Since it paired automated expense reporting with a widely accepted global payment card last year, plumbing products maker Moen Inc. has realized savings from better cash management, higher rebates, efficiencies and more control over its travel expenses. The company now captures 94 percent of travel expenses on the card, significantly higher than the 70 percent that vendor JPMorgan Chase typically sees on corporate cards.
In a webinar sponsored by her card and expense reporting providers, Moen manager of financial services Rhonda Baracskai last week explained how the company's optimized card program developed over the past year. Both JPMorgan Chase and Gelco Expense Management cited Moen for implementating a "best in class program" covering roughly $10 million in annual travel spend.
A user of Gelco's expense tools since 1990, Moen two years ago selected JPMorgan as its new card provider. But the real power of this pairing became apparent only last year when Moen began using the online prepopulation, management, administration and reporting tools of Gelco's CardLink and JPMorgan Chase's PaymentNet.
Instead of entering expense data, employees now approve expense reports generated from charges that are automatically categorized according to the company's business rules. Gelco automatically reimburses employees for out-of-pocket expenses in three days and pays JPMorgan monthly to maximize float.
Prepopulating expense reports with charge card data "shifts the task for employees from entering all the data to reviewing," Baracskai said. "And that is a huge time saver for them."
Moen uses four modules of Gelco's CardLink product to automatically upload and categorize charge transactions on expense reports, require travelers to reconcile expenses within 45 days and restrict them from manually entering charges. "This is probably one of the most important aspects from a reconciliation standpoint," as it had "turned into a total nightmare" to reconcile the incorrectly entered data. The accounting department previously spent two days reconciling such entries, she explained. "These four things mixed together make the system basically goof proof," Baracskai said.
A fifth component of CardLink allows Moen's accounting team to run monthly reports on all outstanding charges that have yet to be reported on expense reports. The reports allow the company to post expenses in the proper periods "based on this report. The first month that we did that, it was about $300,000, so that was a significant improvement in recognizing expenses in the period in which they occurred."
Moen's quest for a more efficient card-expense solution began a few years ago as officials saw a need for a card with wider international and retail acceptance to meet the needs of the company's 900 travelers and 3,200 employees, Baracskai said. "That merchant acceptability was key to deciding which corporate card to choose," she added. The goal was to roll out "the most user-friendly and effective tool for travelers." The finance department also sought to enhance its internal audit procedures for Sarbanes Oxley compliance, lower administrative costs, gain access to real-time card data and increase usage to better leverage discounts.
Moen selected the JPMorgan Chase Visa corporate card, due in part to its experience serving other Gelco customers. "Implementation was wrapped up tightly. We basically were left to communicate the timing of all this to our associates," Baracskai said.
Moen informed employees of its new card program and the mandate to use it for business travel expenses "as part of a total policy rollout" communicated by the vice president of human resources. Accounting sent notes and reminders to policy violators at first. "We thought we would have a lot of that (resistance), but we did not. Even though employees may have lost miles (earned as they charged expenses to personal credit cards), they liked not having to monitor payments and use their own money to fund travel," Baracskai said.
Moen's finance and accounting team like the controls that PaymentNet's online administration provides to order new cards, check spending limits, research instances where cards are declined for payment and audit. From the transaction level to any hierarchy, finance has the ability to generate reports on virtually any aspect of the company's travel spending.
While Moen's new expense processes are automated, employees still are required to collect and submit receipts. "Management wants it on just about everything," she added.