In keeping with its inherent flexibility, credit card companies are offering corporations new solutions for their meeting planners.
By BTE
In keeping with its inherent flexibility, credit card companies are offering corporations new solutions for their meeting planners. They'll facilitate end-to-end meeting management, improve visibility into meeting spend, provide a way to control expenses, assist in more accurate budgeting and, ultimately, drive better supplier negotiations.
Meeting cards address the specific needs of a corporate meeting planner, which are by nature more dynamic than those of the typical business traveler. Integrating a corporate meeting card into your travel program can open the door to a whole new level of cost containment, budgeting and accountability for a portion of the travel budget that has, perhaps, flown under the radar.
First of all, what's the difference?
Corporate credit cards are issued to individual business travelers to use while they are on the road. Most companies choose to have the individual pay for their travel expenses and then reimburse them once their expense report is prepared, submitted and approved.
Meeting cards can be issued to company meeting planners or third party planners, if the function has been outsourced. They can be issued for a specific meeting, to a specific department. They can be issued with set dollar amounts or declining balance capabilities or with expiration dates for expenditures. The configuration is determined by the corporation's needs.
"One of the major differences between a corporate card and the meeting card is the high spend limit," explains Lisa Steury, vice president of global product management and marketing for American Express. "Some meetings can be pretty expensive, so it's a company level pay and the controls around the meeting card are tailored to the different types of meeting spend. Meeting spend can be much higher than a corporate card and it can also be more erratic so, unlike a typical corporate card, controls can be varied and changed on a month to month basis depending on the customer's needs."
Count On Contingencies Travel is unpredictable and meeting planning is not an exact science. Many a meeting budget has been blown by last minute problems or unforeseen requests that show up on the expense report or master bill long after the money has been spent.
This unpredictability can be costly in both time and resources so "on the ground" flexibility is a critical feature of a meetings card solution.
"There are going to be emergency situations that arise. For instance a corporate meeting planner may have a senior executive who needs an off-site meeting location next week. If a planner has to identify and book a property very quickly and it's not a property that they have a prior relationship with, the property may require a deposit to confirm the space or may not be able to facilitate a direct billing account on short notice," offers Louis Goodson, senior business leader for Visa's commercial solutions.
In addition, many of the online booking tools offered by major hotel companies have a pre-payment stipulation to confirm space so using a meeting card helps the meeting planning department maximize the new time-saving technologies emerging in the online booking frontier.
A meeting planner may be assigned her own meeting card but another option is the meeting specific card, issued for an event or series of events with a spending limit based on company's budget and, perhaps, aligned with the contractual agreement with suppliers.
"Let's say you have multiple meetings you are scheduling and you are expected to maintain a specific budget for each event," explains Goodson. "We would issue an individual card for each of those meetings with a fixed limit assigned and as the card is used in the execution of the meeting, the balance declines. At the point that you spend your budget, essentially no more can be spent unless there is action taken to increase the limit. This solution allows you to align usage with budgetary responsibilities."
In addition to meeting specific cards for smaller events, Goodson points out that using a meeting card can make the planning and execution of a large event more efficient. "Let's say that it's a huge event, maybe in the pharmaceutical environment or one of the large technology companies putting on a tradeshow with many moving parts. They may have multiple meeting planners assigned and multiple cards assigned. One may be for lodging, one may be for food and beverage; a card may be issued for all of the exhibit charges and collateral items. They could theoretically have an assigned card on a lower level on a commodity or an expense type and manage that spend accordingly."
Both the Visa and American Express card products can also be tailored to disallow certain merchant codes to restrict specific types of purchases.
For the travel department, this means no back-end, budget-busting surprises, since overages are identified up front and cost reduction strategies can be implemented before the spending is done.
Reconciliation The meeting card makes payment and reconciliation of meeting activities simple, timely and transparent.
"One of the immediate advantages of using a meeting card for payment of meeting expenses is that you get instant electronic data, immediate reporting and visibility into what's being spent and who it's being spent with," explains Goodson. "If you have cards already assigned to specific meetings, you have timely reconciliation. If you're in a paper process, you have to collect paper invoices for multiple meetings, you're filing manually and checking with accounts payable to make sure the bills are paid. There is a lot of back end, after the meeting processes that are either eliminated or very streamlined by using a meeting card."
A partnership between American Express and StarCite offers a program called Meetings360, which adds the expense management expertise of American Express into StarCite's meeting planning software. According to Steury, "Meetings360 allows the meeting planner to upload actual meeting card charges into the StarCite tool so they can reconcile their actual transactions to their budget. The meeting planner can also add in other charges associated with the meeting that might have been paid for in another form such as gratuities, off-site events or last minute supplies. On the back end, the corporation gets a complete financial picture of the meeting, including all related transactions."
The meeting card can help the meetings department and travel procurement facilitate company-wide budget cut initiatives if, for instance, the end of the fiscal year is looming and immediate cuts are needed to meet revenue expectations.
Visible Strength The ability to easily retrieve data, broken down by segment, is invaluable in both the budgeting process and in supplier negotiations. Using a meeting card provides visibility into where, when and by whom money is being spent thus can help identify areas that savings can be achieved, help consolidate spend and leverage future business.
Entering negotiations with both sides of the equation, the meeting side and the transient piece, puts some teeth into a corporation's request for the best rates and allows the supplier the opportunity to evaluate the total account and offer the very best package of rates and amenities. The added benefit of immediate payment as opposed to the 30- or 60-day waiting period for payment makes the implementation of a meetings card program a win-win for both the corporation and the supplier.
Integrating a meeting card product into the corporate credit card program differs depending on the company. American Express issues their cards directly to the customer and the process can be done online. MasterCard and Visa products are issued through their banking partners but most offer the same online capabilities and management resources.
According to PhoCusWright, corporate meeting expenditures will be near $76 billion dollars in 2008; 67 percent of that amount will be spent on meetings of 50 attendees or less. Though their products differ somewhat in scope and detail, integrating a corporate meeting card solution into your total travel program means more control, better visibility, more accountability and, ultimately, more favorable negotiations for future business.