Mid to large-sized corporations have a vast international presence; this, in turn, has a significant effect on travel expenses incurred by executives to unite, collaborate, and close deals that matter. This raises several important questions- how streamlined is the cost management system, and how can more visibility be added to the money movement to ensure optimized budget allocation?
With companies rapidly scaling operations and increasing headcounts, the secret to your finance team working smart, and not hard, is to adopt solutions that make travel expense management effortless. Gone are the days when inefficient spreadsheets, manual reconciliations, and slow reimbursement processes were enough to keep organizations running smoothly. The more time, cost and productivity savings are compromised using these outdated systems, the higher the likelihood of the business experiencing preventable fraud, duplicated expenses, and hard-to-track variances leading to mismanaged travel expense budgets.
Why Should You Prioritize Streamlining Travel Expenses?
Any money flowing out of the company needs to be monitored, but travel expenses, in particular, are prone to slipping through the cracks and adding to higher-than-budgeted operating costs. The pandemic did put a stop to many travel plans. However, business travel has picked up the pace, and spending worldwide is set to rise nearly 34% in 2022 to $933 billion. With the increase in travel plans, corporate travel managers need to revisit the efficiency, accuracy, and compliance of their expense management solutions to stay in line with their budgeting and financial accountability targets.
The crucial need to diligently manage travel expenses for business matters not just to the leadership but to the staff as well. In The State of Corporate Travel and Expense report 2022, 71 percent of business travelers preferred to use a company card over their personal card, reinforcing employee interest. Sixty-nine percent of corporate travel managers would like employees to pay for their trips with company cards. The inconvenience of paying out of pocket, filing for reimbursements, and waiting for approvals is a huge pain point that needs to be overcome in order to simplify corporate travel for company executives.
Why Choose Corporate or Virtual Cards for Travel as a Solution?
From improved expense visibility, and stronger financial controls, to streamlined reporting, using corporate or virtual cards for travel–such as Nium’s travel cards and payments solutions–to take the guesswork out of expense management is a powerful asset. Designed to function exactly like debit or credit cards in a digital version, it is no surprise that both business travelers and managers said they “strongly agreed” that they preferred to pay for expenses with a company card. In a recent report, nearly 64 percent of corporate travel managers indicated they would be interested in a solution that provides more unification between travel and internal company spending.
Recent market trends also support this need for corporate or virtual cards with market size expected to exceed $9.1 trillion by 2027 from $2.7 trillion currently in 2022 – representing a market growth of 280%. The research also forecasts that the number of virtual card transactions will exceed 121 billion globally by 2027; increasing from 28 billion in 2022, representing a growth of 340%. Similarly, the report, Virtual Cards: Consumer & Business Adoption, Competitive Analysis & Market Size 2020-2025, concluded that business to business (B2B) virtual cards will contribute to a whopping estimated 80% of virtual card transactions by value over the next five years. In fact, the entire travel industry is in agreement that virtual cards for travel are the future of hassle-free expense management; 94% of travel agents, 90% hotels and 86% airlines believe that virtual cards will become a pivotal payment method.
Setting the industry trends and forecasts aside, companies have a lot to gain by making the switch to corporate or virtual cards for travel:
- Time and cost savings; assigned spending limits and easy expense tracking make travel and expense management a breeze
- Better fraud prevention; the virtual cards can be issued for specific purposes, amounts, merchants, time periods, and restricted countries
- Automated transaction reconciliation; no need for time-consuming manual reconciliations and investigating of variances
- Real-time payments; this boosts employee satisfaction due to no out-of-pocket spending or reimbursement lags
- Enhanced security; the card is issued for a short time period with pre-defined expiration dates. Also, each time a payment is made, the payment data used is different to ensure no breach
Nium’s Card Solutions for Effective Cost Management
Regain control of your company’s travel budgets; Nium’s virtual card issuance helps your business focus on growing revenues by keeping track of the travel expenses across the company, all in one dashboard. Freeing up time, providing insights on how to best utilize money, and promoting unwavering policy compliance, Nium’s extensive card network is readily available for use around the world. Virtual, or physical card alternatives, are available with simple spending limits and in-built security tools to ensure your travel expense management processes are fast, reliable, and results-focused.
Want to learn how corporate or virtual cards for travel can transform your company’s travel expense management systems? Our team is ready to help you unlock your fullest potential- schedule a call today!
Original version published on February 15, 2022.