Overview of Charge Cards in Corporate Travel Management

Overview of Charge Cards in Corporate Travel Management The Travel Management Group Copyright: Travel Management Group

Overview of Charge Cards in Corporate Travel Management Group Alexandria, Virginia Tel: (703) 684 -6080 www. travelmgt. com Tom Wilkinson President Copyright: Travel Management Group

Overview Part I: Why Companies Use Corporate Cards Part II: How Card Programs work Part III: Selecting a Corporate Card vendor Part IV: Future of Card Systems Copyright: Travel Management Group

Why Companies Use Corporate Cards as “Best Practice” ¨ Credit cards vs. Charge Cards ¨ Only source of data for: – Hotel – Car rental – Other ¨ Only single database for air, hotel, car etc. – Can validate agency data/reconciliation Copyright: Travel Management Group

Why Companies Use Corporate Cards as “Best Practice” ¨ Data consolidation capabilities makes cards an essential first step in travel management for: Copyright: Travel Management Group

Really… Copyright: Travel Management Group

… and really small !! Companies. Copyright: Travel Management Group

Why Companies Use Corporate Cards as “Best Practice” ¨ Facilitate payment for travel services ¨ Limited other benefits – Various insurance (car, injury) – Protection from liability • Bankrupt suppliers, fraud Copyright: Travel Management Group

Part II: How Card Programs work ¨ General Overview ¨ Configuration Options – Payment – Liability ¨ Best Practices – Now and then Copyright: Travel Management Group

Part II: How Card Programs work ¨ Company enters contract with card vendor – Decides limits, SSEs, configuration ¨ Company policy to charge some or all T&E expenses to corporate card – System most effective with 100% compliance requirement ¨ No corporate liability for individual cards ¨ May allow cash advances ¨ Potential financial rewards Copyright: Travel Management Group

How Card Programs work… Configuration Options ¨ Central and individual billing ¨ Central and individual payment ¨ Variations – CB/CP, IB/IP – Can vary by type of charge Copyright: Travel Management Group

How Card Programs work… Best Practices ¨ What works best depends on: – Type of company and culture • Striking the balance between management and flexibility/convenience – Strategic objectives Copyright: Travel Management Group

How Card Programs work… ¨ Travelers love central bill, central pay – Maximum convenience – Kids at the country club – Direct billed hotel charges ¨ Controllers and Auditors HATE – Reconciliation nightmare – Potential for fraud and abuse – Zero (0) accountability for travelers Copyright: Travel Management Group CB

How Card Programs work… Today’s “Best Practice” ¨ Individual Bill/Individual Pay – Travelers get corporate card – Individual liability – Individual bills – Submit for reimbursement – Pay Bills Just like real life!!! Copyright: Travel Management Group

How Card Programs work… ¨ Benefits of IB/IP – Incentive/pressure on travelers to pay bills – Limited reconciliation effort • Should pay only approved expenses – Central data capture ¨ Primary objections – FFB’s – Color of the plastic Copyright: Travel Management Group

Part III Selecting a Vendor Copyright: Travel Management Group

Selecting a Vendor… Who’s Who ¨ Giants: Amex and Diners Club ¨ Veteran Bank Card: US Bank ¨ Innovators: GE Capital, First USA ¨ New Players: – Bof. A, Wachovia, First Union • Zillions of others Copyright: Travel Management Group

Selecting a Vendor… ¨ Key Issues – Vendor Acceptance – Account Management – Traveler Service – Management reporting – Frequent Flyer Benefits – Financial Incentives Copyright: Travel Management Group

Selecting a Vendor… Process ¨ Get Proposals – Features change frequently – Some differences more key than others ¨ Secret Hints – Look for local (or very dedicated) management support – Don’t ignore the FFB issue – Travelers may have extraordinary loyalty to specific charge cards Copyright: Travel Management Group

Selecting a Vendor… Emerging Issues ¨ Automated Expense Reimbursement Systems (AERS) – Supported by daily automated downloads into many major systems – Requires mapping of card files into AERS db Problems: Charges for data Changes to file formats Copyright: Travel Management Group

Selecting a Vendor… Emerging Issues ¨ Web-based tools and functionality – Program administration – Checking status of charges and payments – Platform for expense reimbursement Copyright: Travel Management Group

Part IV Future of Card Systems Or Future of Money Copyright: Travel Management Group

Future of Card Systems… ¨ Some observers think cards targeted for “disintermediation” – Cards charge merchant fees – Vendors “wonder aloud” why such a large expense is not direct billed ¨ Data warehousing could unify air data with T&E charged to other cards ¨ Could cut 1% from air without losing data Copyright: Travel Management Group

Are they really needed? Is their value worth their cost? Especially now that ‘net-net’ fares give visibility to their cost? Copyright: Travel Management Group

Or to put it more simply… Would you really have the consolidated information? The convenience? …or the money? Copyright: Travel Management Group

Future of Card Systems… Other Side ¨ Card vendors see it differently ¨ Cards are the future of money in a cashless society ¨ Moderate success in promoting purchasing cards based on value of data and process streamlining Copyright: Travel Management Group