Small and midsize businesses are increasingly moving toward corporate card consolidation as business owners look to get better information and control over travel spending, according to two separate surveys by American Express and Visa.
American Express' CFO Research Survey, which gathered information from 353 executives at mostly midsize firms, indicated that 53 percent planned to focus on controlling travel and procurement costs this year. Visa's Small Business Cash Management Survey, which collected the responses of 468 owners of businesses with sales of less than $25 million, reported that the same percentage listed financial planning and budgeting as their top concern.
The surveys also indicated that corporate cards are playing a bigger role in spend management. Visa's survey showed that 45 percent of business owners would make all of their purchases using a business payment card, if possible. Corporations used cards for 65 percent of their purchases, up 9 percent from last year, said Raghaz Lal, Visa's senior vice president of small business products.
"There is a larger trend of realization that card and card payment products offer greater cash-flow efficiency to small businesses," Lal said. "Small business owners are starting to consolidate and put together a lot of their daily purchases onto a credit or debit card."
This follows the trend of larger corporations moving toward multinational consolidation with a single card
(BTN, Feb. 6).Walter Jackson, regional vice president of business development for American Express Global Corporate Services, said the financial benefits from card usage—including savings from card rebates and the ability to insure travelers—are part of the reason for the increased move to card consolidation.
The cards also are a solution to one of the top concerns for such business owners, Jackson said. About two-thirds of executives in the American Express survey said "gathering, analyzing and using information on company spending" was one of their top challenges in managing expenses. Half said that tracking such patterns was highly important in controlling spending.
"The consolidated card actually gives them the ability to have a greater spend visibility," Jackson said. "There's a number of different places where you can get data from spend with a corporate card program."
Some card providers have begun focusing on helping smaller businesses with their data collection. American Express, for example, announced last month that it had enhanced its online reporting tool for businesses with $10 million or less annually in travel and entertainment spending.
Called Information @ Work, the enhanced package changed the static format of its e-mail-based reports into flexible formats of PDF files and spreadsheets, also allowing for more detailed reporting, American Express vice president of global corporate card marketing Shelle Santana told Business Travel News upon the product's announcement.
For example, a corporate travel manager could look at specific restaurants that employees were frequenting during travel, according to Santana. The enhanced package came at the demand of the card's small-business customers, she said.
"We took a step back, and we responded to the feedback we got directly from customers," Santana said. "We took the power of the information, distilled it down to the must-have or need-to-know for our clients and delivered it in a way that's user-friendly and much more flexible."
American Express' Jackson said it all indicates that smaller businesses are using corporate cards to quickly catch up to the corporate giants in managing their expenses. He was impressed by their methods at a recent presentation in Orlando, he said. "It showed me that midsize companies are becoming much more sophisticated," Jackson said. "They've recognized the process-improvement segment."