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Paying for Business Travel

Using a corporate credit card has some material advantages.

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This story appears in the December 2006 issue of Entrepreneur. Subscribe »

As persuasive as plastic is for consumers, most entrepreneurs don't use it for business related purchasing. According to David W. Nelms, chair and CEO of Discover Financial Services, small businesses spend more than $4 trillion a year, but only a third of them use corporate cards, and just 10 percent of that $4 trillion is charged. Those numbers spelled opportunity for Discover, which recently launched the Discover Business Card for companies with less than $1 million in annual revenue and fewer than five employees.

Targeted card payment systems like the Discover Business Card or American Express' OPEN cards are good news for companies trying to keep travel and other indirect costs down. Using a corporate card for T&E is the first step in any travel management program, whatever the size of the firm, says Caleb Tiller of the National Business Travel Association. With spending information captured centrally, companies gain transparency--they can see in real time what's being spent by which employees on which travel suppliers. Spending patterns, Tiller says, can be evaluated to uncover potential savings opportunities. "Even smaller companies can negotiate discounts with certain suppliers in exchange for market share," he says.

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