The Aryan Lunch

by OrtusClub on 20th December 2018

The Aryan Lunch

May 23, 2018

‘THE USE OF CORPORATE CARDS IN SINGAPORE’ 

In May of 2018, The Ortus Club brought together CFOs and Heads of Finance from prominent firms in Singapore to discuss, debate and share experiences on the use of corporate cards within their companies. The lunch was hosted by VISA, a global payments technology company working to enable consumers, businesses, banks and governments to use digital currency.

As technology evolves and individuals become accustomed to cashless payments, the use of corporate cards continues to grow in popularity, especially within multinationals. Yet, despite its benefits, a lot of companies only issue corporate cards to top management. The discussion was guided by the following questions:

  • What percentage of employees in Singapore is issued corporate cards?
  • What kind of payments are corporate cards mostly used for?
  • How long does it take companies to consolidate a full set of cash flow analytics?

WHO IS ISSUED A CORPORATE CARD

When participants of The Aryan Lunch were asked how many employees within their respective companies are issued corporate cards, the majority responded that only their senior management was.

WHAT ARE CORPORATE CARDS MAINLY USED FOR?

When asked which main use corporate cards hold, most participants indicated travel and entertainment with a minority, using it for small marketing and administrative transactions.

ISSUING CORPORATE CARDS TO THE WORKFORCE

The Challenges

What is it about corporate credit cards that make them a part of risk management? Does the liability of unethical spending rest on the employee or the company? During the discussion, it was evident that despite how many people were issued corporate credit cards in their organization, most of them saw that it provided several benefits to their processes, though were ready to admit that it came with challenges as well. One particular participant was very adamant on their dislike for the practice of supplying corporate credit cards and the employees’ use of it. One of the challenges expressed was the large risk factor it came with. The risk of unethical spending and having to chase employees for payment is a real fear faced by several employers.

Another challenge is having to deal with the personal complaints of each employee about their corporate cards and the extent of the benefits they receive from it (i.e. points, credit limit…)

 “The more employees are issued a corporate card, the more responsibility has to be taken by CFOs to police people’s spending.”

The participant explained that despite the liability of the card resting on the employee when it comes to unethical spending, it still remains that largely, at the end of the day, it also rests on the shoulders of the employer.

The Benefits

Despite the challenges companies face when dealing with payment automation and the issuance of corporate credit cards, it does not take away from the fact that there are indeed significant benefits that come about when this practice is properly implemented.

“The advantages of using corporate cards outweigh the disadvantages as it quickens reimbursements and payment processes.”

One of the benefits talked about during the lunch was the data analytics that came with the use of corporate credit cards. One of the participants explained that with the use of these cards, the host keeps stock of every transaction, collecting usable data for the benefit of the employer. Through this data, decision makers can take note of trends in terms of spending for better cash visibility.

Another benefit offered by corporate cards is the credibility it gives employees who need it when traveling. When posed with the question of why a corporate card rather than a personal card, a participant expressed that throughout the organization, you have to be aware that not all employees are credible enough to purchase a business class ticket from Singapore to America, as an example. Providing them with such an alternative gives everyone the convenience of easy payment.

CONSOLIDATING CASH FLOW ANALYTICS

How long does it take your company to consolidate a full set of cash flow analytics regionally?

As the discussion progressed, participants touched upon the topic of how long it takes firms to consolidate a full set of cash flow analytics on a regional scale with 80% of participants confirming access to statistics being within 3 days.

This showed improvement compared to the results reflected on a study conducted by VISA in 2016, where only 34% said they received it within that same time period.

How long does it take to access received funds?

Another topic tackled during the discussion was the amount of time it takes decision makers to access received funds. From the survey presented to the participants, majority of them expressed that they are able to access it within 1-3 days, claiming that as time progresses, their environment allows for quicker and more efficient processing.

If you are an IT leader and interested in being part of the upcoming session, please do get in touch with the group admin, Jessica Circi at jc@ortusclub.com

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