Expense Management: Best Practices and Benchmarking for 2015 February 18, 2015 Sponsored by: Bob Neveu Jamie Shada
Expense Management: Best Practices and Benchmarking for 2015
February 18, 2015 Sponsored by:!
Bob Neveu Jamie Shada
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Moderator!
Steve Shannon Director
Partnership Marketing
IMA !
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Featured Presenter!
Bob Neveu President and Co-founder
Certify, Inc.
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Certify
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• Leading travel & expense management provider since 2008
• Over 15 million expense transactions in 2014
• Processing over $8 billion/year in expense reports
• 64 languages, 140+ currencies, clients in 18 countries
• #1 Highest Rated Expense Management Software on G2 Crowd, a 4.8 out of 5 star rating
• 9 Must-Have Apps for Business Travelers – Inc.com, 5 top business travel apps – Employee Benefits Adviser
Featured in:
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Featured Presenter!
Jamie Shada Accounting Operations Analyst
Garmin !
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Garmin
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Learning Objectives
Upon completing this webinar, you will be able to:!!1. Understand current and emerging technologies
surrounding T&E management 2. Explain how companies are utilizing expense report
software to drive policy compliance rates up and simplify processes for employees and managers
3. Apply the best practices of T&E automation with Certify’s platform
4. Recognize the travel and expense management trends and benchmarks for 2015
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The Importance of T&E
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Travel and entertainment (T&E)—second only to payroll as the largest business expense, accounts for 10%-12% of total annual budget
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Annual Spend on Travel & Entertainment
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The majority of mid-size companies spend between $50k and $5mm on
T&E
$50k – $5mm
Mid-Size Company 101 – 999 employees
The majority of large organizations spend over $5mm on T&E
> $5,000,000
Large Enterprise More than 1,000 employees
The majority of small businesses spend less than $50k on T&E
< $50,000
Small Business Less than 100 employees
What companies of all sizes are spending on T&E:
Reference: Certify’s Travel and Expense Trends Data, February 2014
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About the Data
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• 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 Survey Conducted in December 2014
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Polling Question 1
a) Pen and paper/spreadsheets b) ERP system (Oracle, SAP, etc.) c) Online expense system (Certify, Concur, etc.)
How does your organization currently manage travel and expense reporting?
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Polling Question 1 Results (Placeholder)
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T&E Expense Management Trends
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Benchmarking for 2015: How does your organization stack up to the
2015 Trend Survey data?
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T&E Expense Management Trends
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How do organizations currently manage their travel and expense reporting?
Reference: Certify’s Annual Travel & Expense Management Survey 2015
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T&E Expense Management Trends
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The Divide Between Small, Medium & Large Businesses
Manual - 64%
ERP - 11%
Web-Based - 25%
Manual - 19%
ERP - 33%
Web-Based - 48%
Manual - 48%
ERP - 19%
Web-Based - 34%
Small Business Medium Business Large Business
Reference: Certify’s Annual Travel & Expense Management Survey 2015
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Top Pain Points
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0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
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
Largest Pain Points Surrounding T&E
Reference: Certify’s Annual Travel & Expense Management Survey 2015
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Top Pressures & Areas for Improvements
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Areas to Improve for 2015
Lengthy expense reimbursements (16%)
Frequent instances of noncompliance (16%)
Need to reduce expense costs 46%
Poor visibility into spend
27%
Lack of control over T&E spend
25%
Reference: Certify’s Annual Travel & Expense Management Survey 2015
Top T&E Pressures in 2014
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Expense Management Features
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1. Automation, 51% of companies named it as top feature For example, automated expense reports, direct credit card feeds, and automated approval workflows.
2. Policy Enforcement, by 42% of companies Employees receive immediate out-of-policy notifications, and companies can set expense limits by category.
3. Integrations with Finance Systems, by 34% of companies Manage large-scale user data through integrations with HRMS interfaces, multiple ERP systems, and accounting software.
4. Mobile Technology, by 33% of companies Mobile apps allow users to report and manage expenses remotely, whether using a smartphone to capture receipt images or for on-the-go travel booking.
Must-have features requested by the finance department:
Reference: Certify’s Annual Travel & Expense Management Survey 2015
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Polling Question 2
a) Our T&E policy is not enforced b) Manually reviewing expenses c) T&E system automatically flags out-of-policy
violations
How is your organization enforcing T&E expense polices?
