Unlocking the Strategic Value of T&E Expense Management

Unlocking the Strategic Value of T&E Expense Management

May 19, 2016

Learning Objectives

• 2016’s leading technology, trends and best practices in travel and entertainment expense management

• The top system features companies are using to effectively manage T&E expenses across the enterprise

• How improving the T&E process at your company will positively impact the bottom line

• The ways excellence in T&E Management impacts productivity for employees on the road and at the office

Today’s presentation will help you understand:

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Webinar Notes

• Today’s event will be recorded and all attendees will be kept in listen-only mode to eliminate excessive background noise

• Links to today’s presentation and the recording of this webinar will be sent out to all attendees within 24 hours of the event

• Please ask questions on today’s topic via the “Questions” box in your GoToWebinar control panel at any time during the event. We will do our best to answer all questions during the Q&A session at the end of the event. If we do not get to your question, we will follow up with you directly.

• Industry-leading, first fully automated travel and expense management system

• 64 languages, 140+ currencies, clients in 80 countries

• #1 highest rated expense management software for user satisfaction on G2 Crowd

• PC Magazine Editors’ Choice for best expense management software of 2016

• Processing over 30 million expense transactions and $10+ billion in expense reports for 2015

About Certify

Presented By

Ernie Humphrey, CTPCFO & Co-Founder

360 Thought Leadership Consulting

T&E Expense Management and Business Travel Trends 2016

Why T&E Matters

• T&E expense report processing impacts all who travel on company business; sales professionals to senior management

• Inefficient T&E expense report processing negatively impacts employee productivity up and down the corporate ladder

• Ineffective T&E expense report processing and management negatively impacts the bottom line

• Success in forecasting T&E expenses can translate into improved earnings predictability

• Establishing an effective controls framework to tame T&E expenses can be a template for expense management and corporate governance across the enterprise

T&E Spending is Substantial

U.S. business travel spending in 2015(estimate: GBTA 2015)

$310bINTERNATIONAL DOMESTIC

$2,502 $1,002

Average base cost per business trip for air, hotel and car rental(Travel Leaders Corporate 2015)

$1.25tglobal business travel

spending in 2015

T&E spending ranks as the 2nd most difficult operating expense category to control

Forrester Research 2015

25%of all U.S. companies

spend +$1MM on T&E expenses annually

PayStream Advisors 2015

Series1

of total annual budget Aberdeen Group 2015

8-12%

T&E Expenses: More Than Relevant

At 8-12% of total budget, do you know how much T&E expense management is costing your company?

1. Meals 19%

2. Airfare 17%

3. Misc. 17%

4. Lodging 14%

5. Gas 11%

6. Cell phone 5%

7. Car rental 5%

8. Groceries 5%

9. Supplies 5%

10. Taxi 3%

11. Shipping 2%

12. Tolls 1%

13. Parking 1%

How the Expense Budget is Spent

Reference: Certify SpendSmart Report, Q4 2015

Category 2014 2015 Difference

Meals $25.67 $26.06 +1.52%

Airfare $345.21 $274.00 –20.62%

Lodging $213.90 $223.45 +4.64%

Car Rental $193.58 $186.45 –3.68%

Taxi $31.81 $31.82 +0.03%

Gas $40.41 $30.32 –24.96%

Parking $32.70 $32.23 – 1.43%

Cell Phone $89.30 $92.24 +3.29%

Category 2014 2015 Difference

Meals $25.67 $26.06 +1.52%

Airfare $345.21 $274.00 –20.62%

Lodging $213.90 $223.45 +4.64%

Car Rental $193.58 $186.45 –3.68%

Taxi $31.81 $31.82 +0.03%

Gas $40.41 $30.32 –24.96%

Parking $32.70 $32.23 – 1.43%

Cell Phone $89.30 $92.24 +3.29%

T&E Benchmarks: Spending by Category

Reference: Certify’s SpendSmart™ Report, 2014-2015

$6.85fully automated

$17.31 semi-automated

$26.63 manual

PayStream Advisors 2015

28%

19%

5%

48%

Under $7 per report $10−$20 per report $25 or more per report

We do not track these costs

Reference: Certify’s Annual Travel & Expense Management Survey 2016

Average cost to process an expense report

• Hard costs for paper, printing and postage

• Hours to create, review and approve reports

• Time required for reconciliation and reimbursement • Storage fees to archive expense reports • Lost productivity

