Numerous methods exist for the payment of your company air, hotel and car expenses. Credit card is generally accepted as best practice, but it’s important to understand the various pros and cons associated with the different types of solutions.
CENTRAL BILLING CARDS
Regarded as best practice in the corporate travel industry, the most popular in Australia being the American Express BTA and Mastercard AirPlus accounts.
- There is no actual plastic and charges are limited to air, hotel and car transactions,
preventing risk of fraud
- Improves cash flow with up to 55 calendar days interest free terms
- Totally transparent as long as the airline/hotel/car is the merchant and bills the account directly.
- Supported by highly detailed online reporting & includes your cost centres, divisions and
financial ledger codes for easy reconciliation
- No minimum spend and no reporting or set up fees
- Includes single use Virtual Card Numbers (VCNs) for air/hotels/cars
- Business travel accident insurance when charged to the Amex BTA
- Eliminates multiple employee reimbursements and cash advances for speedy reconciliation
- Prevents leakage, improves supplier negotiation and duty of care
- Individual cards can be used to supplement any additional travel expenses not included such as taxis or entertainment.
- Does not attract reward points
- You need to pay on time to avoid fees
- Individual or company cards are a convenient solution and virtually all your travel can be charged to the one card, including incidentals such as entertainment, taxis etc., which cannot be included in a centrally billed card.
- Up to 51 days interest free terms
- No minimum spend and no reporting fees
- Transparency (as long as the airlines, car rental and hotels are the merchants, not the TMC)
- Attracts reward points
- Builds your credit rating
- Some card providers include basic travel insurance
- If you don’t have an expense management system, the reconciliation process can be
lengthier than a centrally billed card
- Subject to fraud
- Unless the airline, hotel or car rental firm are the merchants, you do not have total
- Must pay on time to avoid fees
Payment via a monthly statement is limited in Australia because TMCs must pay airlines on a weekly basis. A bond or deposit is often required to protect the TMC, administration and late fees usually apply and if you don’t pay on time, you can be prevented from making any further bookings.
The biggest con with this form of payment is a total lack of transparency. It can be extremely difficult to audit and identify any non-agreed fees or additional charges.