To rationalise business travel expenditure, small companies, like large ones, are increasingly turning to electronic means of payment. The use of payment cards is obviously more widespread among international groups than among SMEs. A study was carried out in 2008 jointly by Apeca (the association of European purchasing card professionals) and the CB bankcard group, involving a sample of 200 small and medium-sized businesses, with the aim of gaining a better understanding of the use and mastery of dematerialisation.<\/p>\n
To pay for their purchases (excluding salaries, taxes and duties), 86 % of companies use cheques and 66 % use payment cards issued in the company's name. Only 4 % use a cash advance system on the part of the employee or manager. Our survey of the SME segment shows that dematerialised payment methods are still struggling to find their place alongside cheques,\" says Solange Ligeret, Secretary General of Apeca. However, a tool such as the purchasing card gives us greater control over the limits set by budgets.\"<\/p>\n
In large companies in the private sector, the sluggish economy is leading to a hunt for savings by making employees more responsible when it comes to business travel. More than ever, the implementation of a strict travel policy involves payment by means of a nominative card and\/or a card lodged with the travel agency with which the company has previously contracted. As far as corporate cards are concerned, the big names in the sector - American Express, Visa and Mastercard - provide for two methods of direct debit: either the payment is debited from the cardholder's account, or it is centralised in the company's account. It should be noted that a large number of companies do not hesitate to change the direct debit method by switching it to the employee's account. Sometimes, and no doubt to 'make the pill go down', they give them a top-of-the-range card.<\/p>\n
International payment networks generally offer three categories of card for both SMEs and large corporations: an entry-level card, a mid-range card and a top-of-the-range card. Each payment solution is complemented by a panoply of insurance and assistance cover, varying in scope. For example, the American Express corporate card includes business travel insurance, which provides compensation of up to \u20ac350,000 in the event of disability or accidental death. With a Gold card, the compensation ceiling can be as high as 500,000 euros if the incident occurs on public transport. For the Platinum card, reserved for the elite of frequent travellers, the list of services is much more extensive: unlimited access to over 600 airport lounges, enhanced cover for accidents and travel incidents and a concierge service. Available to the holder or their assistant 24 hours a day, 7 days a week, this service meets the real needs of business travellers: restaurant reservations, ticket purchases for cultural or sporting events, etc.<\/p>\n
Here are two examples, among others, of requests made by Platinum corporate card customers to the concierge service. First example: during a trip to Holland with his sales team, a Platinum cardholder wanted to organise a dinner in a gourmet restaurant. He called the concierge service to book a table, but the restaurant was closed that evening. Faced with the cardholder's disappointment, the service did everything it could to open the restaurant for the dinner on an exceptional basis,\" explains the American Express concierge service. The cardholder, accompanied by his team, was able to enjoy this exceptional table, open only for them that evening.\" Second example: receiving foreign clients in France, a cardholder wanted to invite them on a private night tour of the Louvre. As the prestigious museum does not organise private visits for individuals, the concierge service had to argue, negotiate, secure the service and obtain specific insurance to cover this night-time visit. In the end, the curator of the collections concerned agreed to open the doors of the Louvre. On an exceptional basis.<\/p>\n
The third item on a company's travel budget is hotels, for which there is a special payment solution that automatically centralises these outgoings. The two card operators, Airplus and more recently American Express, have signed an agreement with CDS Groupe, a central reservation system offering over 150,000 hotel references. Since 2007, at Air Plus, payment of hotel bills is made via a dedicated card, opened in the name of the client company at the CDS reservation centre. Instead of accumulating, and incidentally misplacing, a large number of individual receipts, the private or public company receives an invoicing statement of the expenses incurred in the hotels during a previously defined period. On request, this can be obtained electronically. AirPlus is also planning to launch its own payment solution, AIDA (AirPlus integrated data & acceptance), in France before the end of the year. Already operational in other European countries and around the world, it can be used to guarantee and\/or pay for hotel nights on behalf of corporate customers, via their travel agency. Developed by AirPlus International, it is based on the MasterCard network, ensuring wide national and international acceptance.<\/p>\n
Since the end of 2009, the hotel budget has been channelled through a corporate card at American Express, which has also signed an agreement with the CDS reservation centre. \"Our centralised payment solution for hotel expenses with CDS Groupe meets the needs of both companies and travel agencies, which are keen to improve control over expenditure, gain real visibility over these items and simplify accounting flows\", explains St\u00e9phanie Laroque, Marketing Director of American Express Corporate Card. What's more, this card limits the number of accounts and disputes between the parties concerned: agency clients, hotels, service providers, etc.<\/p>\n