Hidden Costs of a Manual System

Reducing processing costs is the #1 T&E improvement for 48% of all best-in-class companies

Aberdeen Group 2015

Polling Question 1

a) Paper-based/spreadsheetsb) ERP system (Oracle, Microsoft Dynamics, etc.)c) Web-based expense software (Certify, Concur, etc.)d) Not applicable

How does your organization currently manage T&E expense spending?

Web-based solution (Concur, IBM, etc.)Microsoft Excel/spreadsheetsPen and paperHomegrown solutionERP/accounting package (Oracle, SAP, etc.)

T&E Systems by Company Size

MANUAL SYSTEM USAGE: 70% small businesses | 26% enterprise

22%

55%

10%

5%8%

37%

37%

9%

4%

13%

46%

16%

4%

6%

28%

SMALLBUSINESS

MID-SIZEBUSINESS ENTERPRISE

Reference: Certify Annual Travel & Expense Management Survey, 2016

Improving Expense Management

Are you planning to switch or currently in the process of evaluating vendors for a new web-based system?

37%SMALL

BUSINESS

46%MIDSIZED

COMPANIES

53%ENTERPRISE


62% of all companies planning to make the switch will do so in the next 12 months

Why are companies looking to T&E automation?

Driving Force Behind the Switch

Reimburse employees faster

Improve employee compliance rates to corporate travel policies

Gain reporting and analytics around T&E spend

Provide expense system accessibly from anywhere (online, mobile)

Simplify the expense reporting process for employees and managers

25%

28%

32%

40%

66%


Leading frustrations for T&E program administrators:

50% employees

losing receipts

45% employee’s failureto submit reports

on time

38% time it takes to

reconcile, reviewand approve

30% reviewing for

policy violations

28% errors on

the report


Top Expense Management Pain Points

Expense Management Automation

• Cost savings: reduce costs in time and materials required to process expense reports

• Process efficiency: eliminate data entry and errors, improve administrative reporting

• Increased productivity: mobile and cloud-based accessibility simplify expense management

• Policy compliance: integrate company T&E policies and spending controls

Why do organizations turn to automation?

Integrated Efficiencies

Top web-based system integrations currently in use:

General Ledger

Accounts Payable

Credit Card

67%

61%

77%


Must-Have Expense Reporting Features

Automation: Expense report creation, workflow process and approvals, direct credit card feeds

Mobile Applications: Smartphone-enabled receipt image capture, mobile report creation and approval, and policy tools

Compliance: Duplicate receipts/expenses, category spending limits, automatic notification of violations

Integration: Accounting software, general ledger, HRIS, CRM, ERP, ACH direct deposit

Reporting: Complete visibility into process and spending by category, department, employee

Companies using web-based expense solutions dedicate 83% less funds to processing than with other methods

Aberdeen Group 2014

Polling Question 2

a) We have no formal T&E policy b) Manual review processc) Automated system that flags violationsd) Policy is not enforced

How does your organization enforce compliance with T&E policies?

73%

Corporate T&E Policy Compliance

85%of all companies report having a

written T&E policy in placeof those companies

are manually reviewing for policy violations

Manual policy review is inefficient, prone to error and fraud

Reference: Certify Annual Travel & Expense Management Survey, 2016

Expense Report Fraud

• Expense fraud accounted for nearly 14% of all occupational fraud with a median loss of $30,000

• Businesses with fewer than 100 employees have a 28% higher median fraud loss than those 100+

Association of Certified Fraud Examiners 2015 Oversight Systems 2014

82%

0%5%

10%15%20%25%30%35%40%45%

6%

31%

42%

20%26%

Enforce T&E Policy Compliance

53% of companies on a web-based system


How companies set T&E policy maximums and control meals, hotel and airfare spending:

25%

25%24%

20%

6%

We do not have expense category limits

Based on internal historical spending

Follow U.S. GSA per diem rate guidelines

Determined by annual budgeting process

Other


Expense Category Spending Limits

Travel Booking Technologies

A combination of above

Travel management company

Corporate travel agency

Online travel sites

43%

22%

15%

20%

29%

15%

5%

51%

Manual Web-based


Certify Travel Features for ROI

Pre-Trip Approval:Requires manager authorization prior to booking; configurable by employee, policy specifics, etc.

