By John Sharman, CEO of Tuxedo
Reports show that for many businesses, expenses account for a significant proportion of overall expenditure – between 8% and 12% on average, which in turn is forcing them to look closely at more cost effective and time-efficient solutions for expense management.
The biggest challenges when it comes to corporate expense management processes are the impact of credit card surcharges, fraudulent claims, unfair expense burdens on employees and the reconciliation / auditing process; all of which ultimately impact upon businesses’ profit margins.
These issues are pushing an increasing number of businesses to move towards cost effective alternatives to corporate credit cards and expense approval and reimbursement.
The move to prepaid solutions is ever increasing and businesses are becoming more aware of the options available, with global prepaid card transaction volumes having grown by more than 20% during the past four years and expected to reach 16.9 billion this year.
As a result we are witnessing an ever-increasing number of small businesses opting for prepaid corporate expense solutions, and businesses can really benefit from switching to more innovative systems such as these. These solutions allow for total control over expenditure, with the ability to view employee transactions real-time, allocate funds by department and individual, employees only able to spend the amount on the card, and the facility to pull unused funds back off the cards into the controlling account.
As well as supporting small businesses, these platforms offer a solution more appropriate for larger companies where there are multiple departments. In these organisations the requirement for managing expenses can be an even greater task, with divisional P&Ls and the potential for more abuse across a wider employee base. Such organisations should look at solutions that can segment card users by division, region etc. These solutions enable the management of these tiered accounts to be delegated; providing a simple departmental budgeting, reporting and administration solution.
In an environment where cost control and operating efficiency continue to be a focus for many organisations, a review of their expense management solution could provide a simple, low cost but highly effective solution.