Published: November 01, 2011
In 2008, Rockwool introduced ING’s Corporate Card Solution for employee expenses in order to increase convenience, control and process efficiency. This article considers some of the factors that contributed to our decision, shares some of the experiences we have had, and outlines the outcomes and benefits of using the ING Corporate Card Solution.
Before implementing ING’s Corporate Card Solution, Rockwool employees could receive a fixed salary advance to fund business expenses, or could obtain cash in various currencies from a cashier’s department before embarking on business travel. Employees then accounted for their expenses by completing a manual declaration form and refunded surplus cash back to the cashiers. Cash stocks were then periodically inventoried by two people to check balances.
There were a number of limitations in this arrangement. Many different currencies needed to be stocked, and the process of issuing and refunding expense amounts was labour-intensive, prone to error and difficult to reconcile. There were often disputed amounts that needed to be investigated and the forms process was cumbersome for employees.
As a result of these challenges, we made the decision to change the way that we managed employee expenses processes with a view to reducing errors, disputes and the risk of fraud, increasing convenience and automating processes. We were already aware of the opportunities that corporate cards offered, and benchmarked the available offerings. We chose ING as our provider based on the quality of the existing relationship that we have with ING and the ability to integrate the corporate card programme within our systems. Besides this the ING solution is cost-effective and provides considerable flexibility.[[[PAGE]]]
Working with ING to deliver the Corporate Card Solution has proved very positive. Two implementation managers who understood our business needs and technology environment worked with us closely throughout the process to ensure that the project was as efficient and timely as possible, and that any project risks were mitigated. In addition, ING helped us to reduce the workload associated with the implementation, such as by providing an automated file so that we did not need to complete an application form for each cardholder, which greatly reduced the time and administration effort required during the initial setup.
An important aspect of the project was to introduce an effective reporting tool, and therefore we implemented MasterCard’s Smart Data Online (SDOL). To support effective reporting, it was important to set up the right coding structure and hierarchies of entities, cost codes, merchant codes etc. and map these with the general ledger. When MasterCard’s smartdata.gen2 became available, we recognised the advantages in terms of additional intelligence on expenses activity and supplier spend, and automating integration with our corporate systems.
During the migration to smartdata.gen2, on which we went live on 1 January 2011, we reviewed our initial setup and merged various legal entities. We made the decision to build the revised hierarchy structure directly in the new system rather than in the previous version, so we switched to the new structure when we transitioned to the new system.
Implementing the ING Corporate Card Solution has delivered a variety of benefits to card holders, corporate functions, and financial management alike. From a card holder perspective, the experience of using largely accepted cards has been very positive. Employees no longer need to carry large amounts of cash, which adds to their personal safety. The process of completing expense declarations is now automated through the reporting system, so employees simply need to append receipts and approve the declaration, as opposed to completing all of the details. This makes it more efficient and more convenient for employees.
For corporate functions, there is no need to hold large cash balances of cash, eliminating a great deal of administration. With employees no longer having to withdraw and refund cash, the risk of loss and fraud is greatly reduced. Instead, by having the ability to set individual limits and obtain detailed reporting, we are in a far better position to understand and monitor expense activities, to integrate data into our financial reporting, and automate processes. From a financial management point of view, multiple expense reimbursements are replaced with a single payment, enabling better forecasting and reducing transaction costs. Cash is no longer trapped in physical cash, and working capital requirements are reduced.[[[PAGE]]]
Based on the experience we have had, we would emphasise the importance of evaluating the business needs in detail, and involving key stakeholders from an early stage. By doing so, discussions with the partner bank can be more focused and the solution can be designed exactly in accordance with the business requirements. It is also important to determine what functionality will be made available to card holders, and how the transition from previous arrangements will be made. For example, at Rockwool, it was quite different for employees to make use of a card for expenses as opposed to withdrawing cash, so this migration process needed to be managed carefully.
Cash is no longer trapped in physical cash, and working capital requirements are reduced.
Looking ahead, we will produce our bespoke expenses reports directly from MasterCard’s smartdata.gen2 as opposed to extracting the data and producing the final format using spreadsheets. This will remove a final legacy administrative process which will clearly be advantageous.
We now have a considerable client base of card holders using corporate cards for expenses, and based on the success of the programme with ING, we are also considering extending our use of corporate cards into new areas such as purchasing.
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