8 minute read
With business travel spend forecasted to grow by 28% to $1.8 trillion by 2027, having a comprehensive travel policy and corporate card program is essential.1
The economic impact of business travel growth, and the importance of its resurgence, can’t be understated — especially when you consider that every 1% increase in expenditure results in almost 60,000 new jobs and $4.8 billion in new GDP.2
Relative stability in the global economy has continued to drive growth, which, along with lingering pent-up demand, has reassured CEOs and CFOs that the time is right to get their people back on the road for business meetings. Top business travel markets around the world have returned to or are nearing pre-pandemic levels, reinforcing the momentum of the recovery and boosting spending.
Many companies are also now embracing a hybrid work model, which reduces the opportunity for regular face-to-face collaboration. To compensate, businesses are setting up meetings and collaboration sessions in convenient locations for team building and project meetups. As a result of the increased virtual work model, many new hires now evaluate a company’s travel policy — including the availability of corporate credit cards — before accepting a job offer.
Source: Global Business Travel Association, “Business Travel’s Impact on Jobs and the U.S. Economy” study.
Whatever the reason for business travel, a corporate credit card program can make the entire process more efficient, offering flexibility, visibility and control. For businesses, having expense data all in one place makes reconciliations and oversight easier, while centralizing tasks saves time and resources. For employees, card programs mean they can participate in travel even if they don’t have high credit limits or, in some cases, don’t have personal cards. It’s important to ensure that all employees who travel have access to a corporate card to eliminate personal card use or cash advances.
To get the most out of a card program, streamlining management responsibility is essential. Companies should designate or hire a skilled travel manager who will be responsible for setting an overall travel policy, including:
Source: Mastercardservices.com: “Four ways T&E management can keep up with business travel” article.
When a company mandates cards, it has full visibility into travelers’ purchases or decisions, making it easier for employees to comply with travel policies. A corporate card program can limit transactions by allowing only merchant category codes (MCCs) that are related to travel. Additionally, managers can easily keep track of budgets throughout the year, pulling back or loosening controls as needed.
Companies can benefit if they consolidate spend through corporate cards, helping to lower cost through greater oversight and control and increased policy compliance. For example, they can expedite reconciliation processes for managers and employees, eliminate rogue spending through better program compliance, negotiate preferred supplier rates and discounts, or provide incentives like rewards and rebate.
Built-in security features such as fraud protection, spending limits and spend type restrictions help safeguard businesses from unauthorized transactions and losses from theft. And for employees, corporate cards come with added benefits like travel insurance, road assistance, legal assistance and concierge services, making their business trips smoother.
Corporate cards give businesses more flexibility and control, plus convenient labor-saving workflows, while employees can access a payment card that’s accepted everywhere they work and travel, with tools that help them adhere to policies.
At Bank of America, we offer a range of comprehensive solutions with enhanced benefits and 24/7 access to account management. If you have any questions or would like to start a conversation, please talk to your bank representative.
1GBTA Business Travel Index Outlook report.
2 Global Business Travel Association, “Business Travel’s Impact on Jobs and the U.S. Economy” study.
Marzena Maloszycka | Treasury Product Manager, Global Payments Solutions | Bank of America
