SAN FRANCISCO -- Corporations looking to cut travel and
entertainment costs need to automate their expense reporting
process, maintain a comprehensive T&E database and secure the
endorsement of senior executives regarding travel policies, a study
by Visa U.S.A. said.
Visa said these represent the top three of 36 "best practices"
identified in the study, which examined the practices of 16 Fortune
500 companies that are recognized as leaders in T&E
management.
Visa commissioned the Deloitte & Touche Consulting Group to
survey chief financial officers, travel managers, agency management
and traveling employees. The study was designed to identify ways of
streamlining travel and entertainment processes, to save time and
money for travelers and their companies.
"It has become increasingly apparent that [travel and
entertainment] must be managed, not as an isolated function but as
one linked to other business processes and functions," said Bruno
Perault, senior vice president for commercial card products at Visa
U.S.A. "The 'best practices' study shows how leading companies are
already employing this integrated approach and how the Visa
corporate card can help companies improve overall
efficiencies."
Greg Hammermaster, director of Visa Corporate, said Visa's
member banks are looking to become bigger players in the corporate
card business and felt that examining travel management practices
would help reach that goal. "We are looking at this study really as
a blueprint for Visa to drive its development for strategic
alliances," Hammermaster said.
Visa is the most used consumer card in the world, with 600
million cards in circulation, but lags behind American Express in
the corporate card business.
Visa outlined the benefits and potential dollar savings of the
three top "best practices."
Automated expense reporting can reduce costs of processing a
standard employee expense report by as much as $13, compared with a
standard paper expense report. For many companies, this translates
to about $1 million in annual savings. The data generated by an
automated expense report can help improve negotiations with vendors
because the travel manager can clearly demonstrate what airlines
employees use and what hotels they prefer. The data in automated
expense reports are usually fed directly from the corporate card,
as opposed to manual entry.Central data repositories also help vendor negotiations. Large
accounts can expect to save between 8% and 10% per year through
data collection, which translates to more than $10 million a year
for some larger accounts.Senior company executives must make an "unwavering commitment"
to travel policy, the study concluded. By demonstrating a
commitment to travel policy, companies can help boost policy
compliance by about 10%, the study shows. A firm with an airline
budget of $100 million, for example, can save as much as $1 million
per year in additional discounts with strong policy compliance.
Negotiated discounts often are linked to meeting volume or
market-share thresholds.