Refresh your travel policy with a makeover.

Organization policies. We love to criticize them. Maybe this is because they are often 1) hard to find when needed, 2) painful to read and 3) lacking in detail, which leaves room for interpretation that is likely to come back and haunt the offending employee. Is this true of your Commercial Card and/or travel policies? The below article from GoldSpring Consulting LLC caught my eye, as it provides common sense advice and encourages readers to consider elements your travel policy might be missing. 

It's All In Your Travel Policy...Or Is It?

by Julie Simpson, Senior Consultant, GoldSpring Consulting LLC

This article originally appeared in the September 2015 edition of GoldSpring Insights, the email newsletter of GoldSpring Consulting. Reprinted with their permission. 

The one constant in the business travel industry is continual change. This truism makes an up to date travel policy key to the success of your program, yet it is one of those tasks that is easily put off. No less than annually, however, your policy needs attention.

First – where is it? If it is a printed document sitting on someone’s desk, dust it off and get it online. Travelers and arrangers need to know where to locate it. While seasoned travelers may look for ways around policy, new employees or travelers appreciate a place to go to find guidance.

One of the challenges and gifts of the online age is demand for brevity. Travelers need quick access to comprehensive information in a format that allows them to quickly sort through and find what they are looking for. Best practice is a sortable, searchable or tabbed online policy. If your company requires extensive rules (perhaps due to government contracts), find a way to capsulize the basics with links to the detail.

Setting up your online tool in a way that reflects your policy is vital to the success of your program. The more your policy can be managed in the booking process, the more likely it is to be followed. Along the same vein, working with your travel management company (TMC) to effectively communicate policy is very important.

Don’t leave your business travelers stranded with questions. Ensure your travel policy is clear and current.

Don’t leave your business travelers stranded with questions. Ensure your travel policy is clear and current.

Related Resources

A Reasonable Person’s Policy for Reimbursement of Tips Paid Out of Pocket, a previous Recharged Education blog post by guest blogger Mary S. Schaeffer

How to Revitalize Your Purchasing Card Policies and Procedures: A Practical Guide for Program Managers and Administrators, available from the online store 

An up to date policy also allows you to manage new industry challenges and address questions such as:

  • Is it okay to pay to check bags? If not always, when? Is it based on trip duration or purpose?
  • Can the cost of a preferred seat assignment be reimbursed? More often than not, seat assignments are available only for an additional fee.
  • What about shared services? Is Lyft or Uber acceptable, treated like a taxi, or ignored?
  • Under what circumstances is an Airbnb property acceptable? Are they part of your lodging program?

Other company resources need to be engaged in reviewing and evaluating your policy as well, such as the human resources, insurance and legal departments. It’s a good idea to have a standing committee in place tasked with reviewing your policy no less frequently than annually – more often if industry changes dictate.

Maintaining your travel policy can be a daunting proposition with so many other demands on a travel manager’s time. If needed, the GoldSpring team can support you in reviewing or adjusting your travel policy.

As the business travel industry continues to shift and evolve over the coming years, maintaining a relevant and up to date travel policy will be increasingly important. Although it is easy to leave your travel policy on the back burner, giving it the attention it deserves is an easy way to get ahead of traveler questions that will arise with changes in the business travel environment.

About GoldSpring Consulting

GoldSpring Consulting provides consultancy services to support all aspects of corporate travel programs, including software solutions to analyze and benchmark programs. GoldSpring’s industry-leading team of experts brings over 100 years of experience and creates custom solutions for their clients’ travel programs. For more information about GoldSpring Consulting and its services, please visit: http://www.goldspringconsulting.com. 

To sign up for GoldSpring’s mailing list, click here.

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Written by Lynn Larson, CPCP

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Give your managers a life preserver.

Are managers to blame for cardholders’ unethical and criminal acts, or do they get an undeserved bad rap? A new internal fraud incident involving a Commercial Card got me thinking more about a manager’s role in fraud prevention and detection. Keep reading to learn about the fraud, manager hurdles and nine tips to help managers be successful.

The Fraud

A friend told me about a sales rep his company recently fired for using a company card for personal purchases. “Jane,” a long-time trusted employee, allowed both her husband and adult daughter to use her card for personal car rentals. In addition, Jane used her card for personal food purchases that did not have any business purpose. Because of her sales position, charges for car rentals and meals were common, so they did not raise any red flags.

The company, which had a corporate liability card program, uncovered the fraud after an automated toll road charge appeared on Jane’s card. It had occurred in conjunction with the daughter’s car rental. When the company did research to determine the associated business activity, they soon realized Jane was in the office during the purported trip. Things went downhill from there.

Is the Manager at Fault?

Upon hearing about Jane, my first question was, “Why didn’t her manager catch this?” When fraud of any kind—Commercial Card, expense report or other—goes undetected, it is easy to blame the employee’s manager. However, while managers’ lack of oversight is often a factor, we should dig deeper. Do organizations set up their managers for success or failure?

The friend who told me about Jane is a manager. He admits he only does a cursory review of his employees’ expenses because he has too much on his plate. He shared, “I only have so much time every day. Administrative tasks like expense reviews are not my priority because the risk of potential expense fraud is lower than the risk to my company if I neglect my unique job duties. At the end of the day, I have to trust my employees, so I can focus elsewhere.”  

