The Value Of Corporate Payment Cards

Aberdeen Group announced today that companies that participated in a recent study of payment card usage were able to achieve significant benefits in three primary areas with their payment card program:

• Reduce Transaction Costs -- Utilizing payment cards was shown to collapse the cycle time and overall cost to process invoices and expense reports.
• Improve Compliance -- The automated transaction reporting and processing that is achieved with payment card usage enables companies to significantly reduce unauthorized purchases by employees and effectively monitor transactions.
• Improve Negotiated Savings -- Payment cards enabled increased visibility and control over spend, thus companies were able to negotiate greater discounts with suppliers.

Payment cards which include purchase cards ("p-cards"), travel cards, and fleet cards, were shown to reduce transaction costs savings and cycle process time while increasing spend visibility.

Payment card users also reported significant savings in supplier negotiations due to increased leverage. Yet check usage is still the most commonly used method for payment of business expenses, followed closely by wire transfers. Companies that allow personal credit cards, checks or other form of payments for company expenses generally fail to maximize the benefits of their payment card programs.

Over the past ten years, corporate payment cards have emerged as an efficient and practical way to manage key categories of spend. The typical benefits of payment card programs includes greater employee convenience, reduced transaction costs (including reduced PO/check processing costs), improved spend visibility and an opportunity to leverage supplier discounts and rebates. While companies in the study reported that cumbersome manual processes are affecting employee productivity and are a top pressure prompting change in their procure-to-pay activities, the typical corporate response has been to pursue strategic sourcing strategies rather than seek to consolidate spend under a card program.

To read about the best practices in the implementation and management of corporate payment card programs and the benchmark savings ranges for each of the different card types, download a free copy of the "Corporate Payment Cards: More Value, Higher Savings" benchmark report. The Report is made available to the public through the underwriting of MasterCard Worldwide and Visa International.