Cash Advances for Business Travelers on Way Out : Finance: It costs companies more to deal in cash, and employees usually take more than they need. Single-purpose credit cards and coach travel are the trend.

An increasing number of business travelers now hit the road without a cash advance--and that kind of pocket money looks like it’s about to become an endangered species.

The reason, experts say, is not that people with a wad of company cash tend to spend it all.

It’s that it costs more to deal in cash, from the employer’s point of view, and the average business traveler who does withdraw cash before a trip tends to take out more than he or she really needs or winds up using.

American Express Travel Related Services, in a recent survey of more than 1,900 U.S. businesses, government and academic organizations, found 22% of all companies had banned permanent cash advances--set amounts allotted to employees at the beginning of a business year to cover travel.

When a similar survey was made two years earlier, only 13% had done so.

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The survey also found 71% of private sector companies now either forbid or place limits on temporary or per-trip cash advances.

“Cash is not free,” said Roger Ballou, president of American Express Travel Services Group.

“Cash is very, very expensive. First there is the float. Secondly there is the administration of cash, which is rife with room for error. The cost of reconciliation is extremely high.”

Kim Lewis, director of consulting services for the company, said cash advances represent one of the few areas of “negative float” a company can control, and the use of credit cards provides a better return of data that companies can use for future purchasing leverage.

“There’s also a security issue--a loss for the company if it’s lost or stolen,” she said. “And studies prove that (employees) take out two-thirds more cash than they use.”

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Those who answered the survey said it can cost $10 to $75 to process a cash advance.

The survey also uncovered these items of interest to business travelers:

* While many companies allow employees to travel in comfort on longer flights, using business class, for example, the trend is moving away from such a practice.

* Single-purpose credit cards, for rental cars or hotels for instance, are being replaced by corporate cards designed to cover all expenses.

* International business travel is up, along with the number of U.S. companies opening offices in other countries.