Like many organizations, his company also enforces a monthly deadline by which managers must complete the expense review process. While the intent is to hold managers accountable for their important role in fraud detection, the downside is hurried sign-offs without attention to detail. Indeed, to avoid being called out for tardiness, my friend says he meets the deadline regardless of whether he actually performs a complete review. Approaches like this can be a matter of manager survival.  

Manager Hurdles

  • The manager is on overload, juggling too many other responsibilities.
  • The manager resides in a different location than the cardholder (this was true in Jane’s case) and might be out of touch with an employee’s daily activities, unable to recognize fraudulent expenses.
  • The manager is responsible for too many employees. We can debate how many is too many, but try to determine how long it takes to review one cardholder’s monthly transactions/statement thoroughly. Multiply by a manager’s number of cardholders to get a sense of the commitment. 
  • The organization does not require any related training or provide any helpful tools.
Are organizations drowning their managers or providing the necessary support for survival and success?

Are organizations drowning their managers or providing the necessary support for survival and success?

Helping Managers Be Successful

I asked my friend what would help make the reviewer/approver role easier. Our discussion reinforced best practices, but also touched on lesser-used strategies. The tips include:

  1. Pursue senior management involvement in communicating the importance of the manager’s role, so they hear it from the top.
  2. Specifically design training for managers; make it relevant. While they need to understand the cardholder’s role, too, they do not need to learn the same details. Learn more...
  3. Require managers to sign an internal agreement like cardholders.
  4. Mandate annual training on card policies, as well as ensure managers are trained on red flag behaviors that could indicate fraud.
  5. Require cardholders to provide key information for each charge. “Car rental for business trip” is too vague. “Car rental for August 31 meeting in NY with ABC Company” is much better.
  6. Utilize electronic review tools that managers can access at any time. Yes, some organizations still have a paper-based process, which is more tedious.
  7. Send managers a weekly report of their cardholders’ charges. My friend observed that this would make him more likely to spot oddities and ease the monthly review requirement. Then he would not be overwhelmed with seeing a month’s worth of charges for the first time and trying to recall what happened weeks ago.
  8. Provide other reporting, too, such as purchasing  history for the manager’s department, which I described in a 2014 blog post on fraud, along with other tips.
  9. Offer an at-a-glance reference of what managers should look for when reviewing expenses.

I also wonder if organizations should encourage or require a recurring “meeting” on managers’ calendars to reserve time each week and/or month for expense reviews. This sends a message that the task is important. What do you think? Feel free to comment and share any additional tips. 

See also other available resources related to card program controls.

About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…

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Hair-raising data on checks.

Like everyone else in our industry, I have known that check usage for business-to-business (B2B) payments has remained high, but a recent report published by PayStream Advisors goes a step further to help explain why. As a contributing analyst to the report, I was surprised to discover that survey respondents perceive checks as best in four of 10 attributes, compared to other payment methods. For example, 55% rated checks as the option offering the “most complete remittance information.” As the report notes, favorable views of checks influence payment strategy. 

The Prevalence of Checks

Last year, the AP Automation Study by the Institute of Financial Operations (IFO) revealed 52% of survey respondents use checks for at least half of their B2B payments and 32% use checks for at least 75%. The PayStream survey results are even higher:

The report observes, “Although heavy check users are more challenged by high payment processing costs than the other organizations, they are also less likely to change their payment management strategies; the majority of heavy check users have not taken actions to decrease checks and increase electronic payments in the last two years.” Among heavy check users, 40% have taken actions to decrease checks (they are obviously falling short) compared to 81% of the remaining organizations. Indeed, concerted efforts are necessary to reduce checks, including implementing (and enforcing!) specific payment policies, and educating internal staff and suppliers about the benefits of electronic payments. 

Obtain the PayStream Report

The PayStream Advisors’ report, Electronic Payments and Card Solutions in 2015: Perceptions, Realities and Strategies, features:

  • trends in B2B payment method usage 
  • the status of Commercial Cards
  • influential factors for payment strategies
  • a look into payment solution providers

The report is available from PayStream Advisors.

Where Does Your Organization Stand?

Is your organization among the heavy check users? My January 5, 2015, blog post on reappraising the value of card payments included three key questions for organizations to address about their B2B payment strategies.

  1. What will drive your organization to reduce its check volume by adopting more card payments? 
  2. What percentage of B2B payments do checks comprise? 
  3. What is your card payments opportunity?

As you seek increased buy-in for expanded card usage, it can help to first understand what is behind any resistance. Many factors influence people’s perceptions about Commercial Card programs: previous experiences, lack of knowledge, media reports, and resistance to/fear of change. To combat misperceptions, the best approach is to avoid emotional arguments and stick to the facts. 

Face your payment strategy pitfalls head on and embark on some clean up. 

Face your payment strategy pitfalls head on and embark on some clean up. 

Available Education

For those interested in a broad introduction of Purchasing Cards and electronic payables, both of which are key ways to diversify a payments strategy, consider the on-demand course I created for Proformative Academy, an online professional development platform for CFOs and similar. 

About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…

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