. global sourcing director, said such draconian rules could be difficult for companies to enforce. "A company like American Standard is not going to battle with someone coming up and saying, 'You're not reimbursing me?' " Barrett said. "We lose those challenges all the time."
The answer can be found in the expense reporting process, he said. His company has fully integrated its payment system with accounts payable, so those who don't use a corporate card for such reasons as earning points on their personal cards are free to do so, but they'll have a more difficult time filing their expense reports for reimbursement.
"If you're not in that system, you're manually putting in all your information, so you've really got to want your points badly," Barrett said. "The program we have is really meant as a productivity tool."
It's a strategy that other travel managers have found effective as well. Bobbi Huber, director of corporate travel and meetings services for Federated Department Stores, said she saw compliance jump from below half to about three-quarters after Federated's expense reporting solution was put into place.
Corporate Solutions Group travel management consultant Bob Langsfeld said one of his corporate clients made that point by not requiring receipts if the corporate card was used but requiring receipts—even if the expense was only one dollar—if the card was not used.
Ron Sharer, director of corporate support services and facility operations for Ciba Vision Corp., said his company reinforces that strategy by scrutinizing those who report expenses outside the corporate card.
"We will end up reimbursing the employee in the end, but we're going to make it very difficult on them," Sharer said. "We're going to call them and we're going to e-mail them. We may even talk to their supervisor if they consistently don't use the mandated card."
Turk, however, said companies also should not discount the power of rewards programs in mandating corporate card usage.
The best method to boost compliance, Turk said, is to find a reward program that offers a variety of options for employees: not only such conventional choices as airline miles and hotel points, but other such options as a down payment on a car or paying for a child's braces. The program also should have options for employees who don't spend as much on travel, such as movie tickets and restaurant discounts, she said.
"Different things appeal to different people," Turk said. "The programs must be robust and compelling enough to drive behavior."
In addition to improving card compliance, a good reward program also could be a selling point for the company when trying to attract new recruits, Turk said. Because of the cost associated with these programs, however, even the best program won't be valuable in all circumstances, she said.
"It is not the right choice for every corporation, but it is absolutely a twist you should be familiar with," Turk said. "When you go out and do your request for proposals, you want to make sure you're evaluating a program both with rewards and without rewards."