<B>Charging Cost Ctrs.</B>
By Chris Davis
At the request of Andersen Consulting's corporate meetings department, Diners Club North America has developed a new product that allows corporations to assign to different cost centers specific transactions from meetings booked on its corporate card. Diners Club plans to offer the service to its other clients in the fall.
Andersen now has mandated the use of the Diners Club card for its 2,500 events in the United States each year, in an attempt to capture not only better meetings data for better negotiations, but also to streamline its complex meetings expense reporting and fulfillment methods.
"With our spending, it was obvious that we needed a better way to handle this," said Tom Keville, Andersen Consulting's director of global meetings and events. "We mandate next to nothing at Andersen. Usually we highly encourage or strongly suggest, but we are mandating this program. We may not achieve 100 percent compliance, but we will capture the vast majority of the information."
Given the relatively short time the program has been in place at the consulting company--it was rolled out nationwide in June--no penalties for noncompliance have yet been enacted.
The key components of the program allow Andersen to assign to different departments or cost centers specific charges of a meeting bill. To do that requires that multiple expense codes be assigned for a single meeting, and to roll up all monthly meetings expenditures into a single invoice for each department.
Previously, Andersen's 70 American planners would forward meeting bills, whether they were direct-billed or charged with a Diners Club or American Express card, to a central service center in Chicago, which would pay each individual invoice separately and seek reimbursement from the meeting host for each event. With the new Diners Club program, called the Electronic Event Account System, the corporate card company sends a monthly invoice directly to the service center, which can pay all meeting charges at once and seek internal reimbursement from internal meeting sponsors.
"Back then, we were filled with tons of invoices," Keville said. "We had meetings paid for with checks, with cards and with multiple cards for the same meeting."
So, he approached a few corporate card companies with the request to build a system that could handle his company's needs.
"Andersen Consulting came to us with specific needs," said Betsy Sonke, assistant vice president of corporate sales support technology at Diners Club. "They wanted to move away from paper expense reporting to ease planners' monthly processing and have one consolidated back-end feed into their general ledger system."
Andersen and Diners Club began developing specific solutions last fall. The process was complex, Sonke said, as representatives from Andersen's meeting planning, travel, technology systems and accounts payable departments all needed to be involved in the process, along with corresponding Diners Club managers. A pilot program was rolled out earlier this year, which went well, Keville said, with most required alterations to the program falling under design and ease-of-use issues. The full rollout commenced in June
Andersen Consulting, which ranked fourth on the 2000 list of BTN's Corporate Travel 100 (BTN, Aug. 28), can realize short-term cost savings in planners' processing costs as well as in the accounts payable area.
"We customize one general ledger file to fit their system format," Sonke said. "Instead of cutting many individual checks to hotels after direct billing, they can cut far fewer."
Longer-term cost savings will lie in the proper coding of meetings costs, allowing Andersen, a corporation that few outspend in corporate travel, to better capture all meeting expenditures and include them in negotiations with suppliers, instead of listing them in a department's general expenditures.
"We'll begin to see that effect next year," Keville said.
Competitor American Express offers all the functionalities proffered in the new Diners Club program, said spokeswoman Melissa Abernathy, but Amex has never taken the step of packaging them into a separate product.
"We let meeting managers pick their approach, and they do so in many different ways," Abernathy said. "They can consolidate meetings-related bills, split them among cost centers and allocate and sort charges by transaction type with our reporting product."
That said, American Express is developing specific meeting functionalities for its corporate card, for release soon, but Abernathy would not be more specific.
Diners Club now will offer a generic version of the EEAS to clients of its three-year-old Group and Event System, Sonke said. "We're going to make sure EEAS is fully functional on generic platforms before deploying it in the fourth quarter. We want to make sure the expense coding will connect on the back end to a corporate general ledger and ensure there are easy ways to customize to meet a client's group and meeting needs," she said.
While Diners Club is not as popular as a preferred card vendor among companies comprising the CT100, some of the companies that do use it responded favorably to the concept of the EEAS. "There's not a lot of companies out there that have a full handle on meetings expenses, and there's no system that can really break it down like that," said Mary Kay Bellersen, vice president of global travel management for New York-based Citigroup. "It would be easier to internally sell the concept of keeping meetings expenditures separate.