Consider these two scenarios for a company that provides employees with company credit cards that carry personal liability:

Scenario 1. The employee completes the expense report and uses the company credit card. The company reimburses the employee for all credit card and out-of-pocket expenses. The employee pays the credit card provider. Time-to-pay is based on how quickly the company reimburses the employee and when the employee opts to pay the credit card provider.

Scenario 2. The employee completes the expense report and uses the company credit card. The company reimburses the credit card provider directly on behalf of the employee and reimburses the employee for out-of-pocket cash expenses. Time-to-pay is now in company control, which could reduce it to as few as three days.

Companies with strong travel and expense purchasing power generally receive rebates from the credit card provider. If a company is able to reduce the time-to-pay by implementing scenario 2, an enhanced rebate is achievable and the cost impact can be significant. A key factor in the calculation of the rebate amount is the average of the company's time-to-pay.

The use and management of corporate credit cards is a focus in today's business travel world for reasons like this. Companies can also realize savings through eliminating the majority of paper receipts processed and stored, accelerating completion of the expense report, preventing fraud as receipts cannot be altered, and enforcing travel policy related to the company's credit card usage.

Many types of credit card programs are available to the corporate organization. However, the use of these programs can vary significantly. SAP Travel Expense, part of SAP Travel Management, supports credit card feeds for all program models. SAP does not impose any additional charges for the functionality. However, credit card providers' monthly charges vary.

I'll introduce you to the concept of credit card partners of SAP, the business process for electronic receipt management, existing credit card options, trends of existing SAP customers, and best practices in travel management. The focus is on SAP Travel Expense and the management of electronic receipts imported into R/3 from the credit card provider for prepopulation to the traveler's expense report.

SAP Credit Card Partners

Each credit card provider maintains a standardized file format for importing files into expense reporting solutions. In addition, SAP has a standard file format for the acceptance of the credit card file data. Therefore, SAP maintains partnerships with credit card providers to offer transmission of the credit card data into SAP Travel Expense. The credit card partner is responsible for the creation of a file reader to translate the credit card provider format to the SAP format. SAP is responsible for the quality, testing, and upgrade maintenance only for files that the credit card partner has agreed to translate to the SAP format. SAP offers credit card clearing for specific file formats with AirPlus, American Express, Diners Club, MasterCard, and Visa. For further information, contact your credit card provider.

You may also find information at help.sap.com. Look for "Credit Card Clearing Travel" and click on Credit Card Clearing - highlight.

In addition to prepopulating the employee's expense report with the receipt data relevant to the report, all data on the credit card file feed is available for analytic reporting in SAP Business Intelligence (SAP BI). While the critical information necessary for the expense report is sent to the traveler in SAP Travel Expense, significant data is still available on the file for reporting, analyzing trends, and enforcing the travel policy. InfoCubes are available in SAP BI specifically for SAP Travel Expense, so customers can map the specific areas for analysis. You should check with your credit card providers to see if they offer premapped data to SAP BI. However, if you do not use SAP BI, the data is still available for mapping.

Business Process — Employee

The employee's individual credit card data is maintained in the mySAP HR infotype 0105 (communication). Subtype 0011 enables credit card clearing (direct feed into SAP for electronic receipt delivery to SAP Travel Expense). It provides the ability to store the name of the credit card provider, account number, and validity dates. Beginning with R/3 Enterprise 4.7, you can store multiple credit card numbers and providers for corporate and purchasing cards.

Figure 1 illustrates how an employee can check and view in mySAP ERP 2004 receipts as they are received to complete the expense report.

Figure 1

Access credit card receipts that have been received in the Overview section of the SAP Travel Expense home page

Additionally, an organization can allow employees (based on their roles and security restrictions) to maintain their own credit card data in My Travel Profile via their home pages (Figure 2).

Figure 2

Individual employee credit card data (can be restricted for view only)

As technology evolves, credit card providers differ in their options for an initial file feed to the employee master data with a separate file feed (not currently supported by SAP). Although SAP does not currently offer an out-of-the-box import for these files, customers can create their own importing program to update employee credit card numbers in the HR master data. This file is useful for automating the initial pre-population versus having employees manually enter the data. Many organizations elect to manage credit card employee data internally (versus giving employees access) for tighter controls and fraud prevention (i.e., employees cannot enter their non-corporate, personal credit cards).

