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Global Companies to Increase Commercial Card Usage

More than seven in ten (74%) financial, treasury and cash management executives from 11 countries polled are satisfied with their commercial payment card programs, according to Visa Inc.'s Global Cash Management Survey, MarketingCharts writes.

Half (50%) of respondents currently use commercial payment cards to make payments as part of their overall cash management strategies.

Moreover, in the next 12-18 months, 52% of survey respondents intend to reduce reliance on checks and 45% plan to increase their use of commercial card programs.

Survey respondents rely on commercial payment cards to reduce processing and administrative costs (70%); eliminate paper-based invoicing (62%); facilitate receivables and payments (57%); and provide transaction data for better vendor pricing negotiation (46%). Companies also use commercial card programs to increase visibility into cash positions and improve forecasting.

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In the United States, 58% of respondents use commercial payment cards, with Canada close behind at 54%. In Asia-Pacific (AP), 46% of respondents use commercial card programs, whereas 44% of their counterparts in Central and Eastern Europe, Middle East and Africa (CEMEA) and 38% and 30%, respectively, in Europe and Latin America and Caribbean (LAC) rely on cards.

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In all surveyed geographies, companies expect to increase their usage of commercial payment cards in the next 12-18 months: 60% of respondents plan to increase card usage in CEMEA, 48% in the US, 42% in Europe and LAC, 41% in Canada, and 38% in AP.

Importance of ERP Processes

In general, 65% of companies say using both e-procurement and ERP processes is important to their organizations; 45% cite cost reduction due to process streamlining as the primary reason for integration.

In addition, companies say ERP integration enables the following:

  • Availability of transaction data for spend analysis
  • Use of card transaction data for better pricing negotiation
  • Enhanced compliance with commercial policies and procedures
  • Automated expense reporting reconciliation

Impact on Cash-Flow Management Efficiency

Respondents identified cash positioning and forecasting as the least efficient step in their current cash-management processes. The lack of streamlined operational processes and inadequate information and reporting capabilities were also cited as efficiency challenges.

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However, the majority of respondents said they have improved their overall cash management programs during the past year: 68% of companies identify their cash flow programs as efficient.

Overall, companies found that commercial card programs delivered efficiency gains that improved their cash management capabilities. Other improvements from commercial card payment programs:

  • Access to new levels of data
  • Visibility into cash position
  • Help forecasting future cash needs
  • Enabling the implementation of financial management software

About the findings: The Visa Global Cash Management Survey examined the use of commercial payment cards on a global basis. The survey was conducted by Survey.com and involved 800 financial, treasury and cash management executives from 11 countries across five geographic areas: North America; Asia Pacific (AP); Central and Eastern Europe, Middle East and Africa (CEMEA); Europe; and Latin America and Caribbean (LAC).The majority of respondents in the US worked for companies with more than $500 million in sales per year; elsewhere, the majority of respondents were employed by companies with more than 100 employees and annual sales of at least $25 million.

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