Cash vs. Corporate Card Spend: Does it Really Impact Company Savings?

When it comes to buckling down on budget, there are many ways to find extra savings:

• Combine organizational meetings and events
• Freeze or reduce budgets for departments
• Hold down employee pay increases

But with each reduction comes an intangible cost that might be detrimental to your competitive advantage–whether it’s customer satisfaction, employee morale, offering a competitive wage, or limiting the available resources to bring innovation into the market. Fortunately, there’s a less controversial way to drum up extra savings: switch cash spending to corporate cards and gain better control of "invisible" spending.

Why Your Organization Should Reduce the Use of Cash

1. Paying with card is cheaper

When you think about what it takes to manage cash at scale – having to manually count the cash, verify the expense, confirm per diems, and key-in expense amounts – the labor and incidental costs can be much more costly. For example, when employees must manually enter cash expenses, errors can be introduced, and non-compliant spending can slip through. Paying with a corporate card forgoes all of that, posting transaction data right into your expense system.

2. Tracking high volumes of cash is difficult

When your employees use cash to pay for corporate expenses, it can be hard to see what expenses are going out the door. And when you can’t see what’s being spent, then you can’t stop it; meaning there’s a higher risk it might not align with your organization’s expense policy. Here’s why cash can cause so many problems when compared to corporate cards:

• It’s unaccountable and easily abused
• It has less documentation and data
• Tracking high volumes is difficult for finance and AP teams
• Validating manually mapped expenses is more time intensive

3. Fraudulent spending lurks around the corner

Asset misappropriation is one of the most common fraud schemes. For cash on hand, the Association of Certified Fraud Examiners (ACFE) found in its latest 2022 report that the median loss to fraud in a year is $15,000 and lasts an average of 12 months to uncover; the typical velocity (median loss per month) averages $8,300.

Corporate Cards Increase Opportunities for Savings

By leveraging the 80/20 rule, you can encourage more employees to use corporate cards, so your organization can have better controls and visibility. This also makes it easier to connect exact, reconcilable spending data right into your SAP Concur solution. Companies who do this save in many areas, such as:

• Quickly gain visibility into spend: Corporate card transactions can be populated into expense reports within minutes, while cash receipts can take weeks or even months to show up in an expense report.
• Return higher quality of data: Card feeds provide access to digital data that automatically gathers, sends, and verifies where expenses are coming from using bank and receipt information.
• Increased corporate rebates: The more you can put on your corporate cards, the more you can use economies of scale to increase your corporate rebate returns.
• Better opportunity to prevent and detect fraud: With more digital tools to automatically run audits–like with Concur Detect by Oversight–you can flag and address fraudulent spending.
• Increased employee satisfaction: Employees don’t have to pay for company expenses with their own cash, and corporate card spending thresholds can be set to require or forgo the capture of a receipt.

Tips to Increase Corporate Card Adoption

Sometimes, changing your employees' buying behaviors is the hardest part. If your organization needs help encouraging corporate card adoption, use these best practices:

1. Ensure all employees who should have a corporate card have one.
2. Provide training to educate your employees and encourage the use of corporate cards.
3. Make it more difficult to use cash or personal cards.
4. Consider mandating corporate card use for booking air, car, and hotel spend.

SAP Concur Solutions Help You Save More

Our customers’ corporate card programs help them recoup more funds while getting detailed visibility into employee spend. For more information on reducing non-compliant cash spend, download our whitepaper.