There was a time when corporate credit cards were a sign of having arrived in the organisation. But companies are now realising that these cards can be more than just a HR tool — they are using them to streamline expense reporting, consolidate spending information, monitor travel and spending compliance and even reduce costs.  

Here’s how it works. Most banks offering corporate cards also offer expense management and information systems (MIS) that track expense records, so companies can spot spending patterns and potential pain points. “It reduces the need for jobs like account reconciliation, which is simple but tedious,” says Shailendra Tandon, operating partner and CFO, Asia Pacific Healthcare Advisors. “As the expenses get captured in one place, it is better monitored and analysed for trends and anomalies.” For instance, if a business finds frequent travel towards a few main destinations, it can tie up with hotels and cab companies there for better deals. 

American Express India, which has about 70% share of the corporate credit card market in India, points that clients usually save an incremental 9% of travel costs by introducing a corporate card programme — 7% of the benefit is from negotiating better deals with suppliers, and the remaining from improved internal processes. “With better monitoring with MIS, the risk of fraud and forgery is also reduced,” notes Manoj Adlakha, country head, global corporate payments, Amex India. 

Despite the benefits, commercial cards are still not widely used on corporate travel and entertainment (T&E) spending. A recent study placed the B2B T&E market in India at around $36 billion, of which just 4% is serviced by these cards. CFOs say that’s because banks have been focused on growing their retail credit cards business. “Few banks have sold corporate cards services aggressively,” agrees Sumit Gupta, CFO, Utsav Fashions. 

But things are changing. To broaden the scope of card usage, issuers are introducing new services such as payments for office maintenance, repair and operating (MRO) expenses. ICICI Bank, for instance, has a card that can be used for making payments to telecom and utility services. It comes with an information reporting and data management solution powered by Visa, and it can be integrated into a company’s accounting systems. 

Texas Instruments (TI) India, recently started using Amex’s MRO card and MIS service. “Such payments are often spread across offices and a company can lose track of them,” says TI director, finance and operations, Sathya Kalyanasundaram. “We have managed to make these previously invisible costs visible now.” Now all HR has to do is come up with another perk for senior executives.