We currently have two types of cards—T&E and procurement cards. We are considering going to one card; can you provide us best practice?

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According to our periodic surveys of T&E expense reimbursement practices from 2008 to 2013, the percentage of organizations using a single card for both travel and for other purchasing has gone from 14 to 16%, though that falls within the margin of error, so the reasonable conclusion is that the approximately 15% of organizations employ a “one-card” company credit card.

The best practices are the same as with each of your separate card programs, with particular attention to the particular goals you have for the program. One $4.6 billion company using a single card told us they do not divide T&E from P-card spend—they don’t look at T&E as a special category—it’s merely another kind of spend (that’s not to say they don’t account categories, etc., but they do not care about “T&E” as a wholly separate expenditure—it is a cost of doing business).

The traditional reason most often given for not using a single card has been the issue of liability with regard to T&E spend. However, according to the 2013 Travel Card Survey by RPMG, use of corporate liability agreements has increased to more than 70% of survey respondents, while use of individual liability agreements decreased to less than 20%. So this concern has diminished significantly over the last decade. (P-cards, of course, are corporate liability programs.)

Best practices aim to ensure full and proper use of cards. To succeed, you want to be sure that everyone that needs a card has one, with spend limits (one-time and monthly) set appropriate to the user or group of users, as well as judicious use of spend category restrictions (MCC limits). A program whose restrictions are too tight result in frustration and under-utilization.  Of course, you need to have a policy for card use, and an annual sign-off by cardholders that they have read, understood and will comply with the policy.  Among other things, it should spell out consequences for failure to abide by the policy—and these consequences must be enforced to be effective.

Design an effective approval and review process involving managers that suits your organization, along with an audit process. Best practice in most situations (and depending on the size of your organization) is for AP to randomly audit statements, not audit all statements.  Ideally, you have an integrated process with data feeding into your accounting system. Proper coding of expenditures is a key element, of course, for accurate reporting and tracking.

We recommend you look at and draw from the policies found in The AP Network’s templates (in Tools Suite) both for P-card Manual and T&E Manual, and determine what to include as you craft your own policies and procedures.

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