If the employee is not using the pre-trip approval or online booking functionality of mySAP ERP Travel Management (a previous trip would already exist), the next step is to create a new expense report. After entering the general trip data (dates, times, destination, purpose of the trip), the employee enters the receipt information. Two options exist:

• Enter paper receipts (non-credit card purchases)

• Pre-populate the expense report. The employee can view the receipts via a clipboard and import them to a specific expense report.

For credit card receipt entry, the employee uses a drop-down menu to assign expense types to receipts (Figure 3). The text message is based on organizational preconfiguration. The employee has personal options on how he or she would like to view receipts: all receipts, receipts for this trip period only, or receipts for specific dates.

Figure 3

Select from the preconfigured organization's preferred expense types for paper receipt entry

The receipts are displayed showing the expense type, amount, currency, date, description, and the credit card provider (graphical images are available beginning with mySAP ERP 2004). The employee can manage the receipts by selecting the applicable receipts and assigning them to the expense report. Figure 4 shows the new user interface in mySAP ERP 2004, which represents an improvement in ease-of-use for display and management of the expense report process (including receipt numbers and scrolling capabilities).

Figure 4

Employee selects the credit card buffer to import receipts to the expense report

Tip!
The best practice is to receive credit card files daily. The average length of time from the point of purchase to receipt availability in the expense report is three days.

Figure 5

Employee view of the credit card receipt buffer

During the configuration of credit card clearing, the organization determines the mapping of receipts to specific expense types and the General Ledger (G/L), resulting in faster expense report completion and transparent integration to mySAP HCM and mySAP Financials. If the organization has determined that it will pay the credit card provider on behalf of the employee, the description field designates this as a "paid receipt." Thus, this paid receipt would be captured in the credit card provider's vendor account in mySAP Financials for payment processing. Split reimbursement functionality enables the vendor and the employee to be reimbursed (employee reimbursement can be via payroll or accounts payable).

The management of multiple credit card scenarios was enhanced in Release 4.7 to offer additional flexibility for organizations using different card types. For example, an employee might have a corporate card for travel expenses, a purchasing card for non-travel related expenses, along with air travel purchased on the organization's Business Travel Account (BTA)/ghost card. Therefore, employees would see all of these credit card items in their buffer. The behavior for payment and G/L assignment is determined based on the business process preference. An organization can use credit card clearing for all of types of credit cards, regardless of who is reimbursing the provider.

The example in Figure 6 illustrates an employee making a payment to American Express for a corporate card with personal liability. Note that company pays the airfare from a BTA/ghost card. Therefore, payment will be made directly to American Express by the organization. The airfare would be deducted from the reimbursed amount to the employee.

Figure 6

Receipts from the credit card buffer automatically prepopulate the expense receipts area

Once the employee has finished the receipt entry, he or she reviews and submits the expense report. Figure 7 illustrates a summary of the expense report, amount paid by the company and the reimbursed amount. In mySAP ERP 2004, the employee has the option to save the expense report for further completion, without triggering a work-flow in SAP (if SAP workflow functionality is implemented), or to save and submit along with an electronic signature.

Figure 7

Employee reviews Summary and submits expense report

Business Process — Itemization of Receipts

The majority of organizations require employees to itemize a hotel receipt on a daily, per expense-type basis. Currently, these receipts are delivered as a lump sum single receipt from the credit card provider. In Release 4.7, SAP standard delivers an itemization wizard to streamline this process for the end user, along with controls to ensure enforcement of the travel policy.

A best practice is to itemize hotel charges to reduce the employees' ability to hide charges, such as a mini-bar or in-room movie, in the overall bill. In addition, you can conduct audits to ensure the employee has received the proper negotiated rates and services from the hotel property, such as free high-speed Internet access.

Enhanced cost savings can become apparent for an organization by identifying the exact cost of a trip based on key SAP Travel Expense spending areas worldwide. You can identify purchasing trends to maximize vendor negotiations or identify areas of concern for further audit.

Once employees take a hotel receipt to the expense report from the credit card buffer, they have the option to select the hotel receipt and click on the Itemize button. Details of the receipt are displayed (Figure 8).

