Virtual cards are not just for invoice payments by accounts payable anymore. They can play a vital role in business travel. Learn how they have inherent advantages over physical plastic or even traditional ghost accounts.
Read moreUniversity pilots SET Cards to reduce cash.
Declining Balance Cards do not receive the same press as other Commercial Cards, but they can be a powerful part of your card program. Missouri State University is embarking on this path now—piloting a type of Declining Balance Card commonly known as a Single Event Travel (SET) Card—to get away from travel cash advances. Following is my interview with Isaac Balasundaram, Procurement Card Coordinator for the university. Learn about their SET Card plans, including some early successes and challenges.
The Driver
Q: You noted that a driver for piloting SET Cards is a desire to move away from cash advances. Can you elaborate?
A: The cash advances, especially ones for our Study Away groups, often equate to large sums of cash that are deposited into an individual’s personal bank account or carried by someone as they travel. The SET Card provides so much more security and control. Today, if they run out of cash on their trip, they have to take money out of their personal account to be reimbursed after the trip is complete. Our initial focus for SET Cards is our Study Away groups, but I would eventually like to use them as a substitute for all cash advances issued by the university.
Program Management
Q: Who will manage the SET Card program—the same team/person who manages the other cards?
A: Yes, as the Procurement Card Coordinator, I am managing the program and we have developed a SET Card policy and process.
Application Process
Q: Please describe your application process.
A: The application form, designed specifically for SET Cards, includes fields for key information, such as travel dates, location, and purpose; estimated expenses for the trip; and the corresponding card limits needed. It also includes the terms and conditions for SET Card use, which align with our travel policy, and spaces for the appropriate signatures. As part of the policy, we are mandating training for any SET cardholder prior to card issuance.
Cardholder Accountability
Q: After a trip, will cardholders need to complete an expense report?
A: Yes, we developed a new expense report form. Cardholders will complete and submit it once the trip is complete, along with their receipts. Their department will also submit a cardholder statement obtained from the bank system, so we have a match to the expense report to make sure there is nothing on the card that the cardholder did not report.
Per policy, any unauthorized charges on the SET Card will be added to the individual’s accounts receivable after the trip is complete.
Single Event Travel (SET) Cards can be a way to reduce cash advances and the issues that go along with managing cash.
The Pilot Phase
Q: What does your current pilot phase entail?
A: The cards are issued by the bank in batches of 25. There is a two-week processing period, so I have already requested and received the first batch of cards. The first “pilot trip” is to Costa Rica in January. That will really tell us if this program will work for these types of situations.
With the Study Away groups, they have to prepay many expenses, so, even though the actual trip may be in March/April, they will be issued the card now—in December. The card for the Costa Rica trip was issued a couple weeks ago, so the cardholder can start pre-paying for his expenses.
Q: What are some challenges and successes you have experienced at this early stage?
A: So far, things have worked out as expected. I’ve received a very positive response from individuals who we are trying to recruit for the pilot phase of this program. The SET Card has an ATM withdrawal feature, which really benefits the cardholders who will need to have access to some cash on their trips. In some of the cases with individuals traveling to certain third-world countries, they will need to use cash for a majority of their transactions. This card gives them the security to be able to take their card to their foreign location and withdraw money from an ATM there. The downside is the fees associated with withdrawing money from an ATM that doesn’t belong to our card issuer. Whenever possible, we are recommending withdrawing cash locally prior to the trip. Also, one challenge is that I have to notify the bank prior to every foreign transaction to make the necessary changes to the card. This adds a few more steps.
A question that was brought up was vendor acceptance of a card that doesn’t have the cardholder’s name on it. To address this, I will be issuing an authorization letter on our university letterhead to the cardholder when they pick up their card, tying in the card number to the individual on the trip. We are also directing cardholders to take their university ID and their driver’s license on their trip.
Learn More
Recharged Education will continue to see how the program at Missouri State University is going. Meanwhile, visit the webpage on Declining Balance Cards to gain insight from a couple other end-users.
About the Author
Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…
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Smartphone business challenges and trends.
Mobile/smartphones have come a long way in the business world since the early days when they primarily served as mini email devices. Expanded functionality and usage mean new opportunities for efficiencies, but also new challenges. Mary Schaeffer of AP Now writes about one headache below, while I explore some mobile trends. With increased awareness, your organization can determine what, if any, steps it should take to harness the benefits of smartphones while guarding against the risks.