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Polling Question 2 Results (Placeholder)
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Policy Enforcement
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14%
35% 36%
21%
1% 4%
31% 27%
19%
63%
0%
10%
20%
30%
40%
50%
60%
70%
T&E policy is not enforced
It is the responsibility of the employee
Manager manually review each expense
Accountant manually reviews, checking only high value expenses
T&E system automatically flags out-
of-policy violations
How Companies Enforce T&E Policies
Manual Process Web-Based System
Reference: Certify’s Annual Travel & Expense Management Survey 2015
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T&E Policies
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Corporate Travel
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Online Travel Sites
Travel Agency
Online Booking Tool
How companies are booking travel:
Reference: Certify’s Annual Travel & Expense Management Survey 2015
Manual Process Automation
Open Booking
(through direct
provider)
Online Travel Sites/Agencies
(i.e. Expedia, Orbitz, Kayak)
Online Booking
Tool (OBT) (i.e. Get There,
Amadeus)
Travel Agency
(Carlson / BCD)
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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Fraud in Expenses
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• 59% of companies indicated 20% of expenses submitted are in violation of T&E policy. • 6.3% of all transactions are “out of compliance,” according to a report by Oversight
Systems. Of these noncompliant transactions, 19% of expenses submitted are “fraudulent” with average amount of $115, amounting to $13.7 million in losses.
• Organizations who monitor compliance have a 70% decrease in fraudulent spending.
Reference: www.businesstravelnews.com/Expense-Management/Study--Fraudulent-Expense-Reports-Have-Cost-Cos--Millions-In-2014
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The Craziest Business Expenses on 2014
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$125 Cher Concert Tickets “Because I was in Vegas and had a free evening.” Expensed by an employee at a small insurance company
2nd Monitor “Because I have two eyes.” Expensed by an employee at a mid-sized company
Beers at $100 each “Liquid to maintain life in the tropics.” Expensed by an employee at a mid-sized company
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Spend Trends in 2014
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Reference: Certify’s SpendSmart Report, Q4, 2014
1. Meals 2. Airfare 3. Lodging 4. Gas 5. Misc. 6. Cell Phone 7. Car Rental 8. Groceries 9. Supplies 10. Taxi 11. Tolls 12. Shipping 13. Parking
How the T&E budget was spent by business professionals:
21%
16% 14%
12% 8% 6% 5% 5% 5% 5% 2% 2% 1%
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Benchmarking Data: Expense Categories
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Reference: Certify’s SpendSmart Report, 2013-2014
The average expense amounts, based transaction data from the 2014 Certify SpendSmart Report:
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%
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Benchmarking Data: Meal Expenses
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Reference: Certify’s Annual Travel & Expense Management Survey 2015 | http://www.gsa.gov/portal/content/101518
A breakdown of meal expense amounts, based on Certify transactions and the GSA’s per diem meal rates:
Meal Breakdown Average Expense Amounts for 2014 – Certify Data
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
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Benchmarking Data: Popular Vendors
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A breakdown of most expensed vendors of 2014:
Vendor Average Expense Cost
Most Expensed Restaurant Starbucks $10.45
Most Expensed Airline Delta $412.53
Most Expensed Hotel Marriott $240.07
Most Expensed Car Rental National Car Rental $179.71
Reference: Certify’s SpendSmart Report, 2013-2014
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Polling Question 3
a) Follow GSA per diems b) Based on internal spend habits c) We do not have spend limitations on those items
How does your company set travel policy spend amounts on items such as meals, hotel, airfare?
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Polling Question 3 Results (Placeholder)
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Switching from Spreadsheets
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53% of companies on a manual process—who indicated they will switch to a web-based expense system—estimate they will switch
within the next 24 months.
21% 32% 26% 9% 9%
Within the next 6 months
6 – 12 months 12 – 24 months
24 – 36 months Not sure
The timeframe anticipated to switch to a cloud-based expense system:
Reference: Certify’s Annual Travel & Expense Management Survey 2015
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Reason for Switching
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Improve employee compliance rates to corporate travel policies
Provide an expense system accessible from anywhere
Gain reporting and analytics around T&E spend
Simplifying the expense reporting process
What are the forces driving the switch to a web-based system?