Figure 8

Use Itemize button to show details of hotel expenses

The functionality provides the option to deduct personal expenses for non-reimbursement (gift shop, movie). The user can create reimbursable receipt items according to the expense-type drop-down. The date of the expense can be adjusted or a number of items can be automatically created that pre-populate the correct date. For example, the employee had two breakfast meals at the hotel for an identical amount. The user enters the number of items as two, and two receipts are created based on the first and second date of the expense report (resulting in less data entry for the end user).

Figure 9 shows that the employee has itemized the hotel bill. The subsequent receipt items are created in the expense report.

Figure 9

Hotel receipt is itemized with individual receipt expense items in the expense report

Business Process — Financials

SAP Travel Expense is automatically integrated with mySAP Financials. During implementation, for example, expense types are configured to specific G/Ls and vendor records can be created for payment to the credit card provider or employee. In addition, the results determined in travel expense accounting are posted in corporate financial accounting and included in the cost accounting processes of corporate controlling.

Cost assignment functionality enables the distribution of the expense report based on the cause and effect of the trip. You can, for example, distribute travel expenses to SAP cost elements (such as cost centers, order numbers, or projects) by receipt, percentage of the expense report, or a specific amount. Cost assignments are transferred to corporate financial accounting and controlling.

Settled trips are summarized in posting runs that check the information and create trip-transfer documents. The SAP system assigns an internal key to these documents, which is later copied into the corresponding posting of documents in corporate financial accounting. This enables information to be transferred to financial accounting in one or several logical systems. From a financial accounting point of view, financial documents related to travel are always fully traceable for audit purposes.

Corporate Credit Card Programs

Most organizations contract with a credit card provider for employees to make company-related purchases of goods and services via corporate or purchasing cards. I'll review the types of corporate credit card programs briefly. For more detail on the types of card programs, including current trends and best practices, see the download "Corporate Credit Card Programs" at the bottom of the article. 

Corporate Card with Personal Liability

This program requires an organization to contract with a credit card provider to have cards issued in the company name. However, the liability for payment is the personal responsibility of the employee.

Particularly in the US, this is the most popular model. The corporate organization signs an agreement with the credit card provider, but the payment liability is the responsibility of the individual employee. In this model, the traveler receives a monthly statement from the credit card company and is responsible for payment to the credit card provider.

Corporate Card with Company Liability

The corporate card with company liability — for travel expenses or purchases — is identical to the corporate card with personal liability, with one exception: Liability for payment is placed on the company instead of the employee. The same trends and best practices apply to both models. Companies can enhance credit card rebate negotiations, however, by leveraging the guaranteed, on-time payment.

BTAs, Ghost Cards, and Lodged Cards

BTA, ghost card, and lodged card are regional name variants for the type of credit card account used for the purchase of airline tickets and hotel room blocks for meetings and conventions. Companies prefer this type to enforce the use of the preferred travel agency, for better management of unused airline tickets, and to eliminate the need to reimburse the employee twice (once for the purchase of the airline ticket and again when the trip is actually taken). For example, if the company wants to encourage employees to purchase airfares in advance for the most cost savings, the company pays the charge directly.

A company might have corporate/personal liability cards issued to the traveler for hotels, car rentals, and meals, and have all airline tickets billed to a separate account (BTA, ghost card). The individual employee does not hold a physical card, known as walking card, for this account. The liability is placed with the company instead, and the provider bills the company monthly.

Purchasing Cards

For efficiency, an employee might need a purchasing card for multiple reasons, such as approvals, reduction of paperwork, consolidated reporting, cost assignment, financial reconciliation. For example, a field technician may not travel, but needs to purchase supplies for the services provided to a customer while in the field. The organization wants to control the authorized merchant, amount of the purchase, and types of purchases. The organization can control purchases by setting controls around the type of card used. For example, with a travel expense card, an employee may not be able to make a purchase at a department store, but another employee with a purchasing card might. Purchasing cards or so-called "p-cards" always carry corporate liability for payment.

Debbie Peake

Debbie Peake is a 25-year corporate travel management industry veteran. She has worked for SAP for more than five years dedicated to the business development, product management, and marketing of SAP's Travel Management solutions. Debbie has previous experience working for global distribution systems, mega-travel agencies, airlines, and corporate travel management consulting.

You may contact the author at debbie.peake@sap.com.

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