Shifting business-to-business payments from paper invoices to commercial cards streamlines certain processes, but many companies still cling to time-sapping policies requiring managers to check each transaction manually looking for mistakes and abuse.
That is changing as more commercial card issuers introduce improvements in card-auditing programs designed to catch errors and variations from corporate spending policies automatically.
The latest to join the movement is U.S. Bancorp, which recently conducted a successful pilot of a new Web-based payment-analytics tool it plans to offer this year at no extra cost to its commercial card users, stepping up the heat in what has become one of the fastest-growing card industry sectors (
U.S. Bank’s top goals in developing its Payment Analytics tool were to eliminate the need for corporations to use manual processes and third-party auditing services and to make it easier for program managers to track and make spending-policy changes, a bank spokesperson tells PaymentsSource.
For example, the tool enables commercial card program managers to react quickly when unexpected developments call for a change in policies, such as switching to a new preferred vendor or allowing a one-time rule exception, Becky Fell, accounts payable manager at the Fargo, N.D.-based hotel chain TMI Hospitality Inc., tells PaymentsSource.
Adopting the tool “revolutionized” the 200-unit hotel chain’s monthly card-auditing processes, which encompass 450 different cards employees use each month to pay a variety of recurring and unexpected expenses for its franchised hotels, Fell says. TMI Hospitality manages hotels in 24 states for brands that include Hilton Worldwide, Marriot International Inc. and Choice Hotels International Inc.
Cardholders typically are among hotels’ management staff, and purchases vary widely, from covering small-ticket expenses such as “buying supplies or food when they run out” to making urgent repairs of around $500, Fell says.
Before implementing the auditing tool, eight TMI Hospitality accounting-department employees each spent hours poring over each commercial card’s monthly statement to make sure purchases were appropriate, she says.
The task included ensuring that online purchases matched the correct sales and use tax, spending was within the appropriate range, preferred vendors were used to get maximum volume-purchase savings and there were no unusual transaction amounts, Fell says.
“It was extremely time-consuming, and when there were exceptions to rules, even if they were approved, it would slow things down while we checked on whole chain of approvals,” she says.
Because of the lag time in receiving and checking card statements under the old system, it sometimes could take up to 90 days to reconcile a mistake or an approved exception, Fell says. “Now that can happen in just a day or two,” she says.
U.S. Bank’s new tool also enables the company to monitor unusual spending patterns and exceptions “on the fly so we can see them as they come through,” Fell says.
Card managers can use the tool to note planned exceptions to rules in a desktop program visible to other managers, with ample space to explain the variation or new rule.
The program flags other suspicious transactions automatically, enabling managers to investigate them within the desktop program and add notes for others to see.
“It catches everything and gives us an easy way to explain what happened so the next manager can easily follow the audit trail,” Fell says.
The tool enables accounting employees to focus on improving overall spending processes, such as refining the company’s preferred-vendor list to get maximum savings, she suggests.
“We can concentrate on other areas, with a feeling of confidence that employees are using corporate cards appropriately and we’re getting the benefit of the automation the cards provide all the way around,” Fell says.
The Minneapolis-based issuer is not alone in introducing such a tool.
Citigroup Inc. in November introduced the Citi Global Program Audit Tool, which enables corporations using its commercial cards in more than 40 countries to ensure that purchases conform to corporate policies automatically, a spokesperson tells PaymentsSource.
American Express Co.’s corporate card program for the past several years has included reporting features that enable companies to flag irregular spending patterns, errors, deviations from corporate policies and to receive customized alerts on unusual purchases or amounts automatically, a spokesperson tells PaymentsSource.
Amex offers additional card-monitoring services through third-party partners such as Concur Technologies Inc.
What do you think about this? Send us your feedback.