Smartphones, Receipts and a New Expense Report Auditing Headache
by Mary S. Schaeffer, AP Now
Most employees have smartphones, taking them wherever they go. The phones are especially handy for travelers, who can snap pictures of their meal receipts for their expense reports. It’s a lot easier and cleaner than keeping all those little pieces of paper together. However, all is not rosy in receipt land.
The New Issue
Some employees are submitting the same electronic receipt for the same meal on multiple expense reports. Whether this is being done inadvertently or the employee is actively trying to defraud the employer of a few dollars is a separate issue and one that is difficult to pinpoint definitively. However, from an expense report audit standpoint, it is critical that these duplicate submissions be weeded out and not paid a second time.
Smartphones can play a role in reducing office paperwork, but organizations also need to implement related controls and policies.
The Solution
Insist on employees using a company credit card to prevent them from playing certain games with their expense reports. For those who don’t go this route, using automated expense reporting software will address the problem. When combined with a company card, the information can be automatically loaded into the expense report. Then the employee doesn’t have the opportunity to submit the expense twice.
Organizations who do not use automated software have two primary lines of defense for uncovering duplicates:
- The traveling employee’s manager who approves the expense report. Although it is incumbent on them to check everything first, it is a well-known fact that only a few actually check the expense report before approving it. Making managers responsible for what they sign is a good first step.
- The group who audits expense reports. For starters, anything that is submitted more than a month or two after the meal should be double checked to ensure it wasn’t included on a prior report. Best-practice companies use data analytics to identify potential duplicate payments of all types, not just those on expense reports.
Concluding Thoughts
Technology is wonderful. It certainly makes many tasks in the business world a lot easier. Expense reporting is no exception. The sneaky thing about technology is that it also introduces problems we didn’t have in the past. This is one such example. By identifying the problem early on, you can create solutions to make sure extra dollars don’t drift out the door on your watch.
2015 Smartphone Studies and News
by Lynn Larson, CPCP
We know mobile payments have entered the Commercial Card world (e.g., American Express and Apple Pay), but this year’s mobile news is even broader. Following are tidbits on four other topics.
Business Travel
Intriguing 2015 research by Business Travel News (BTN) reveals business travelers have embraced mobile technology, but organizations are slow to respond in terms of mobile policies and understanding what travelers use and want. For example, mobile policies, when they exist, tend to be created in reaction to a certain situation, problem, etc. They often fail to address many aspects of mobile usage, including expense filing, roaming charges and social itinerary sharing. If you are a travel manager, this research is a must-read.
BYOD
Mobile policies are not limited to travel management. They should include a stance on BYOD (bring your own device); specifically, whether employees should use their personal devices for work functions. The debate becomes more heated if the work entails accessing sensitive data or financial records. A 2015 study by CompTIA, Building Digital Organizations, found that 53% of respondents’ organizations allowed no BYOD, compared to 34% in 2013. Security could be one factor. For various considerations, see ComputerWorld’s article on other findings from the study.
Data Breaches
With ongoing news about data breaches, it is natural to wonder if there is a mobile path. Per the Verizon 2015 Data Breach Investigations Report, mobile devices are not a preferred vector in data breaches. However, the report also notes mobile devices have clearly demonstrated their ability to be vulnerable. Download the report to learn more about data breaches overall.
Regulatory Involvement
The U.S. Congress is taking an interest. Earlier this month, the House Energy & Commerce Committee held a hearing to explore mobile payments security and data privacy. Industry experts described security features (e.g., tokenization and biometrics), as well as challenges like having multiple parties involved in the payments process. A key question is whether specific regulatory oversight is needed, such as laws covering mobile payments fraud protection. An article by BankInfoSecurity provides more insight into the hearing.
Final Thoughts
Mobile usage for business purposes will continue to evolve. How can your organization take greater advantage of the benefits? If/when you do so, be thoughtful about your policies to ensure they keep pace.
About the Authors
Mary S. Schaeffer, a nationally-recognized accounts payable consultant, is the creator of the AP Now website. She speaks regularly at live and online events; has written 18 business books, most focused on accounts payable issues; and has created many CPE courses for CPAs. Additional information can be found at www.ap-now.com.
Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…