Travel & Expense Management 2015: Strategies to control T&E spending and improve compliance with...

Travel & Expense Management 2015:Strategies to control T&E spending and improve compliance with corporate policy

Robert Neveu

August 12, 2015

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Moderator

Steve ShannonDirector

Partnership Marketing

IMA

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Learning Objectives

Upon completing this webinar, you will be able to:

1. Explain the key T&E management trends that support the need for greater spending controls.

2. Identify strategies and tools to streamline processes, reduce fraud, and minimize employee errors.

3. Recognize how automation can simplify T&E management and improve policy compliance.

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Featured Presenter

Robert NeveuPresident and Co-founder

Certify

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• Industry-leading with first fully automated expense system

• #2 expense report software providing travel and expense solutions since 2008

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

• #1 Highest Rated Expense Management Software on G2 Crowd, with a 4.8 out of 5 star rating

• Over 25 million expense transactions in 2014

• Processing over $10+ billion/year in expense reports

About Certify

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http://management.fortune.cnn.com/2013/12/19/the-most-over-the-top-expense-account-items-of-2013/?iid=HP_LN

http://www.economist.com/blogs/gulliver/2014/01/business-traveller-food

http://online.wsj.com/news/articles/SB10001424127887324463604579041133954185054?mg=reno64-wsj&url=http://online.wsj.com/article/SB10001424127887324463604579041133954185054.html

http://www.cnbc.com/id/101339055


About the Data

• Total Respondents: 434 companies (non-Certify clients)

• Audience: • 28% Small Business: less than 100 employees• 37% Mid-Sized Business: 101 – 999 employees• 35% Large Business: 1,000+ employees

• Location:• 6% International• 94% U.S.

• Demographics:• 38% C-level or above finance professionals• 43% Manager, Controller or Accountant• 19% Other (accounting staff, consultant, administrative, etc.)

Third Annual Expense Management Trends SurveyConducted in December 2014

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BENCHMARKS

Compare Your Organization’s T&E Spend


Why Control is Critical for T&E Management

• Travel and entertainment (T&E)—second only to payroll as the largest business expense, accounts for 10–12% of total annual budget

• North American companies will spend $186b on travel and entertainment in 2015, according to a report by J.P. Morgan

• Nearly 65% of all companies spend $100,000 or more each year on T&E (PayStream Advisors 2015 Travel & Expense Management Report)

www.travelpulse.com/news/business-travel/travel-leaders-business-travel-data-unveils-importance-of-corporate-rates.htmlPayStream Advisors 2015 Travel and Expense Management Report

Domestic International

$1,002 $2,502

$26.63Average cost to manually process an expense report

Average base cost per business trip for air, hotel and car rental

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Annual T&E Spend by Company Size

$50k – $5mm

Mid-Size Company101 – 999 employees

> $5,000,000

Large EnterpriseMore than 1,000 employees

< $50,000

Small BusinessLess than 100 employees

Reference: Certify’s Annual Travel & Expense Trends Data, February 2014

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MEALS

AIRFARE

LODGINGGAS

MISC.

CELL PHONE

CAR RENTAL

GROCERIES

SUPPLIES

TAXITOLLS

SHIPPING

PARKING

Spend Trends for 2014

Reference: Certify’s SpendSmart Report, Q4, 2014

1. Meals 21%

2. Airfare 16%

3. Lodging 14%

4. Gas 12%

5. Misc. 8%

6. Cell Phone 6%

7. Car Rental 5%

8. Groceries 5%

9. Supplies 5%

10. Taxi 5%

11. Tolls 2%

12. Shipping 2%

13. Parking 1%

How the T&E budget was spent by business professionals:

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Benchmark Data by Expense Category

Average amounts for common expense categories:

Category 2013 2014 Difference

Meals $26.08 $25.67 – 1.58%

Airfare $329.65 $345.21 + 4.61%

Lodging $200.24 $213.90 + 6.6%

Car Rental $185.27 $193.58 + 4.39%

Taxi $32.76 $31.81 – 2.94%

Gas $50.73 $40.41 – 22.65%

Parking $32.75 $32.70 – 0.15%

Cell Phone $98.88 $89.30 – 10.18%

Reference: Certify’s SpendSmart Report, 2013-2014

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Benchmark Data for Meal Expenses

Average meal expense amounts compared to GSAs per diem meal rates:

Meal BreakdownAverage Expense Amounts for 2014

GSA Per Diem Highest Tier (Major Metros)

Breakfast $11.88 $12

Lunch $21.46 $18

Dinner $28.24 $36

Total Per Day $61.58 $71*

*includes $5 for incidental expenses

Reference: Certify’s Annual Travel & Expense Management Survey 2015 | http://www.gsa.gov/portal/content/101518

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Polling Question 1

a) Paper-based/spreadsheets

b) 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 spend?


