ASATA column: Get Your Financial Systems Right

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Corporate travel expenses are often charged to a company-issued credit card. The information extracted from these transactions is then dropped into management information reports, which show card transactions per cost center, department, region and ultimately the cardholder’s division.

This payment solution works well, although there are still companies who choose to reimburse the traveller upon submission of an expense claim form. Not only does this negatively impact the employee’s personal financial situation, but it also dilutes the information available to manage travel policies.

The “bill back” method of payment is still quite popular. It continues to evolve and with the suppliers adopting technology, we have seen the move to electronic vouchers, which is far more preferable and convenient. 

There are a few versions, but quite simply, the travel agent makes the reservation and issues the traveller with a voucher. Once that voucher has been used, the supplier issues the travel agent with an invoice, which in turn is forwarded on to the client. Payment is then made to the travel agent and sent on to the supplier. Alternatively, many companies require that whilst the TMC must facilitate all aspects of their travel booking, they choose to settle directly with the supplier.

Authorising your travel agent to use a corporate card has its risks, due to fraudsters, who are proficient in illegally obtaining card details. The point of compromise may not even be with the travel agent.  

There is no perfect solution, but one that is extremely efficient, relatively risk free and streamlines your administration, is when a travel account is opened with the card company by the corporate customer, who in turn lodges the account details with the travel agent. All transactions are charged to the account and the statement is ultimately reconciled against an invoice from the travel agent. The supplier becomes the merchant and is settled directly by the bank, which makes them happy, the travel agent is not expected to fund your travel account – which makes them happy – and whilst the payment is due upon presentation of the statement, the company essentially has 30 days to reconcile and settle directly, which should make them happy.

Robyn Christie

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