Profiles In Travel Management: Payment Tool Cuts Copier Co.'s Paper(2)

Office equipment supplier Ricoh Americas saved hundreds of thousands of dollars after overhauling its corporate card program by streamlining and automating card management processes, garnering more transaction rebates, and insuring and consolidating spending data.

Ricoh's 2005 selection of JPMorgan Chase as its card vendor also gave it more accurate transaction data, increased supervision over card misuse and fraud, and helped it harness its fragmented meetings spending.

"We always knew that the money was there," said Maria McSorley, Ricoh Americas manager of corporate travel and special events. "When I started looking at what we had, I knew that it was an opportunity to create a revenue stream, which we really did not have."

Ricoh's corporate travel department administers the card program for 800 U.S. cardholders with an annual T&E card spending of $20 million, including $13 million in U.S. booked air volume.

After automating its paper-based card management system, it streamlined reporting and approval processes and saved three business days per month on the card application process. "We really know where things are when they've been processed, so that has saved a lot of time," McSorley said. "We also are able to look at delinquencies and manage spend. The reporting piece really made JPMorgan Chase stand apart from the other vendors."

As Ricoh's T&E card program spending increases—dollar volume has doubled in the past eight months, according to McSorley—it continues to generate more savings from rebates garnered from each card transaction. "It has been great coming from a program that generated no revenue to a program that has generated a very nice chunk of change," McSorley said.

Ricoh also was able to cut back on card misuse by installing an electronic approval process and leveraging reports from JPMorgan Chase. "They are very in tune with what our normal T&E spending is and when something jumps out, we get contacted right away," McSorley said. "Internally, the electronic approval process has really helped us a lot because our policy is very clear that it has to be someone who is vice president level or above who approves the card, so there is a lot more control there. We make sure the individuals understand what the card is for, and even though this is company liability, failure to use the card appropriately can result in personal liability."

Ricoh went live with the JPMorgan Chase Visa card in November 2005 following a six-month sourcing effort, which led to the transition from the incumbent American Express corporate card.

"We looked at vendors that we already had a relationship with and tried to leverage that relationship," McSorley said. "We also looked at what we could bring back to the corporation and at the company's spend in other areas. We wanted to play it safe and not overcommit ourselves to something that we didn't know what we were going to get back. It has been a very successful program. It has so much more potential to grow too. We are constantly looking at new opportunities within the organization. After the end of year one, a lot of people opened their eyes and said, 'Wow, there is something here.' "

Senior-level buy-in was instrumental in driving compliance in the nonmandated, but promoted, program, according to McSorley, who targeted such departments as human resources and finance for input and approval in a cross-departmental sourcing effort.

"Initially, when I put this program together, I targeted the finance group, the human resources group—everybody that could have been big opposition and could have been a big supporter, and we got the go-ahead to do it."

Meanwhile, Ricoh developed a meetings card program with JPMorgan Chase, which enabled the reporting of the company's previously untracked meetings expenditure.

"In the past, a lot of individuals who worked on meetings were processing a lot of check request forms," McSorley said. "A lot of times, the expense wasn't going down as a meeting card expense. It's been challenging for us to say how much we spend on meetings."

Operating departments within Ricoh now carry individual meetings cards, which have yielded enhanced reporting and tracking of meetings expenditures.

"As the need arises, we've set different departments up with an individual card that's coded for their department. They manage the account and process the payments," said McSorley, adding that the company assumes liability over each department's meetings card.

Card liability is critical for Ricoh. The West Caldwell, N.J.-based firm opted for a "joint and several" liability format, which shields the corporation from bearing sole responsibility by invoicing cardholders directly from JPMorgan Chase. Ricoh bears liability if the account is 60 days past due. Ricoh also enlisted standard industry liability waiver insurance, which guards the company against employee misuse, as well as transactions that have been reimbursed to the cardholder without being paid to the bank.

"A lot of the senior managers were concerned with the liability and where it fell and based it on other programs they had worked with, whether at this company or elsewhere," McSorley said. "They felt they had gotten stuck with the bill, so they were afraid to open up the can of worms."