Reference: Certify’s Annual Travel & Expense Management Survey 2015
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ROI on Expense Management Software
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Time to recoup costs after switching to a web-based expense management system:
Small Businesses Experience Fastest ROI
of small businesses experience 100% ROI in one year or less
70%
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T&E Expense Management Trends
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Best Practices: What are the best practices in T&E for 2015?
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Key Strategic Actions to Improve Processes
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2. Take measures to improve and enforce corporate T&E policies
• Ranked #2 by 48% of companies
3. Arm travelers with better technologies to make T&E expense management simpler and faster • Mobile applications • Globally accessible tools
4. Leverage analytics to improve intelligence and data Reference: Aberdeen Group 2014, The Traveler & Expense Management Guide for 2014
1. Automate key components of T&E expense management • Ranked the #1 top priority in 2014 by 52% of companies in the
2014 Aberdeen Report
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Automate Key Components of T&E
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Reference: Aberdeen Group 2014, The Traveler & Expense Management Guide for 2014
Companies who utilize automated expense management systems experience:
1. A 50% lower expense-processing cost than other companies 2. A 43% higher rate of business travel spend under management 3. A 31% higher rate of corporate policy compliance
Automating the expense management process is the first step to a “Best in Class” expense management program, according to 55% of companies in the Aberdeen Expense Management Benchmark report.
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Polling Question 4
a) The expense report creation process b) The auditing and reporting process c) The manual process of keying in data into
Accounts Payable systems
What key area of your travel and expense management process would you most like to automate?
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Polling Question 4 Results (Placeholder)
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Improve & Enforce Corporate Policy
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Organizations using cloud-expense are experiencing up to 91% compliance rates to corporate travel policies and guidelines
“Setting hard travel policies around formerly ‘gray areas’ such as seat upgrades has trimmed travel spending by 10% to 20%”
Linda Parcher, VP and CPO, Diebold, Inc. Wall Street Journal
#1 way to reduce T&E costs: Improve compliance to T&E polices
Reference: Certify Annual Travel & Expense Management Survey 2014
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Utilizing Technology to Gain Control
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How to increase policy compliance: 1. Create corporate travel and
entertainment expense policy 2. Integrate policy into expense system,
setting both: • Hard Policies (decline expense
exceeding X amount) • Soft Policies (manager’s discretion for
approval) 3. Allow technology to enforce policy,
notifying employee and manager of policy violations • Missing receipts • Duplicated • Items exceeding spend limits
Reference: Certify Annual Travel & Expense Management Survey 2014
Flagged violation, notifying manager amount exceeded policy limit
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Arm Travelers with Technology
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• Online travel booking system • Used by 87% of all Best-in-Class companies • Control the expense before it occurs • Spend captured quicker and in compliance to policies
• Mobility: Second most important feature when selecting an expense vendor; 45% of companies named it #1
• Users of mobile expense applications have reduced their expense-processing costs by 65%
• Enable travelers with the power of mobile: receipt capture, enter expense data, review & approve expense
• End-to-end expense management system: • Robust platform helps streamline and automate processes • Accessible from anywhere, anytime
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Leveraging Technology for Visibility
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Reference: Certify’s Annual Travel & Expense Management Survey 2015
• 55% of all organizations name main priority for 2014 to enhance visibility into overall T&E spending
• Visibility into T&E spend: 30% visibility with manual process; 61%+ visibility with web-based system
• 74% companies using cloud expense systems regularly audit expense reports vs. 44% of companies on manual system Types of visibility gained with cloud technology • Documented path of approvals • Expense by employee • Expense spend by category
61% 57%
74%
57%
30%
40% 44%
29%
Visibility into T&E Spend
Regular Reporting
Regular Audits of Expenses
Automated Data
Analytics
Web-Based Expense System
Manual Expense Process
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Questions & Answers!
Use the Q & A Panel to send your questions to our panelists.
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Use the Q & A Panel to send your questions to our panelists.
Bob Neveu President and Co-founder
Certify, Inc.
Steve Shannon Director
Partnership Marketing IMA
Jamie Shada Accounting
Operations Analyst Garmin
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Thank You to Our Presenters!!
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Bob Neveu President and Co-founder
Certify, Inc.
Jamie Shada Accounting Operations Analyst
Garmin
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Final Reminders
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