Visa corporate card best practices study reveals ways to reduce travel costs
By Susan Avery -- Purchasing, 8/14/2008 2:00:00 AM
There is more to the 2008 Visa Global Procure-to-Pay and Commercial Card Best Practices Study than meets the eye.
Among the ways to improve efficiency and reduce costs related to use of commercial or T&E (travel and expense) cards and other payment tools are ideas that procurement pros can use when developing strategy to buy travel services.
These best practices can help companies to better manage rising air fares and hotel room rates without having to cut back on necessary travel in the coming months. Here is a sampling:
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Institute a center-led travel management function.
Best practice companies centralize the travel management function to ensure consistency of key travel program elements across the entire company, while providing flexibility for local business units to adjust policies and procedures to support unique travel needs. Organizations typically centralize these travel management activities:
• Travel supplier negotiations and management.
• Travel policy development and management.
• Management of online travel booking tool.
• Travel-related communications (e.g., newsletters, website).
• Corporate card administration.
According to the Visa study, centralizing travel management can reduce travel costs by as much as 20%.
Leading companies also use one travel agency to enhance the reporting of travel spend. Many integrate folio data from their corporate card programs with travel agency data for a better view of company-wide traveling costs. -
Maximize use of an online travel booking tool.
Companies use the booking tool to monitor travel spending and to encourage appropriate travel behavior. In addition, using these tools can result in transaction fees that are 30% to 50% lower than those for booking through an agency call center.
Organizations typically select an online booking tool provided by their travel agency or select a third-party software provider. Companies can use several approaches to increase compliance with the online booking tool, including communicating the benefits of the tool, training key users on the tool, offering incentives to booking with the tool and identifying non-compliance.
Online booking tools support establishing traveler profiles that allow companies to set controls applicable to the employee's travel needs. In addition, the tools allow for pre-trip approvals and can be used to monitor compliance with preferred suppliers.
Using corporate cards with online booking tools also improves a company's ability to increase compliance with travel policies. In addition, data from corporate card travel bookings can be integrated into expense reporting tools, automatically pre-populating expense reports to streamline the reconciliation process for travel expenses. -
Implement a corporate card program.
Best practice organizations create a cross-functional team to provide input during the sourcing process, including representatives from key business units, senior management and current card program administrators (if a card program already exists).
They define goals and objectives for their corporate card program before initiating the evaluation process and include stakeholder input when developing a request for proposal (RFP) for distribution to potential issuers.
Organizations analyze costs and benefits of each available corporate card program, taking into consideration product variations across card issuers. Some also hold briefings with potential issuers to gain a better understanding of their offerings.
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