As the number of business trips in a company increases, it is easy to lose track of your travel costs. This leads to missing key information required to optimize travel payment policies and negotiations with service providers - figures that are required to save travel costs.
In many companies, the decisions to be made concerning Travel & Entertainment payments are becoming more multi-disciplinary. Indeed Corporate travel & entertainment (T&E) payment solutions affect many different stakeholders within a corporation, including:
- travel manager
- Human resources
Each of these stakeholders has their own set of requirements as to what an ideal payment solution entails.
All T&E payment solutions offer greater liquidity than alternate payment methods, such as petty cash or direct invoicing. However, unless travel counts for an exceptionally high proportion of the company’s costs, small differences in payment terms will have almost no impact on the company’s overall working capital. There are many additional advantages to a T&E payment solution that appeal to a company and these benefits include the following:
Improved process efficiency
- Seamless financial system integration – Electronic invoicing lets you upload format-friendly information seamlessly into your accounting system. No manual entry is required.
- Rapid invoice reconciliation – For users of a centrally billed T&E payment account (sometimes known as a lodge card), a single invoice covers all payments by your employees. A reconciliation process that used to take days can now be completed in minutes.
- Minimize cash advances – No companies likes cash advances. Now they can be eliminated by
- employees paying directly through their T&E payment solution or withdrawing cash on their corporate cards while traveling.
- Lower payment costs – Handling costs are much lower than cheques or wire transfers. Credit is interest-free for the vast majority of travel expenses.
- Secure electronic billing – Billing is delivered in the customer’s desired format, e.g. EDIFACT, XML, CSV, LARS.
- Simplify T&E data collection – One special feature offered by AirPlus is that its reporting tool, AirPlus Information Manager, can act as a T&E data warehouse, consolidating data from other service providers (such as travel management companies) and even from other payment providers.
Improved compliance and risk management
T&E payment solutions mitigate a wide range of operational, financial and reputational risks.
- Prevent employees from over-spending/spending outside policy – You can limit how much employees are allowed to spend through monthly limits and individual transaction limits. You can also control who they are allowed to pay by setting limits on which types of merchant (e.g. hotels and restaurants only) may accept the card.
- Monitor employee spend – Comprehensive reports allow your company to keep a close eye on how much employees are spending. With some payment providers you can also create alerts to warn you of questionable spending behavior, e.g. cardholders approaching their monthly spending limit.
- Make T&E payments without plastic cards – Companies don’t like giving plastic corporate cards to everyone who works for them, e.g. contractors, interns or new employees. Products like lodge cards and virtual cards allow closely controlled payments for T&E without having to issue any plastic.
- Understand your T&E spend better – By channeling all T&E payments through one process globally – a process with excellent, precise reporting - you can fully understand how much T&E is costing your company, and when you need to pay.
- Track budgets – Some payment solutions allow the addition of up to nine separate fields of employee data at time of payment. That allows you to easily break down spend by employee, client, project or department. And so can your budget-holders. Daily transaction feeds into your expense reporting system ensure fast visibility of total spend.
- Gain better supplier deals – Time and again, travel buyers report that detailed information about how much employees are spending, and with which suppliers, makes the difference when negotiating corporate discounts. However, it is important to note that the quality and detail of management information offered by different T&E payment providers varies enormously.