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Five reasons to choose payment through credit card for T&E expenses

In the present competitive business environment, T&E (Travel and entertainment) expenses are playing very vital role for any business organization growth. Though day by day T&E expenses are increasing in almost all the industries, but still it comes under the second most controllable expense category. Thanks to the evolution of travel technology companies and tools those help business organizations to control their T&E expenses effectively by minimizing cost and maximizing revenue, without degrading the quality of services enjoyed by their business travelers.

Being an emerging and fastest growing travel technology company Infiniti Software Solution Pvt. Ltd. is providing travel technology tools and services to more than 120 corporate clients in India and abroad. In the last ten years of our journey we found that most of our corporate clients are choosing two widespread options for paying their T&E expenses. One is Credit Term, where we pay for the travel bookings on behalf of our clients and receive the payment later based on the agreements with the clients and another one is Credit Card, either through BTA (Business Travel Account) or CTA (Corporate Travel Account) cards. It has been found that the companies which are using credit card payment options for their business travel bookings are getting much more benefits than those who are paying through credit terms.

Here are the five reasons explaining the need of business organizations to use CTA/BTA credit cards over credit terms for paying their business T&E expenses.

1. Effective control over T&E expenses by improving policy compliance: T&E expense policies can be mapped effectively with the CTA/BTA cards provided by various banks and other card issuers. Limits on the number and amount of transactions through card, varying limit for each category of business travelers, blocking the of card for specific merchant transactions, etc. are some of the effective options available with BTA/CTA cards, that helps business organizations to have a strong grip on their T&E expenses by improving policy compliance in a better instant way.

In fact, payment through these cards for business travel booking add much more value to the policy compliance services offered by travel technology tools which is not possible up to that mark with credit term payment option.

2. Have a complete track on T&E expenses with the transaction reports: Whenever any transaction is made by using the CTA/BTA card, the expense reports get generated automatically which can be accessed by the CFOs or the travel admins or the business travelers anytime. Those reports can be matched with the automated customized reports of T&E expenses generated by travel technology tools or other T&E expense reports. On the other hand it helps decision makers of companies for further planning, budget allocation and policy making for T&E.

But in case of the credit terms the invoice is generated by the travel agencies which may raise the issue of invoices with the higher fare either by mistake or intentionally. So in order to eliminate this issue and make the transaction more transparent, use of credit cards is the best option over credit terms.

3. Reduce the processing cost and improvise employee behavior: CTA card payment options reduce the need of taking approval for T&E expenses again and again. The rigid approval system actually resists the dynamic booking process and late approval process costs a lot to a company (up to 20% of total loss on T&E expenses arises because of this). As the policies can mapped effectively with the card payment option most of the bookings can be done without approval. Only those bookings not matching with the budget and policy will be directed for approval. The approver can further check the policy and necessities of bookings to take actions accordingly in that case.

Hassle free booking and reimbursement of expenses without complicated approval process make employees happy and bring a significant behavioral change as they can not underestimate the policy and budget in most of the cases. This can't be achieved in the credit term payment mode where each and every time approval is needed for bookings or T&E expenses, which also makes the task of approver and travel admin very much complicated and also makes policy compliance a tough task.

4. Further supplier negotiation: Most of the corporate get promo card or direct offers from airlines, hotels, cabs, etc. or the travel technology companies/agencies try to arrange the same for the business travelers from the vendors. But still there is a chance of further negotiation or getting the booking done with much lesser fare by using card payment option.

Various CTA/BTA card issuers have direct tie-ups with vendors of airlines, hotels, restaurant etc. to provide various negotiations and offers to card users. So companies can get benefited more from those offers provided by credit card which is not possible with credit terms. According to industry insight CTA/BTA card users can get up to 30% and even more extra negotiation or lesser price for booking of airlines, hotels, car rental etc.

5. Additional benefits with secure transaction: There are lots of other additional benefits corporate can get by paying through credit cards which are not possible with credit term payments. One of the major advantages that corporate get by using a credit card as a payment model, is long payback period. Using credit term corporate have to pay back the booking amount to their suppliers (travel agencies) within some days, whereas in credit card they get longer payback period of around 45 days to make the payment. It also eliminates the miss understanding between companies and travel agencies which may happen because of the credit term payment method. Travel insurance for business travelers, secure transaction, multi currency payment facility, points on miles of air travels, hotel bookings and amount of transactions etc., are some of the extra benefits of using card for travel bookings. Those earned points can be redeemed in future bookings to get further concessions.

Different card supplier provides different kinds of benefits to their users. So companies must analyze perfectly and choose the CTA/BTA card best suitable for them according to their needs and requirements. If a company is using the travel technology tool, then that company must try to adopt the CTA/BTA card with which the travel technology company or agency has direct tie-ups.

So, this is a perfect time for the companies to avoid credit term payment for their travel booking and adopt the credit cards along with travel technology tools to get more benefits and make business travel hassle free, enjoyable and more profitable. In short, companies can convert their T&E expenses to a cost saving and even one of the profit making segments by adopting payment through credit cards. That is what incredible!!!

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