It works in four stages. First, the company books a hotel through CDS. It then receives a unique order and payment number with a fixed amount and date. Third stage: with this number and this payment solution, the hotel is paid for quickly. Fourth stage: at the end of the month, on receipt of the detailed monthly statement of hotel expenditure, the company has optimum visibility.<\/p>\n
\"By combining a central hotel reservation system with a centralised payment method, this solution provides the company with a good third of savings,\" says Ziad Minkara, CEO of CDS Groupe. These savings can be broken down into 15 % in savings on direct costs and 20 % on indirect costs. These indirect costs result in particular from the elimination of different supplier accounts by the hotel, the sending of invoices, and the reimbursement of expenses to employees who previously paid their hotel bills with a single-use payment card. In terms of cash flow, the company can obtain a deferred payment of up to 59 days after the hotel check-out date. When a company has an American Express debit card, this virtual payment solution complements it.<\/p>\n
For businesses, holding cards offers a number of advantages, not least fast, easy and secure payments. Cards are widely accepted and eliminate the need to hold cash. They also make it possible to track purchases and control budgets more effectively. Thanks to the statements it receives, the company can better break down expenditure. Clearly, corporate cards and\/or the corporate card make the task of the various parties involved - travel managers, purchasing managers, accountants and even financial directors - much easier. They give them access to attractive financial terms and conditions, as well as the ability to manage ticketing payment deadlines. This optimisation of the business travel budget helps to ensure compliance with the company's travel policy. But beware! Exceptional tolerances in the application of the travel policy risk becoming widespread very quickly,\" warns one observer. This drift does not allow the savings expected from the introduction of internal rules to be achieved.<\/p>\n
Another advantage is that you get independent reporting from the travel agency, or even consolidated reporting if the company has a contract with several agencies. Accounting integration is greatly simplified, as is the process of paying travel agency invoices. What's more, the complementary nature of the business card and the corporate card provides a comprehensive database of data relating to business travel.<\/p>\n
In terms of reporting, AirPlus is able to provide information corresponding to flight coupons issued by 209 airlines, including Air France, 25 of which are low-cost airlines (Easyjet, Transavia, Vueling) accepting the UATP (Union Air Travel Plan) payment method. In order to manage unused flight coupons, Air Plus can even provide flight data (flown data), notably from Lufthansa, Air China, Austrian Airlines, British Airways and Swiss International.<\/p>\n
For its part, MasterCard Smart Data OnLine, with its improved ergonomics, facilitates the management of expenses for more than 10,000 companies around the world. According to Mastercard, \"This flexible, reliable, global web-based reporting application is a cutting-edge solution that companies are recommending to better organise, analyse, consolidate and manage their financial data from our card programmes\". Mastercard also offers In Control, a platform that provides companies with a tool for setting parameters for card use, type of expenditure and geographical area. This offer is of interest to multinationals wishing to modulate card use according to their subsidiaries.<\/p>\n
With the traditional packaged card, the travel agency provides a cash advance for everything from air and rail travel to car hire. With the packaged card, the agency is paid faster and more regularly. For our agencies, lodged cards involve paying a commission to the major issuers, in this case Amex, Air Plus and Diner's Club,\" explains Philippe Quillien, Director of Business Travel at AS Voyages, an agency resulting from the merger of Selectour and Afat Voyages. Even if this commission is high, it is offset by the speed of settlement combined with the security of payment.\"<\/p>\n
When an agency is paid simply by bank transfer by a corporate customer, the contract may stipulate payment within 30 days, or even longer. On the other hand, where a card is used, the agency is paid within four to seven days. What's more, responsibility for payment is transferred to the card provider, giving the company real security. The agency's accounts receivable department is responsible for managing reminders for unpaid invoices. As the average gain generally observed varies between 2 % and 5 % of the total annual cost of the agency, the fees charged by this service provider are revised downwards for private or public companies.<\/p>\n
For example, an international non-governmental organisation with an annual business travel budget of 12 million euros obtained a reduction in transaction costs of 10 % from its travel agency, following the introduction of payment by debit card. \"Unlike in Anglo-Saxon countries, where there is a strong culture of accepting business cards in the workplace, these cards have had some difficulty gaining acceptance in France. This is despite the fact that they are really easy to use and cost very little for companies\", says Espa in its white paper on assessing the organisational and financial impact of introducing a secure card.<\/p>\n
