In such a tough economic environment, it is important to make every cent count. It is perhaps surprising then that so many businesses put their expenses on a Corporate Card, but fail to take advantage of the wealth of rewards available. With just a little planning, it is possible to make money when you spend money.
Reaping the benefits
With so many reward options linked to corporate cards, it's not hard to make your expenses work in your favour. However, you need to think carefully about what kind of rewards would make the biggest difference to your organization.
It's not just points or air miles anymore – although these are still available. Now, organizations have their pick of a huge range of rewards that work specifically for their business. There are no longer one-size-fits-all corporate card rewards.
If most of your expenses are comprised of flights and hotel costs, then seeking out a card that will reward you with air miles makes good business sense. The more you travel, the deeper the discount.
Not everyone is flying from coast-to-coast every week, of course. For Canadian restaurateurs, rising food costs are the biggest challenge, cited by 77 per cent when surveyed by the Canadian Restaurant and Foodservices Association. In more high-tech industries, capital expenditure in new machinery and precision tools are the main sources of expense. For many firms, the biggest expenses are the basics, with fuel at the top of the list. In this case, you might be better served looking for a corporate card that will reward you with cash-back or even points, which you can redeem at the gas pumps.
There are also less common perks to consider, such as comprehensive business travel insurance and medical coverage.
Consider the costs of the reward program
Just as you need to think about what you can get out of these products, you shouldn't forget the impact on your wallet. As with everything in business, you need to think about your bottom line.
Annual fees, as the name suggests, are charges that you must pay each year you have the card. As a rule of thumb, the higher the fee, the more robust the reward package. With certain cards, the insurance offering alone - Flight and Baggage Delay, Business Travel Accident Insurance, Travel Emergency Assistance to name a few – far exceeds the annual charge and is an immediate saving.
Look at the bigger picture
It is vital to look at the rewards on offer with corporate payment programs to ensure every expense is providing tangible benefits for your company. This involves setting a clear policy to ensure expenses are well-managed and cost-effective. Processes should be put in place so that staff is aware of the charges they are permitted to put on corporate cards. As T&E is often a major expense, this is where clarity can be most central.
"The importance of a carefully managed travel program has never been more important," said Michael W. McCormick, Global Business Travel Association (GBTA) executive director and chief operating officer.
Research by the GBTA confirmed the effectiveness of travel policy to help organizations minimize corporate travel costs. By looking at the bigger picture and using business insights, organizations can ensure that all expenses are necessary and take advantage significant efficiency gains.