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Polling Question 1 Results (Placeholder)


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Solutions to Control Spending


Methods for Managing T&E Reporting

Reference: Certify’s Annual Travel & Expense Management Survey 2015

Manual processes are used by the majority of companies, however Excel or electronic spreadsheets, pen/paper and homegrown systems provide little control.

37%WEB-BASED

43%MANUAL

19%

ERP

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T&E Expense Management Trends

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T&E Adoption Rates

Manual - 64%ERP - 11%Web-Based - 25%



Small Business Medium Business Large Business



Leverage Technology to GainVisibility and Control

You can’t control what you can’t see:

• 55% of all organizations’ main priority for 2014 was to enhance visibility into overall T&E spend

• Manual processes provide only 30% visibility vs. 61%+ visibility with web-based expense systems

• 74% companies using cloud/web-based systems regularly audit expense reports vs. 44% of companies on manual system Visi

bility

into

T&E S

pend

Regula

r Rep

ortin

g

Regula

r Aud

its o

f Exp

ense

s

Autom

ated

Dat

a Ana

lytics

61%57%

74%

57%

30%

40%44%

29%

Web-Based Expense SystemManual Expense Process


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Leverage Technology to GainVisibility and Control

• Documented path of approvals—Has each expense report been reviewed and approved by the right person at the appropriate time?

• Expense reports by employee—Which individual employees (or departments) are expensing the most? Are they managing the budget responsibly?

• Expense spend by category—Which areas are costing the company the most? Can we add controls, negotiate preferred rates, etc.?

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Listen to Your Finance Department

Automation—including expense report creation/scheduling, direct credit card feeds and approval workflows

Must-have control features requested by finance:

Policy Enforcement—integrated policy with automatic employee notification of violations and set expense limits by category

IT Integration with Legacy Systems—manage large-scale user data and reporting through integrations with HRIS, multiple ERP systems and accounting software

Mobile Technology—manage expenses and approvals remotely with smartphone access including receipt capture images and on-the-go travel booking

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T&E Control = Real Savings

Mileage reimbursement before and after using an automated system with Google Maps

Oct. '13 - Mar '14 Oct. '14 - Mar. '15

$362,000SAVED

Certify enterprise client:

• 12,000+ retail locations

• 100,000 employees

• 58,000 users creating and submitting expense reports annually

in mileage

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Polling Question 2

a) We have no formal T&E policy

b) Manual review process

c) Automated system that flags violations

d) Policy is not enforced

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

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Solutions to Improve Compliance


Policy Enforcement Trends

T&E poli

cy is

not

enf

orce

d

It is

the

resp

onsib

ility

of th

e em

ploye

e

Man

ager

man

ually

revie

w eac

h ex

pens

e

Accou

ntan

t man

ually

revie

ws, c

heck

ing o

nly h

igh v

alue

expe

nses

T&E sys

tem

aut

omat

ically

flag

s ou

t-of-p

olicy

viol

ation

s0%

10%

20%

30%

40%

50%

60%

70%

14%

35% 36%

21%

1%4%

31%27%

19%

63%

How Companies Enforce T&E Policies

Manual Process Web-Based SystemReference: Certify’s Annual Travel & Expense Management Survey 2015

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Manual policy review is inefficient and creates opportunity for fraud

78%Of companies indicatethey have a T&E policy

65%Of those companies are manually

reviewing for policy violations

Policy Enforcement Trends


The Impact of Expense Report Fraud

• Expense fraud accounted for nearly 14% of all occupational fraud in 2014 with a median loss of more than $30,000

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

• Organizations that monitor compliance experience a 70% decrease in fraudulent spending

Association of Certified Fraud Examiners

Reference: www.businesstravelnews.com/Expense-Management/Study--Fraudulent-Expense-Reports-Have-Cost-Cos--Millions-In-2014

82%

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Automate Policy Compliance

1. Establish a corporate travel and entertainment expense policy • Clearly defined for all employees with ongoing training

2. Integrate your policy into the expense system, setting both:• Hard Policies (decline expense exceeding X amount)• Soft Policies (manager’s discretion for approval)

