MasterCard Commercial Card Program
Simplifies Business Travel
See how the MasterCard Commercial Card Program’s local and
worldwide acceptance, and simple administration have helped
mid-size retailers streamline financial transactions for traveling
employees.
Business Travel Continues to Grow
Business travel is at an all-time high. Companies are opening new
branches in every part of the world. Training and troubleshooting need
to be done on-site. Even companies that rely on conference calling or
fiber-optic networks for meetings still require face-to-face interaction
on occasion. America’s companies are planning to increase business
travel in 2008, despite uncertainties about an unstable economy, high
oil prices and an expected rise in inflation, according to the National
Business Travel Association (NBTA). In fact, the NBTA found that as of
September 2007, business travel was up 3.8 percent from the
previous year.
The Costs of Business Travel
As business travelers continue to hit the road, the costs associated
with business will continue to rise. NBTA estimates that costs
associated with airfare, hotels, car rentals, and food will rise between
6 and 8 percent in 2008 as compared to 2007.
Further research by NBTA shows that 10 percent of those companies
that purchase travel options expect their budgets to stay the same for
2008, and 73 percent expect their costs to rise between 5 and 10
percent. Even companies that believe the number of trips their
employees take will stay the same will be affected by rising airfare
rates. In short, business travel is prevalent, and costs associated with
it will continue to rise. Thus, getting the most for a company’s
business dollar — and the savings in time, paperwork, and tracking
that go along with it — become critically important.
Business Travelers Today are Younger
Generation X is in the business travel market. According to NBTA, 43
percent of all business travelers were born between 1965 and 1986.
This population is more technologically inclined and expects the latest
technology when traveling. Few want to deal with the paperwork,
tracking and recordkeeping associated with using cash, travelers
checks, ATM cards, or personal credit cards that require turning in
expense reports in order to receive reimbursement.
Problems Business Travelers Face
Most business travelers want to get in and get it done. Paperwork,
company purchase vouchers and invoicing are some of the obstacles
travelers want to avoid.
Car rentals are virtually impossible to obtain without a credit card, and
entertaining while on the road is a given but can be stressful and
problematic when figuring out billing. With airport congestion, flight
delays and less room for flight re-accommodation, it becomes clear
that employees traveling for business-related purposes need the best
and simplest way to get from one place to another to get business
accomplished. Companies can help eliminate the additional headaches
and hassles by finding a credit card program that meets their needs.
Putting Controls on Employee Usage
Many companies fear that giving employees a company card will result
in unbridled spending. But putting controls in place in regards to
employee spending has brought many company CFOs peace of mind.
Companies can track employee expenses by limiting those who have
access to the card, setting a spending limit for employees using the
card (with some having a higher credit limit than others), and having
bills come directly to the company instead of waiting for employees to
turn in individual reimbursement reports.
How the MasterCard Commercial Card Program Can Help
The MasterCard Commercial Card Program provides cards for a
company’s individual needs. It doesn’t expect a company to conform
to a single card it is offering. With its variety of cards and varying
benefits, a company can choose the program that fits its needs.
Eliminating Personal Credit Card Use
One huge bonus of using a corporate credit card is that it eliminates
the need for employees’ personal credit card use for business
expenses. Separating personal receipts can be an administrative
challenge for both the employee and the receiver of expense reports.
Almost 25 percent of the total time spent managing a travel
accounting program is spent auditing employees’ expenditures,
according to a study done by Gunn Partners Inc. (“Travel Expense
Comparative Practice Analysis”). Eliminating personal use of credit
cards increases efficiency in the auditing process. In addition to saving
time tracking, reporting and reconciling employee expenses, having all
employees use one corporate card helps reduce the risk of potential
fraudulent use and ensures efficient expense reporting.
Eliminating Company Disbursement of Cash Advances
Employees will always have need of some cash available to pay
expenses at merchants where credit cards are not accepted. This
might be accomplished through company disbursements, ATMs,
traveler’s checks and personal funds.
Although the least expensive means of providing cash advances is
using personal funds, some employees are not satisfied with this
option. An alternative to ATMs is cash disbursements, which often
require a fee. Fortunately, with the wide acceptance of the MasterCard
Commercial Card Program, companies will save money on auxiliary
fees associated with cash advances.
Consolidate to Save Time and Money
Filing expense reports after each business trip is expensive, as is
cutting checks to dozens of individual users. By consolidating
employees into one card program, a company can receive one bill
online for all of its employees’ expenses and can send one payment
either online or by mail to pay that bill. This greatly reduces post-trip
processing procedures for the employees using the program.
Putting All Employees on One Card
Companies can save program administration time by mandating a
single card program for all employees to use in travel and
entertainment transactions versus the use of an employee’s personal
credit card. Collecting all travel and entertainment data through a
single card program also gives a company greater control when
negotiating rate reductions with travel and entertainment vendors.
Making Happy Employees
Giving employees a corporate card can help them be satisfied with
their jobs. An employee who can travel easily for his or her company,
without having to sort through the hassles of paperwork on returning
home, will be content.
