If there's one thing we've all learned the hard way during this pandemic, it's how labor-intensive current corporate payment processes are. Companies are, more than ever, suffering from a lack of visibility when it comes to business expenses.
This makes it difficult for them to prioritize speed, security and transparency when optimizing their current corporate payment processes.
Implementing a Corporate Card Program might just be the answer to simplifying, saving money and preparing for the post-pandemic era. But why? And how?
To answer your questions, we've summed up the top five reasons for setting up a Corporate Card Program.
You may recognize yourself in one of these situations:
- Your administrators, managers and finance department complain about a lack of visibility in company expenses – especially for business travel.
- The expense report process is laborious and needs to be optimized.
- Employees on business trips don't have peace of mind. They worry about expense advances and return travel claims, meaning their performance suffers.
- Your travel managers have difficulty getting the company's travel policy adopted and applied by all employees.
- Many expense claims are denied, which leaves travelers dissatisfied.
Choosing a corporate card to pay for company expenses, especially mobility costs, is an ideal payment decision to address these issues. This means of payment has a number of significant advantages, whether it be improving the travel experience during business trips, simplifying expense management processes or generating savings.
So, without further ado, here are the five main reasons for adopting a corporate card:
Reason 1: Better Control of Costs Related to Business Travel and Expense Processing
It’s not always easy for finance and travel managers to accurately track expenses incurred during business travel.
Some payments are made in advance by the travel manager, while others are made on the spot by travelers with their own personal bank cards.
How exactly are we meant to control mobility costs if we don't have a clear view of the expenses incurred by each individual?
Thankfully, some company cards greatly simplify business travel management. Providing your travelers with a corporate card is an excellent solution to guarantee transparency of business travel expenses.
It provides managers with several major advantages for observing all costs:
- Corporate card reporting is very detailed and offers different levels of data.
- Data is automatically integrated into management and reporting tools already in use.
- A consolidated view of all corporate cards and users allows for complete monitoring.
- Visibility into suppliers is increased thanks to high data levels (we’ll come back to this with reason 5).
Reason #2: Ensure Compliance With a Corporate Travel Policy
The Corporate Travel Policy (CTP) is a tool that guarantees compliance with rules on mobility expenses.
However, it’s quite difficult to enforce:
- Business travelers are generally focused on why they are traveling and so don’t consider the CTP.
- There are often too many rules to remember.
- There's a gap between the reality of being on the road and the vision of travel managers.
Corporate cards make it easier to track transactions, refine analysis, and adjust the CTP to better meet the needs of both the company and it's employees.
Corporate cards also ensure that expenses are in line with your travel policy.
Transaction rules can be created and adjusted for corporate cards:
- Fix spending limits
- Whitelist suppliers
- Exclude purchase types
- Exclude supplier categories
- Exclude cash withdrawals
Travelers no longer have to know their CTP by heart: If the corporate card transaction is accepted, then it is in compliance with the expense policy.
Reason #3: Save Travelers’ Time
When traveling on business, employees have many other priorities than spending time managing their expenses.
In fact, expense management is often a source of stress and dissatisfaction.
The corporate card frees business travelers from this burden:
- No compliance worries thanks to the transaction rules.
- Expense claim management is streamlined through automatic transaction data transmission in your expense management tool.
In parallel with centralized management software, corporate cards reduce certain manual procedures like reimbursement claims, which are now nearly automatic.
This means that employees can save 40% of the time they dedicate to managing mobility expenses!
The corporate card therefore eliminates a source of anxiety for employees while on the road and reduces their mental workload. This peace of mind is essential for them to perform better and focus on their initial mission.
- According to a 2018 Egencia study, 34% of business travelers who have adopted this technology appreciate the time savings in expense management.
- In the same study, more than one-third of business travelers surveyed who do not yet have automated expense claim processing would like to have access to it.
Reason #4: Optimize Expense Management Processes (and Save Money)
Business travelers are not the only ones who suffer from this tedious travel expense management.
Processing travel expenses, especially expense reports, is a costly, time-consuming process.
Would you believe that the average cost of processing an expense report is €53?
Fortunately, modern solutions help simplify and optimize these procedures.
Corporate cards enable automatic reporting of transaction data, integrated into expense management tools.
Time and costs are reduced by 40%.
That translates to an estimated saving of €7.60 per expense report batch.
In fact, expense report management can be completely eliminated by opting for corporate cards with corporate responsibility. Since the company account is debited instead of the employee account, the business traveler no longer has to advance any travel expenses.
The fear of fraud has prevented many companies from taking this step in the past. However:
- This risk is almost non-existent today (we're talking about an estimated average cost of €72 per €1 million in expenses, according to a 2018 Paytech study).
- Fraud insurance for corporate cards covers all damages.
Reason #5: Greater Bargaining Power With Suppliers
The fifth advantage of the corporate card: strengthening your negotiating power with suppliers.
Adopting the corporate card for your mobility expenses gives you two significant advantages:
1. Better knowledge of your suppliers thanks to payment data.
These days, it's those with the best data that have the most power.
This is especially true with your suppliers: The more information you have on them, the greater your negotiating ability.
The corporate card also makes it possible to aggregate data at an international level, regardless of currency. You can consolidate all your supplier data, giving you better visibility and control. This data can then be used as a negotiation advantage to obtain discounts, new ceilings or other benefits.
2. A trusting relationship with suppliers
The corporate card guarantees two critical insurances:
- Immediate payment
- Guarantee of payment in any case by the card provider
These benefits improve your company's relationship with its suppliers, improving your trustworthiness, reputation, and rating.
