It’s All in the Cards

What’s the future of Expense Management? One word: Plastic.


The corporate card industry has come a long way from the days when American Express and Diners Club were the only tools a business had to manage its expenses.


The market that once strongly favored the card company has now tilted in the buyer’s favor with the influx of MasterCard and Visa products issued by banks, air travel cards issued through airline representatives, and licensing agreements between American Express and other card issuers.

The savvy corporate decision-maker should now look at cards as part of both its cash management and expense management strategies. No longer are cards a mere replacement for a traveler’s cash advance. They’re now a valuable tool for procurement, travel, and entertainment, as well as for meetings managers who coordinate with the finance department. One size does not fit all. You may find the need to have several different cards to meet the various needs that a simple piece of plastic can satisfy. Such as:

T&E (Travel and Entertainment Card)
This is the granddaddy of the card industry, pioneered by Diners Club in 1950. Designed to handle your traveling expenses and eliminate the need for cash advances, the T&E card has developed into a tool for extending float (the time between the charge and when payment is due), reducing risk management costs, budgeting, negotiating with vendors, locating travelers, and satisfying Sarbanes-Oxley, the legislative act requiring public companies’ full financial disclosure. Any enterprise (even non-profits) without a T&E card is asking for trouble — letting travelers use their personal cards shows a lack of control and opens the door for abuse.

Which corporate card you use depends on your needs. Are you global or local? Do you need bells and whistles like detailed data reporting and cash advance, or just 30 days to pay? Does your bank offer cards as part of your relationship or are the card industry big boys fighting for your business? Who will be responsible for paying card statements, you or your employees? A detailed understanding of how you use your cards and what services you need will guide you to the right card for your business. The many resources for helping you make that determination include the National Business Travel Association, the card companies themselves, and professional consultants.

T&P-Card (Procurement or Purchasing Card)
This is the fastest growing product in the corporate card industry. Originally developed to slash administrative costs by replacing purchase orders and accounts payable checks for high volume/low dollar transactions, the P-card has matured into a valuable tool for procurement professionals.


The reporting controls limiting unauthorized activity on P-cards are excellent. The card providers offer software and support personnel that could reduce your need to buy third-party programs or hire additional staff to manage a sophisticated sourcing department.

For some companies, P-cards are taking on new roles including global procurement, stored value, and e-procurement. The applications are limited only by your imagination and the capabilities of each card issuer.

The most versatile option, but not necessarily the right one for all, One-cards carry the user benefits of both T&E cards and P-cards on a single platform. While the concept is unarguably valid, the reality is that a company must be certain it will reap those benefits and can easily comply with all the constraints (such as the inability to distinguish between travel and entertainment expenses) of a one-card program before making this commitment.

Meeting Card
Gaining favor with managers, the Meeting Card is designated for use with individual meetings. Potentially a single-use card, a meeting card aids in managing the many expenses associated with larger meetings, conferences, training, and other similar business “get-togethers.”

A meeting card can be assigned to a specific event and retired when the event ends. All costs for the meeting go on that card account, with nothing superfluous to muddy the accounting. Hotels love them because they get paid faster. Accounting departments love them because billings are explicitly detailed and cash flow is extended. Meeting managers love them because they permit more time to audit hotel bills.


Ghost Cards
Expense accounts that don’t issue plastic are known as “ghost” cards because there’s nothing to actually carry in your wallet. They offer an inherent security feature since these accounts can’t be swiped through a pirating machine. Plus, no signature on the back of the card means greater flexibility in terms of who gets to use it.

Ghost cards are enjoying renewed popularity for the purchase of airline tickets in managed travel programs, especially where one travel agency is authorized by the company.

For any enterprise, the cards issued to employees should support the business purpose of the employee’s functions. “Because we’ve always done it this way” should never be the reason for continuing an existing program or not adopting a new program. A little research, some common sense, and a desire to adopt better practices will produce results from a powerful tool that is as close as your employee’s wallet.