Simple payment management changes, such as introducing the use of virtual payment options, like Central Travel Solution (CTS) or Business Travel Account (BTA) commercial cards, can significantly improve the ROI on travel programs. A TMC with expertise in payment management systems can help your organization build travel policy guidelines to ensure credit card payments are consolidated in order to increase eligibility for various credit card company benefits, rewards and special offers.
What are single card accounts?
Single card accounts are “virtual,” meaning plastic cards are not used in the transaction. With virtual cards, the service supplier (such as an airline, car rental company or hotel) uses the same account number for all transactions involving a single corporate customer. Two common single card travel programs are:
- BTA - According to American Express, a Business Travel Account (BTA) is a central billing account designed to be used as a payment vehicle for air and rail charges. The BTA can also be used for hotel and car rental bookings and can be particularly useful for large groups, infrequent employee travelers, and guest travelers, such as consultants and job applicants.
- CTS - Central Travel Solution, according to MasterCard, is a way for corporations to pay for travel-related expenses from a single centralized account held by the Travel Management Company. The result is a convenient solution delivering consolidated, transparent and enhanced data to drive tighter control over travel budgets.
What are some benefits of single card accounts?
The benefits of single-use virtual payment accounts are in solving many of the top concerns expressed by SME travel managers – from saving money to simplifying reconciliation to offering more comprehensive data capture capabilities.
Leveraging some of the following benefits can help enhance T&E programs and policies that will improve your organization’s bottom line:
When companies mandate the use of a single corporate card for all T&E related purchases, it can help them save money and ultimately reduce travel costs. Here is how:
- More rewards - Many card programs include reward points or annual cash rebate payments. These points can usually be redeemed for travel, merchandise or gift cards — thus adding value to the card for the company as a whole.
- Better negotiated deals - With travel expense consolidation, TMCs and travel managers can negotiate better pricing with preferred suppliers because of increased spend due to a higher volume of travelers. According to MasterCard, industry data shows that organizations that use credit card data when negotiating with suppliers, see 33 percent higher discounts on average for airfares, hotels and car rental bookings compared to organizations that do not use such data in negotiations.
- Reduce manual tasks - Using payment cards eliminates the resources required to manually produce and process checks, as well as any required postage expenses.
Virtual cards enable travel managers to have greater control over policy compliance, procedures and expense management during business trips, in the following ways:
- Improved compliance - Travel managers have more opportunity to guide travelers toward compliance by placing usage and dollar amount controls on single cards. Single card travel programs typically have superior reporting capabilities that offer travel managers transparency into travel expenses, allowing them to better track and control traveler spending and policy compliance.
- Restrict purchases - In order to eliminate overspending or T&E fraud on unauthorized payments, companies may restrict certain transactions by assigning spending limits and setting approved payment parameters by purpose and/or vendor.
- Improved security - Corporate cards limit exposure to fraud or abuse. Using a 16-digit number as a unique identifier, booking and transaction data are bound together, ensuring a 100 percent match between the two. This improved quality of data also reduces the risk of fraud.
- Increase traveler support - Some single-use cards offer business travel accident insurance when charging flight, train or bus tickets to the corporate card. Others may offer insurance plans that cover eligible travelers for lost, damaged, or stolen baggage during travel on a common carrier.
Improved T&E expense reconciliation through the use of single cards can help minimize reporting mistakes and save time in the following ways:
- Quicker traveler reimbursement - Using payment cards eliminates the need for travelers to purchase tickets on personal credit cards and create and submit expense reports. With single cards, travelers no longer need to wait for reimbursement and finance teams do not have to hassle with verifying individual expense reports.
- Improved data management - Some single use cards are online, and offer real-time solutions that can help organizations improve the reconciliation process. For instance, when a company uses the BTA a travelers’ air, rail, hotel and car rental expenses are consolidated into a centralized account. This makes the management of company travel expenses easier and faster. In addition, travel activity is typically consolidated and billed on a single monthly statement.
- Seamless data integration - Easier reconciliation of transactions, through automated matching and direct integration into back-office systems, quickens the process and reduces costly errors.
With an upsurge in corporate travel expected in 2017, a single card account for travel can significantly improve T&E expense management. Corporate credit cards can help to keep your company's expenses in check while providing the buying power you need to operate your business and negotiate the best rates with your preferred suppliers.