Sponsored Interview: American Express Corporate Services



Sponsored Interview: American Express Corporate Services


American Express' commercial card business handles travel, entertainment and purchasing spend of large corporations and mid-size companies. Global Finance spoke with Sanjay Rishi, executive vice president, US Commercial Card, American Express, about the increasing use of commercial card programs by firms to reduce costs and inefficiencies and improve working capital in the order-to-pay process.

How did the recent recession affect the way companies looked at payments?

Companies are under increased pressure to manage their short-term capital. They are focusing on spend visibility and policy compliance while also looking for effective ways to cut costs and enhance employee productivity.

What are corporates doing to reduce costs, and how can their providers assist them?

Currently in the US, 70% of settlements are made by check. Forward-thinking companies are looking at alternative payment solutions such as commercial cards and electronic payments to reduce costs, improve spend visibility and maximize working capital to become more competitive.

Providers are developing vehicles that are looking at everything that happens before they make a payment, from initiation of the order to receiving invoices electronically, to find opportunities to automate the end-to-end payment process. In a card transaction, the client is billed once a month, which gives them better float and predictability of payments. That means a firm's treasury department can better focus on their cash needs. As a result, use of commercial card products is enabling companies to become more competitive. On the supplier's side, if the buyer is paying by card, it also means they typically getting paid earlier.

More than ever, corporates are looking for ways to extract cash from their operations and increase working capital. What's working for them?



Sanjay Rishi, executive vice president, US Commercial Card, American Express

Companies are focusing on extending terms, leveraging discounts and managing key supplier relationships. They are realizing that they need to take a more strategic approach to paying their suppliers. We find that companies are having the greatest success in building a payment strategy when considering a range of factors, including spending policies, financial controls, internal business processes and overall business objectives. Once they develop a payment strategy, firms are able to decide what form of payment is best suited to the type of purchase. It is not just about enhancing cash flow but also about reducing the manual work that is required and improving visibility over transactions, which makes controlling expenses easier and more efficient.

Technology has been a key element in the development of contemporary treasury and cash management. What developments are coming, and what new tools are available?

We are seeing increased interest from our corporate clients for platforms that help them achieve savings, process efficiencies, control and cash flow.

For example, our vPayment technology provides unique account numbers for each transaction that expire once the purchase has been authorized. A single-use account number gives firms an exceptional degree of control, as they can set the time the dollar value of a card is available for and the kinds of transactions it is used for. Consider a company that regularly purchases a commodity such as industrial supplies, for example, and wants to pay via card to eliminate invoices and checks but wants to maintain control over payment amounts. That company would recognize time and cost savings by implementing vPayment.

Another solution, Buyer Initiated Payments (BIP), enables companies to pay for items that typically require an invoice for controls purposes. This also provides the benefit of helping companies to manage working capital. Instead of the buyer sending a payment file to the bank and remitting the funds immediately, they send it to American Express and we make the payments to the supplier, giving the buyer additional "float." If you consider another company that uses hardware, they might find BIP more advantageous because it enables them to approve the invoice as they normally would via their standard controls, while leveraging funds from American Express to extend their days payable outstanding and accelerate payment to the supplier.

What do you see as the key trends in payments?

There are a number of trends we see across our client base. Firstly, there is a move away from check-based payments to card-based and electronic payments, which is driven by the need for information, cost reduction and cash-flow improvement. Secondly, companies are integrating their global card programs with their ERP systems globally to develop a more consistent approach in their order-to-cash cycle across the world and realize a return on their technology investment. Thirdly, firms are using the information generated through card transactions to make better decisions in terms of who they should buy from and how they should pay.








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