Increasingly, companies use corporate cards not only to win business and save money, but also to keep tabs on employees

by Tatyana Gershkovich

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For modern business travelers, it’s taken in the character of valuable a tool as your laptop or small room phone. It can help you win clients and complete deals. You take it everywhere you go mete you can’t eternally use it. And granting that you use it the wrong way, it could get you fired—or worse. What is it? It’s the incorporated card sitting in your wallet, and it’s helping your company honor tabs on you.

The corporate card began as a way to ensure that employees could pay for which they needed—whether last-minute airfare to Chicago or a broiling-piece dinner in spite of 12 clients—to win business. Corporate cards, in theory, work just of a piece any credit card, except that the company picks up the tab. Every month the issuer would send out a statement and the charged with execution—or more often his assistant—would submit his expenses.

Usually in the form of illegible and half-crumpled receipts stapled onto paper that the poor folks in the accounting branch would have to make out. As one can imagine, the opportunities for padding were considerable. Who’s to know if that dinner during pair was for clients or your girlfriend? And the difficulty of separating the legitimate expenses from the non was such that it was oftentimes easier to just frame the check.

But today, thanks to of the present day reporting software, businesses can tighten up their expenses and come to a dead lock the wastage by both more closely monitoring employee spending and reducing the costs of processing the payments. It is progress with an Orwellian twist, however. Big Brother might not understand that which you’re thinking, but he sure knows how you spend your time—and the company’s money.

Corporate cards allow companies further to detailed advice on employee spending. Travel managers can a little while ago use Web-based tools to view itemized purchases of everything from airline tickets to snacks from the hotel minibar. This information helps companies negotiate discounts and "preferred vender" deals with the hotels, airlines, and car rental services that employees use most frequently. The Boston traffic research firm Aberdeen Group found that companies save 1.3% to 3% of their total travel expenditure through negotiating contracts with preferred vendors, and the cost of processing an expense narration is $26 less. "Travel is often thought of as a require to be paid of doing business," said Andrew Bartolini, a commercial card analyst for Aberdeen. "But today’s avocation climate demands that strict attention is paid to the largest controllable charge in the compass of the average company."

"Cash is good for gangsters, still these days it’s not the preferred method according to paying for anything," said Frank Dombroski, managing director of commercial card solutions at JPMorgan Chase (JPM). "From the company point of view, it’s about information management. Travel cards allow a single point of access to all of their transactional data, by vendor, by city, and by type."

JPMorgan Chase is the largest issuer of all Visa (V) and MasterCard commercial cards (excluding prepaid and debit cards, to what Bank of America (BAC) leads). It is the fourth-largest issuer of corporate cards for go and entertainment expenses (T&E), behind Bank of America, Citigroup (C), and U.S. Bank, the retail division of U.S. Bancorp (USB), according to data compiled by the agency of The Nilson Report, a leading trade publication.

A typical Standard & Poor’s 500-stock index social meeting saves more than $2 million annually by using corporate travel cards, according to a study from RPMG Research. Automotive parts manufacturer Tenneco (TEN), for instance, spends more than $20 million annually on business travel.