Agencies – and the special expertise their agents possess – have their place: They can be a godsend for employees with complicated itineraries, travelers going to remote locations or large companies with dozens to hundreds of business trips taken each year.

But for many companies, especially smaller ones, agencies may not be the best solution.

If your companies’ typical business trip is, say, one salesperson going between New York and Chicago, the fees an agency charges may not be buying you much. In those cases, you may want to recommend to upper management that they take a second look at the cost/benefit of using a travel agent.

One caveat: If your company does decide to ditch the agent, you’ll want to put some kind of policy in place to limit traveler spending. Depending on your company, that might mean having a designated  point-person in-house to book/approve travel plans. Another option: setting guidelines that encourage travelers to book the cheapest flight — and spelling out reasonable exceptions, such as how much more can be spent to avoid red-eyes, multiple-stop trips, etc.

Total spending on purchasing cards is expected to grow 12% per year between now and 2012, according to the latest “Purchasing Card Benchmark Survey” by RPMG Research. In 2007, $137 billion in transactions were put on p-cards.

The growth is coming from two main drivers:

1. the amount spent per transaction is up 6%, and
2. cards are assigned to more people/departments within companies.

In fact, 80% of companies using p-cards in ’05 reported more p-card spending in ’07. And it’s not just large companies leading the way. More mid-sized companies reported increased spending than any other size of company.

In particular, companies were increasingly likely to use p-cards for purchases of:

• computers and peripheral equipment
• telecommunications services and products
• printing and copying services
• advertising and media, and
• transportation or delivery services.

Why the increase in usage?

It’s all about the bottom line. The average cost to process and pay a transaction on a purchasing card is about $70 less than using the old-school paper P.O./check method.

If your company (or a key vendor) has been reluctant to try p-cards, it’s worth revisiting the issue. With significant savings possible, setting up a card program could quickly make up for any upfront costs.

If you’re worried less about cost and more about headaches and aggravation while you’re switching over, bear in mind that choosing a solid card vendor can eliminate most hassle. And starting small — say, by only using cards in one department or with one vendor — can help you work out the kinks early and minimize disruption.

Here are six questions to put to potential card issuers to compare offers and make sure your company is getting the most bang for its bucks:

1. Is there any cost for participating the rewards program? (If so, ensure you’d earn enough back to make up for the additional cost.)
2. Is there a minimum charge volume you have to reach before rewards kick in? If so, is it tiered? (Example, you’d receive 0.25% back after spending $10k; 0.5% up to $25k; 1% for any amounts over 1%, etc.)
3. What criteria are used to determine rewards? Common factors include: total volume of spending; average spending per card; amount spent in certain merchant categories, etc.
4. Are there preferred vendors with whom we can earn additional rewards?
5. Will our rewards be affected if we already have negotiated discounts with participating vendors?
6. Do we have an option for choosing different types of rewards: travel vouchers, cash rebates, perks like free shipping, etc.

Any advice to share on how to get more rewards from corporate card issuers? Share ‘em in the comments.

a formal written T&E policy.

Sounds like a no-brainer, but in a recent report by Aberdeen Group, only 54% of companies had such a policy. And 12% said they weren’t even thinking about putting one in place.

Bottom line: Even well-intentioned employees are likely to go over spending guidelines or misinterpret the rules if there isn’t a black-and-white version of the policy they can refer to. And not putting T&E guidelines in writing only encourages those employees who are looking to pad expenses and “treat” themselves when they’re on the road.

The good news: Putting together a formal policy doesn’t have to be a major time drain. In fact, the shorter it is, the better. Your goal is to quickly and clearly lay out a few key points. Among the most important:

1. Any spending limits your company has in place for hotels, airfares, meals, etc. (This can be as specific as: “Daily meals shouldn’t exceed $50;” or it can be general guidelines: Don’t fly first class, don’t get room service, etc.)
2. Whether travel needs to be approved in advance, and if so, by whom.
3. Procedures — and deadlines — for submitting receipts and expense reports. It’s also a good idea to point out who needs to approve expense reports before they go to A/P, as well as how often you cut reimbursement checks.

Share your ideas for a clear-cut, effective T&E policy manual in the comments.

As part of the Emergency Economic Stabilization Act of 2008, the feds made official a new transportation fringe benefit.  Here’s the scoop:  

For tax years starting after Dec. 31, 2008, your company can offer a “qualified bicycle commuting reimbursement” as a fringe. For any employees who regularly use their bikes to travel to and from work, you can reimburse up to $20 per month for costs related to buying, repairing and/or storing the bike.

Note: The $20 only applies to “qualified bicycle commuting months.” Although we don’t have a solid definition of that yet, it’s safe to assume employees will have to make a certain percentage of their commute by bike to qualify each month.

With gas still expensive and most folks looking for a way to cut costs, this is a nice little benefit your employer can offer — at relatively little cost.

These days, more Accounting pros are caught in a business dilemma:

You’re under orders to save money wherever you can. At the same time, you’re supposed to hold off on making payments until the last minute to bolster cash flow.

So how do you handle early-payment discounts?

To figure out if forking over the money sooner is worth the discount you’d get, you have to figure out the effective annual percentage rate. Let’s look at an example:

Your vendor offers you a discount of 2% if you pay within 10 days  (2/10 net 30).  In essence, you’d save $10 on a $500 order, if you pay 20 days earlier than usual.  

To figure out the effective annual interest rate, use the following formula, where 360 = days in the fiscal year, and N = the number of days between the discount date and the final payment deadline:

Discounted amount /Discounted price   X  360/N  = Effective annual interest rate

So, in this case $10/$490 X 360/20 = 36.7%.

Rather than calculate the effective interest rate for each transaction, you may want to get upper management to set a threshold for when it’s worth taking the discount and when it’s not. For example, you might make it a policy to take the discount whenever the interest rate is above 20% or would save more than $500.

Bear in mind, even slight changes in the terms can have a big effect on how much (or how little) your company stands to save by paying early. For reference, here’s a list of effective annual interest rates for some common discount terms, as calculated by the American Institute of Professional Bookkeepers:

• 1/10 net 30 = 18.2%
• 1/10 net 45 = 10.4%
• 1/10 net 60 = 7.3%
• 2/10 net 30 = 36.7%
• 2/10 net 60 = 14.7%
• 2/20 net 90 = 10.5%
• 3/10 net 30 = 55.7%
• 3/10 net 60 = 22.3%
• 3/20 net 90 = 15.9%

Another point to consider when you’re debating whether or not to take an early-payment discount is less easily quantified. Some vendors offer other perks to early payers, such as faster shipping, special promotional offers, etc. For vendors you use frequently, those perks may make early payments even more practical.

What’s the policy at your company? Do you take every discount you can, stretch payments as long as you can — or take it on a case by case basis? Let us know in the comments.

For 2009, domestic airfares are expected to increase 12% while international fares will increase between 16-20%. That’s according to Carlson Wagonlit Travel. Much of the increase is driven by fuel surcharges and the fact that airlines are cutting the number of seats per route.

If travelers can avoid taking a plane, your company’s travel costs should be reasonable next year. Carlson predicts hotel rates will increase only slightly next year, due to less demand. And car rental rates are expected to stay flat.