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March 12, 2020

Having Employees Pay for Travel Upfront is Not Good for Business

As an enterprise, it’s safe to say your company has more liquidity than the individual employees who make up your workforce. Not only that, you’re getting better business outcomes from hiring talented workers who are also willing to travel on the job.

Traveling for work can be both productive and exciting, but it can also be challenging for companies, especially when your employees return and seek reimbursement for their on-the-road spend — processing expense reports and managing reconciliation. This challenge arises because it’s common practice in the corporate world to ask employees to front their work travel on their personal credit cards. And it’s surprising that this practice has been taken for granted for so long.

Accepting the status quo, in this case, can actually harm your business overall. Here’s how.

The Problem with Personal Cards

Employees don’t like to wait to be reimbursed just as much as you don’t like chasing them down for their receipts. A traditional corporate card may be a solution, but it can be nerve-wracking to pass out cards to all employees, and you might set up too-strict policies to control spending on those cards. What’s the problem with a too-strict policy? If your company doesn’t deliver a positive business travel experience, especially when it comes to payments, employees will be frustrated and discouraged, which has a huge impact on morale.

Having travel managers, admins, or human resource teams book travel on behalf of employees isn’t scalable either, especially for large, fast-growing enterprises. So what happens? Employees are forced to pay for their business travel upfront, which leads to a myriad of logistical challenges for you - the employer - and your travelers.

As an organization responsible for the wellbeing of your business travelers, you don’t want to put the pressure of personal credit card limits on your employees. It’s embarrassing to have to admit to your employer (who knows how much you make) that you don’t have the credit availability to cover the flight, hotel, and other travel costs associated with a business trip — on top of your personal credit needs.

Travelers might have to open up multiple credit cards to make these purchases. Those of us who have new credit histories — and let’s face it, we’ve all been there — know what it’s like to try to field multiple credit applications and take hits from hard inquiries.

It might be easier to brush off employees who are younger with new credit history, but also consider your more seasoned employees who are trying to save up for a house, or other big life expenses that require solid credit. Employees could even have bad credit history from declaring bankruptcy or other challenges; it’s more common than you might think.

Although companies can tell workers, “I owe you,” bills and unexpected life expenses don’t understand the phrase.

Even so, not every corporate card has the right solution. As an employee, even if you get an individual liability card from your company, they may require you to pay it off with the money they reimburse you with. So you can either wait for the reimbursement to come in to pay it off, or front the payment so your credit score doesn’t take a hit.

Individual liability cards boast stronger compliance and reduced employee misuse, but sometimes employees really do have to book a multi-leg, overseas trip for $5,000 and need the money sooner rather than later. The $5,000 charge isn’t from misuse — there’s a real business case behind it. Failing to understand that not every business trip is the same can be detrimental for employee morale.

Using personal cards or even individual liability cards puts the financial responsibility and risk squarely on the shoulders of your employees.

The Way Forward

You don’t have to give up the reins just because you’ve distributed corporate cards. New, tech-forward travel payment solutions give finance and travel leaders the controls they need over travel spending without adding unnecessary stress to employees.

On a mission to improve all aspects of the business travel journey, TripActions recently announced TripActions Liquid™, a travel payments solution that extends the killer traveler experience and cost savings you’ve already come to know with TripActions into travel payments.

With TripActions Liquid, gone are the days of employees fronting the hundreds or thousands of dollars of travel spend on their personal credit cards. TripActions Liquid streamlines the finance process from all angles, giving finance teams full visibility into travel spend when it happens, instead of waiting for employees to ask for reimbursement after the fact.

Check out our ebook to learn more about TripActions Liquid and how it can solve your travel payment woes.



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