In the public sector, payment by card is still less developed than in the private sector, which is much more regulated and only opened up to purchasing cards a few years ago. Authorised in 2001, this method of payment was the subject of an implementing decree on 26 October 2004. In this case, and when it comes to business travel, the card is referred to as a travel purchase card.<\/p>\n
For operators of purchasing cards, and in particular services linked to business travel, the potential for growth lies mainly in the public sector. This year, Apeca is organising the \"Tour de France de la carte d'achat et de la d\u00e9mat\u00e9rialisation\", in conjunction with the General Directorate of Public Finances. The nine-stop tour began in Bordeaux in mid-April and will end in December 2010. \"The aim of this tour of France is to encourage exchanges between local authority decision-makers and purchasing card professionals\", explains the Directorate General of Public Finances. Elected representatives and public procurement officers will be meeting with bankers and suppliers. As partners in this tour of France, Air Plus and American Express are continuing to invest in the public sector, in particular working with ministries and large government departments to help them manage their purchases.<\/p>\n
The higher the volume, the greater the savings generated by these products and solutions. As public bodies are keen to comply with public accounting rules, particularly in terms of supplier payment times and methods, they are particularly appreciative of the quality of the reporting provided by the purchasing card operator. And also the acceptance of this payment solution by... low-cost airlines. Traditionally, in the public sector, where business cards are underdeveloped, travellers are reluctant to use their personal credit card to pay for any business-related expenditure. Hence the importance of introducing a dedicated card for these travellers.<\/p>\n
Whether it's a question of introducing or renewing cards, whether corporate or proprietary, it's in the interests of companies to invite tenders from banks and payment card operators. The obvious aim is to negotiate even more advantageous terms when two or three candidates are in the running. Far from being improvised, drafting a call for tenders means taking into account the specific characteristics of the company and its status,\" explains Anne Laure Gogeon, a partner at Epsa in Paris. In the case of a public company, we need to take account of its specific characteristics, mainly in terms of payment deadlines and the duration of the contract.<\/p>\n
Whether your business is in the private or public sector, there are a number of levers you can pull with your payment card providers. Starting with the payment period in relation to the statement date. If you want to save cash, you can always negotiate the payment period,\" says Anne Laure Gogeon. Of course, it will be easier to extend than the standard 28 days, especially if the statement is issued fortnightly rather than monthly. The flexibility of the statement, in terms of cut-off date and frequency, is another criterion for choice. To make it easier to check bills, and given that the number of lines billed decreases as the frequency of statements increases, some customers prefer to receive a statement drawn up every ten days or even every fortnight. The quality of the information on the meter reading remains essential,\" adds Anne Laure Gogeon. Let's imagine that a company has four main departments and a number of sub-departments. Inevitably, it will want to know to which department or sub-department, or even which project department, it should allocate the expenditure shown on the statement. Just as important: making sure that the card provider is able to provide the customer's analytical codes and that the reports are easily accessible to the company's purchasing or travel management departments, as well as to the accounts department, which is responsible for integrating the invoices.<\/p>\n
When changing card operators and implementing new payment solutions, the company should be able to benefit from the assistance of an account manager and an implementation specialist for a running-in period of two to three months.<\/p>\n
In theory, business cards are billed to the customer. But the price can also be negotiated, and may even be free if large sums are involved. In all cases, insurance cover deserves the utmost attention. Hence the need to consider the amount of capital paid out in the event of an accident or the death of the traveller. What's more, the levels of cover vary between Mastercard and Visa, depending on the bank networks that distribute them.<\/p>\n
It's also a good idea to check the list of low-cost airlines eligible for the card, to avoid travellers having to pay directly with their personal bank card. Bonuses or discounts are, of course, the icing on the cake. Tender specialists refer to the signin bonus, i.e. the discount on the payment card when the contract is signed with the operator. For example, a percentage discount on the company's annual travel budget. The longer the commitment, the more generous the card operator is likely to be. But at this time of year, when visibility is particularly low, they may limit themselves to paying a discount after the event, and more specifically at the end of the year. A nice Christmas bonus.<\/p>","protected":false},"excerpt":{"rendered":"