Ten ways to evaluate a global commercial card programme
Today, more than ever, multinational corporations need to effectively manage their procurement and travel expenses – detail-intensive processes that take place on a diverse and shifting playing field. In this context, commercial card programmes offer great promise, but for multinational corporations, a consistent global approach is a critical requirement. With more than 200 programmes to choose from, offered by a broad range of institutions, making the right choice requires a thorough knowledge of your own requirements. The following questions can help you evaluate a global commercial card offering, or determine whether your current one is making a meaningful impact.
Breadth and depth of global coverage: are card programmes offered in the countries where you need them?
In order to serve your geographically diverse needs, the card issuer must be able to demonstrate a strong and comprehensive presence in each region where your company does business. For instance, if your company is based in North America, with subsidiaries in Latin America and Asia and sales offices in Europe, the commercial card programme should support your requirements. It should put the utility of the cards in the hands of your critical employees to streamline their travel and procurement payment needs.
As a general rule, a global commercial card issuer should be able to provide you with broad merchant acceptance as well as with technical and customer support in the major European countries and the industrial centres of Latin America and Asia, and have capabilities in Eastern Europe and Russia.
Processing systems: are they proprietary or third party alliances?
As the pivotal ingredient in thousands of management decisions, the quality of data is critical. But in order to issue and service cards in locations all over the world, many issuers form alliances with banks and processors in various regions with contractual agreements based on a commitment to the issuers’ rules and regulations. In the real world however, these alliances are challenging to maintain and there are often problems with data compatibility, pricing and customer service support. A better alternative is to find a global issuer with a proprietary processing system and customer service centres. Such a provider can take data feeds from all over the world and maintain much tighter control.
Data delivery and integration: can data be provided in a consolidated format and be integrated with your various financial systems?
The issuer’s ability to transform your data into usable information is a critical element allowing you to make informed business decisions. Find out if their capabilities include a data normalization programme. Data normalization consolidates data feeds from multiple processors in countries all over the world, and makes it available to you for reporting, as well as for integration into other systems such as the financial modules of your ERP system, or your automated travel expense-reporting package. It also keeps the original source available for review should you need it. Choose an issuer who can take data in “your way” and send it back to you the way you need it – as a report, a file or an online reporting tool.
Richness of data: what level of data can be provided?
What level of information do you need to manage your business? In the commercial cards world, Level 1 is what you see on a retail credit card receipt with merchant name, date and total amount spent. Level 2 provides additional details related to merchant tax status. Level 3 provides the line item detail that shows quantity and price of each item purchased within the transaction. Select commercial card issuers can provide detailed travel addendum data that allows you to make average cost comparisons or examine a particular class of airline tickets or breakout the details of hotel charges showing the amount spent for extras in hotels, such as room service, movies and telephone.
Reporting: will standard reports meet your needs or will you be able to access ad hoc reporting tools?
Is the issuer able to provide information the way you need to see it and use it? For instance, if you want to negotiate price with a major airline, and need to know how much your company spent on the most frequently travelled leg, such as London to Hong Kong, could the issuer deliver that report? Or would you be stuck with standard reporting and need to cross-reference from other sources? Ad hoc reporting tools can respond to specific queries by searching your company data for narrowly defined information.
Taxes: what type of services and reporting are provided?
Tax reporting is critically important, especially for companies that do business in countries that charge a Value Added Tax (VAT). Seventeen per cent of millions of dollars of your company’s business is too much to give away. This is money that can and should be reclaimed. But making this happen is a detailed and time consuming process, since the tax authorities of each VAT country require an approved electronic invoice. Ask the issuer whether they have certified their process with the tax authorities in each VAT country and how that will work for you. In addition, find out if they provide reporting tools that can help your company pinpoint millions of dollars in VAT that should be reclaimed.
Implementation: what support will be provided?
A smooth implementation is key to a successful card programme. Be sure the issuer has a dedicated team that will assist you with every stage of implementation and provide comprehensive tools to help you communicate with your employees about the new programme – and if this support goes past implementation, to grow your programme and find additional ways to save money. There should also be a technical team that will work with you to set up file delivery and integration with your ERP or financial systems. In addition, they should be able to provide you with training and access to Web-based programme management and reporting tools.
Customer service: is it proprietary, a third party alliance or non-existent?
The provision of customer service is another case where issuers who offer global programmes rely on alliances with other banks and processors. But the primary concern is the ability of the responding entity to provide the right answers in a timely and courteous manner. As a general rule, service centres tend to reflect a client-driven philosophy that rewards superior customer service. A third party alliance may have a similar approach, but the need to refer problems to successively higher levels of authority can potentially result in costly delays.
And while you’re asking about service, be sure to ask about fraud detection. Does the issuer utilize an early warning system? What other precautions do they take? You’ll find that issuers with the lowest fraud rates tend to be the industry leaders.
Innovation: are any enhancements offered to a traditional commercial card?
Innovation is both externally and internally driven: externally by changing client needs and internally by the issuer’s drive to stay ahead of competitors. In either case, innovation requires significant and ongoing investment on the part of the issuing institution and for this reason, is usually the purview of industry leaders. Although there is no question that issuers of any size are capable of good ideas, those without scale lack the resources for global implementation.
Experience: how much global experience does the issuer have?
By the time you’ve identified the commercial card issuer that offers the best answers to these questions, chances are this is also an experienced global participant – with a track record of serving corporations, governments and institutions, in countries all over the world. If this is the case, there is one last question: What does this issuer bring to the table that you don’t already have?
The obvious answer is information. But what you really want to know is, how much?
How much information can the issuer give back to you to help you manage your business? The answer resides in the global capabilities of your commercial card issuer – and in their willingness and ability to deliver a comprehensive solution that fits your specialized global requirements.
Evaluation:
The 10 questions discussed above can serve as a checklist for evaluating a provider, or as a discussion guide to use for your meetings. Implementing a global commercial card programme is a big commitment, and for many companies, a major change. The time it takes to learn about the issuer and the organization behind it, its infrastructure, its people, its commitment to technical and service improvements, is time well spent. The right commercial card issuer can have a significant impact on your business and financial processes – adding value and consistency to every dollar your company spends.