Payments still a concern
1 Jul 2019 - by Kim Cochrane
A KEY concern for TMCs with government accounts remains the issue of payment. Despite lodge cards being the preferred method of payment for travel transactions, they remain optional for government departments.
“Our biggest worry is the failure of government departments to manage the payments of lodge cards efficiently,” says Kananelo Makhetha of Club Travel Corporate.
Sailesh Parbhu of XL Nexus Travel, says the trade still has a long way to go in educating government departments about different payment options. TMCs need to meet with departments regularly to manage queries, which is often a difficult process to facilitate.
Outstanding payments due to TMCs by various public-sector institutions costs millions per annum in interest, which they are unable to recoup, resulting in major cash-flow problems, says independent business travel consultant, Merrill Isherwood. “Being respectful of the TMC’s payments is critical, as is adherence to the Public Finance Management Act (PFMA) and Municipal Finance Management Act (MFMA) instructions of 30-day payments. Consequence management must be implemented and enforced where there is non-compliance.”
She says National Treasury is doing its utmost to alleviate these payment problems and a designated e-mail address at the Department of Planning, Monitoring and Evaluation – email@example.com – is the path suppliers need to follow to address outstanding payment issues.
For Isherwood, the ideal solution would be to bill all travel services to virtual cards, as they ensure immediate payment to suppliers and protect clients from fraud.
“From a card perspective this is possible, except for car rental due to unknown mileage costs upfront that impact on airport surcharges and tourism levy values.”
Legacy Hotels’ Hara Jackson says there has been a significant improvement in terms of government payments to suppliers through travel agencies/PCOs and directly with suppliers through purchase orders. Some departments are still lagging behind though.
She highlights another concern, which is the proposal by government to implement and manage a one-stop travel agency hub for all departments.
“Agencies are not in agreement, but this is still a thought process and discussed openly in workshops and seminars as a concern.”