3. Allow technology to enforce policies, notifying employees and managers of violations, including:• Missing receipts• Duplicate expenses• Items exceeding spend limits

Flagged violation, notifying manager amount exceeded policy limit

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Integrate Corporate Travel

Online Travel Sites

Travel Agency

Online Booking Tool

How companies are booking travel:

Open Booking

(through direct provider)

Online Travel Sites/Agenci

es

(i.e. Expedia, Orbitz, Kayak)

Online Booking Tool

(OBT)

(i.e. Carlson, Get There)

Travel Agency

(through a travel agent)

PRO: Flexibility

CON: No control over policy enforcement

PRO: Flexibility

CON: No control over policy enforcement

PRO: Policy enforcement

CONS: Contracts and systems; minimum transactions. Best for organizations spending over $2mm on T&E.

PRO: Full-service policy enforcement

CONS: Cost; $40-50 fee in addition to booking fees. Best for organizations spending over $4mm on T&E.

Manual Process

Web-Based Process

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Adopt the Latest T&E Technology

1. Pre-trip approvals using an integrated online travel booking system can stop out-of-policy expenses before they occur (used by 87% of all best-in-class companies)

2. Mobile applications support policy compliance with timely, accurate data and reduce expense-processing costs by 65%; the #1 feature in selecting expense vendors by 45% of companies

3. An end-to-end expense management system allows administrators to automate controls across a single platform for all company employees, departments, etc.

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Polling Question 3

a) Employee creation and submission

b) Routing for approvals

c) Auditing and reporting

d) Manual data entry into the accounts payable system

Which areas of your T&E process do you feel can be more efficient?

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Solutions to Streamline Process


Top Pain Points in 2014

Reviewing for policy violations

Reconciling the data

Errors on the report

Employees losing receipts

Time it takes to reconcile, review, and approve

Employee's failure to submit reports on time

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Inefficiency tops the list:


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Top Areas to Improve in 2015


Process is an opportunity:

Expen

se M

anag

emen

t Pro

cess

Inte

grat

ion

Betwee

n Sys

tem

s

Trave

l Boo

king

Mob

ility

Softw

are

Deplo

ymen

t

36%

25%21%

14%

4%

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Make it Easy for Travelers and Employees

Give travelers mobile apps with the power to: • Automate receipt capture• Eliminate manual data entry • Streamline report creation and review • Approve reports anywhere, anytime (managers)

Adopt an integrated T&E system with travel booking to:• Take guesswork out of travel and policy restrictions• Expedite spend capture and expense reporting • Eliminate manual processes and redundant data entry• Provide a single, familiar platform for all users

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Embrace the Future of T&E Automation

• Credit Card Integrations—automated data feeds of corporate credit card transactions automates the reconciliation process

• Mobile Receipt Capture—employees take a photo of a receipt with their smartphone instantly turning it into an electronic receipt

• Online Expense Report Creation—create, submit and approve expense reports online; no more time-consuming spreadsheets

• Direct Feeds — automated feeds sync data with accounting and HR systems to simplify reporting and eliminate redundant manual data entry

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T&E Strategies and Tools Used by Best in Class Companies

Aberdeen Group: Travel and Expense Management: Spend and Save

88%

58%

87%77% 68%63%

34%

63%50%

35%

Best-in-Class Industry Average

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Benefits of T&E Automation

“What are the biggest benefits you have achieved by automating your T&E process?”

PayStream Advisors 2015 Travel and Expense Management Report

$6.85automation

Better ability to enforce travel policies

Improved visibility over spend

Quicker reimbursement of employee expenses

Improved ability to detect and prevent fraud

0% 10% 20% 30% 40% 50%

$26.63manual

$19.78saved per report

Average expense report processing costs

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Polling Question 4

a) Under $7 per report

b) $10−$20 per report

c) $25 or more per report

d) We do not track these costs

What is the average cost to process a single expense report at your organization?


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Please position this slide within the slide deck, to indicate when you plan to review the group poll results for question #4.

Upon arriving on this slide, the group poll results will automatically display for the audience, and you may then review the results and /or tie them into your presentation.



Questions & Answers

Use the Q & A Panel to send your questions to our panelists.

Robert NeveuPresident and Co-founder

Certify

Steve ShannonDirector

Partnership MarketingIMA

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Thank You to Our Presenter!

Robert Neveu

President and Co-founder

Certify

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Final Reminders


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