New J.P. Morgan Report Offers Best Practices in Improving and Controlling T&E Spend

New J.P. Morgan Report Offers Best Practices In
Developing Global Card Programs To Improve And Control
Travel And Entertainment Spending

"As companies focus more on optimizing cash management from a worldwide perspective, firms are increasingly migrating to regional or global T&E card programs for centralized control and visibility into spending," said Alan Koenigsberg, Managing Director and International Business Executive, International Card and Order-to-Pay, J.P. Morgan. "Our new report offers tips on how to most effectively launch and manage a global card program and achieve financial and operational results within a relatively short time frame."

By implementing a global corporate card program, organizations can benefit from improved control of spending; better employee compliance; increased purchasing power from leveraging spend; reduced administration costs; reduced funding costs; and better reporting and data delivery to identify misuse as well as to negotiate better rates with vendors.

Among the best practices highlighted in the report are:

• Develop a strong business case for senior management. Before launching a global card program, firms should develop a well-articulated business case for senior management that details the following: direct cost savings to the company associated with implementing a regional or global program; process efficiencies of the program for company travelers, treasury, finance and procurement and; potential for realizing financial rebates.
• Take a hard look at card acceptance. Firms must look carefully at whether the card they are considering is accepted in the countries in which they are likely to do business. The level of card acceptance will impact cash usage and reporting for the company as employees will have to use their personal card or pay cash for T&E expenses. For example, many firms are now situating shared service centers in Eastern Europe where the costs for well-educated labor are lower. A key question to answer: Is your card accepted there and in other less-developed economies?
• Create a detailed scope of the program before seeking a card issuer. To ensure that any potential snags in the program are identified and addressed in advance, conduct a thorough review before the company's RFP process begins. Take a careful look at factors such as the countries the firm is expanding into, the currencies they wish to deal in and the volume of transactions expected. Is the company accustomed to making centralized buying decisions? Can the firm's corporate office mandate travel policy to all of its regions/employees? What security and protection levels are required?
• Seek a card issuer with global implementation experience. Implementation challenges in different countries include obtaining buy-in, securing lending, coping with regulations and managing contracts. Accordingly, the speed and ease of implementation are major concerns for most firms, especially for large companies with complex structures. When a firm is contemplating implementation of a card program in 20 to 30 countries, the issuer must be able to drill down to a significant level of detail, such as how each employee will receive their card and how they will access the necessary training to use the new system.
• Reporting and data mining capabilities are essential. From the ability to integrate data into their financial systems to the ease of use of their Web-based reporting interface, there are multiple reporting-related issues that must be considered. A major concern is the sophistication of reporting functionality. Can reporting be conducted locally, regionally or centrally? How will the card program support any unique tax-reporting requirements? Does the company require the charges to be billed in local currencies? Will data mining capabilities deliver airline and hotel spend reports down to a very detailed level?
• Consider the financial offer. A key dynamic in selecting any T&E card issuer is the company's desire to leverage rebates. When assessing any financial offer of this kind, factors for careful consideration include the rebate size, any fees and flexibility on payment options. J.P. Morgan recommends that companies undertake a detailed analysis of the potential impact of fee differentials. The difference of a few basis points in foreign exchange fees can turn out to be quite significant over a large volume of spend.
• On the ground expertise. Liabilities and payment terms differ as do local laws and practices in various countries. To avoid potential difficulties, be sure that your card issuer has experience on the ground in the regions your firm is considering.

For a free copy of the report, visit http://www.jpmorgan.com/info/wp/newmigration. For further information on J.P. Morgan Commercial Card Solutions, visit www.jpmorgan.com/commercialcard.

About J.P. Morgan Treasury Services
The Treasury Services business of J.P. Morgan is a top-ranked, full-service provider of innovative payment, collection, liquidity management, trade finance, commercial card and information solutions to corporations, financial services institutions, middle market companies, small businesses, governments and municipalities worldwide. With more than 50,000 clients and a presence in 39 countries, J.P. Morgan Treasury Services is the world's largest provider of treasury management services and a division of JPMorgan Chase Bank, N.A., member FDIC. More information can be found at www.jpmorgan.com/ts.

About JPMorgan Chase
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.0 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about the firm is available at www.jpmorganchase.com.