Lowest Logical Fare:Automatically identifies best available rates for proposed itinerary (and only best available rates)

$

Best-in-class expense management practices deliver an 87% or greater compliance rate to T&E policies

Aberdeen Group 2015

Effective T&E Strategies

Top mobile features for greater efficiency:

• Optical character recognition/auto-fill: snap photos of receipts, automatically parse data into reports

• Mobile report creation: build expense reports from the road as receipts are captured and saved

• Remote approvals: managers can review and approve reports from any location to reduce delays

Top Certify Mobile features:

Mobile expense reporting can reduce processing costs by up to 65%

Aberdeen Group 2014

• Make policy automatic: apply built-in spending caps, reporting requirements (meal attendees, receipts, etc.), vendor preferences, and more for better compliance

• Eliminate duplicate receipts/expenses: automatic system reviews identify duplicate expenses, flag out-of-policy expenses, reduce fraud, and save money

• Seamless travel booking: integrated travel booking ensures best rates and efficient expense reporting, plus pre-trip approvals to maximize spending control

• Manage expense reporting on time: set a schedule to automatically build reports, notify employees and managers, and submit expenses (specific to Certify)

Automate Policy and Spending Controls

Integrations: the Key to Efficiency

Expense

• Accounting systems: automate key accounting functions and streamline workflow

• Corporate credit cards: direct control over employee spending, faster reconciliation

• Corporate systems: reduce data entry and errors across multiple redundant systems

• ACH reimbursement: direct deposit for more efficient reimbursement, simplified accounting

You Can’t Measure What You Can’t See

Actionable insights into key spending and process metrics:

• Spending: analyze company spend by expense category, department, individual employee, monthly reimbursements, etc.

• Compliance: review processed and in-progress reports, policy violations, identify risk and offenders, and improve company compliance rates

• Workflow: monitor people and process; documented path of approvals ensure expenses are reviewed/approved according to guidelines

74 % of companies that automate their expense management process achieve full ROI in one year or less

Certify Annual Travel & Expense Management Survey 2016

1. When is the last time we did a thorough review of our T&E policies?

2. What is the rate of compliance with our T&E travel policies?

3. What are we doing to actively manage our T&E expenses?

4. How do we benchmark our T&E spend?

5. What is the average time it takes to reimburse an employee?

6. What is the current level of automation in our T&E process?

7. Are we using, or have we looked at a cloud-based T&E expense management solution?

7 Questions to Ask at Your Company

1. Review your company’s T&E policies; if you do not have them, create them

2. Improve the travel IQ of employees and take measures to enforce policies

3. Arm travelers with better technologies to simplify expense reporting

4. Automate key components of the expense management process

5. Benchmark company T&E spending regularly

6. Leverage analytics to improve intelligence and data

Specific Actions to Set the Foundation for Effective T&E Expense Management

1. Identify the opportunities• Reduce costs, mobile/remote access, compliance, reimbursement times, etc.

2. Identify technical requirements• Define and align requirements from IT, Accounting, HR and other stakeholders

3. Evaluate vendors• Weigh requirements against vendor features and capabilities• Product demos and user reviews on g2crowd.com, capterra.com

4. Build your case• Hard and soft dollar benefits• Estimated time to recoup costs (ROI)

5. Implement your solution• Make sure your vendor owns IT and integration requirements

5 Steps to Improving Expense Management

http://www.g2crowd.com/

http://www.capterra.com/

Thank You

Unlocking the Strategic Value of T&E Expense Management

Business

Transcript of Unlocking the Strategic Value of T&E Expense Management