Expense Management: Best Practices and Benchmarking for 2015

Expense Management:
Best Practices and
Benchmarking for 2015
February 18, 2015
Sponsored by:!
Bob Neveu
Jamie Shada

© 2015 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved.
#InsideTalk!
Webinar Features
Should you experience any technical difﬁculty, please click the “Help”
icon at the bottom of the console for audience support.!
Audio Broadcast:
►  You should hear sound through your
computer speakers or headphones
►  To listen to the audio by telephone,
click the “Request” icon on the
bottom Panel for teleconference
Asking Questions:
►  Questions may be submitted using
the Q&A icon on the left side of
the console
►  Questions will be addressed after
the formal presentation
Pop-up Blockers: !
►  Please temporarily disable your
internet pop-up blockers
Volume Slider
2

#InsideTalk!
Webinar Features
3
#InsideTalk
Join the conversation!

#InsideTalk!
•  Download a PDF of the slides
– Download Slides icon
– Link in post-event email
– IMA Webinar Library
•  IMA Members can also view this webinar again
www.imanet.org/programs_events/IMAWebinars.aspx
Visit IMA’s website:
Webinar Materials and Access to Recording
4

#InsideTalk!
•  CMAs, CFMs & CPAs can report 1 hour of CMA and
NASBA approved CPE for today’s event.
•  Click the “CPE” icon at the bottom of your console to
access your Certificate of Completion. Please print
or save for your records.
•  Your CPE credit will be automatically recorded in
your transcript.
CPE Credit Requirements
5

#InsideTalk!
Moderator!
Steve Shannon
Director
Partnership Marketing
IMA
!
6

#InsideTalk!
Featured Presenter!
Bob Neveu
President and Co-founder
Certify, Inc.
7

#InsideTalk!
Certify
8
•  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:

#InsideTalk!
Featured Presenter!
Jamie Shada
Accounting Operations Analyst
Garmin
!
9

#InsideTalk!
10
Garmin

#InsideTalk!
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
11

#InsideTalk!
The Importance of T&E
12
Travel and entertainment (T&E)—second only to payroll as the largest
business expense, accounts for 10%-12% of total annual budget

#InsideTalk!
Annual Spend on Travel & Entertainment
13
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

#InsideTalk!
About the Data
14
•  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

#InsideTalk!
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?
15

#InsideTalk!
Polling Question 1 Results (Placeholder)
16

#InsideTalk!
T&E Expense Management Trends
17
Benchmarking for 2015:
How does your organization stack up to the
2015 Trend Survey data?

#InsideTalk!
18
How do organizations currently manage their travel and expense
reporting?
Reference: Certify’s Annual Travel & Expense Management Survey 2015

#InsideTalk!
19
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

#InsideTalk!
Top Pain Points
20
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

#InsideTalk!
Top Pressures & Areas for Improvements
21
Areas to Improve for 2015
Lengthy expense
reimbursements (16%)
Frequent instances of
noncompliance (16%)
Need to reduce
expense costs46%
Poor visibility
into spend
27%
Lack of control
over T&E spend
25%
Top T&E Pressures in 2014

#InsideTalk!
Expense Management Features
22
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:

#InsideTalk!
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?
23

#InsideTalk!
24

#InsideTalk!
Policy Enforcement
25
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

#InsideTalk!
T&E Policies
26

#InsideTalk!
Corporate Travel
27
Online
Travel
Sites

Travel
Agency

Online
Booking
Tool

How companies
are booking travel:
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

#InsideTalk!
Fraud in Expenses
28
•  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

#InsideTalk!
The Craziest Business Expenses on 2014
29
$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

#InsideTalk!
Spend Trends in 2014
30
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%

#InsideTalk!
Benchmarking Data: Expense Categories
31
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%

#InsideTalk!
Benchmarking Data: Meal Expenses
32
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

#InsideTalk!
Benchmarking Data: Popular Vendors
33
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

#InsideTalk!
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?
34

#InsideTalk!
35

#InsideTalk!
Switching from Spreadsheets
36
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:

#InsideTalk!
Reason for Switching
37
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?

#InsideTalk!
ROI on Expense Management Software
38
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%

#InsideTalk!
39
Best Practices:
What are the best practices in T&E for 2015?

#InsideTalk!
Key Strategic Actions to Improve Processes
40
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

#InsideTalk!
Automate Key Components of T&E
41
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.

#InsideTalk!
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?
42

#InsideTalk!
43

#InsideTalk!
Improve & Enforce Corporate Policy
44
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

#InsideTalk!
Utilizing Technology to Gain Control
45
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

#InsideTalk!
Arm Travelers with Technology
46
•  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

#InsideTalk!
Leveraging Technology for Visibility
47
•  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

#InsideTalk!
Questions & Answers!
Use the Q & A Panel to send your questions to our panelists.
48
Use the Q & A Panel to send your questions to our panelists.
Bob Neveu
Certify, Inc.
Steve Shannon
Director
Partnership Marketing
IMA
Jamie Shada
Accounting
Operations Analyst
Garmin

#InsideTalk!
Thank You to Our Presenters!!
49
Bob Neveu
Certify, Inc.
Jamie Shada
Accounting Operations Analyst
Garmin

#InsideTalk!
►  Complete the Evaluation poll – on your screen
►  Access to your CPE Certificate – 2 Options
•  Click the “CPE” icon at the bottom of your console
or
•  Click the link in your post-event email
►  Please print a copy of the CPE certificate for your
records.
►  Your CPE credit will be automatically recorded in your
transcript.
Final Reminders
50

#InsideTalk!
Next Webinar:
•  Strategic Performance Management for a Future
Ready Enterprise
Ø Wednesday, February 25, 2015, 1 p.m. EST
For Upcoming Inside Talk Events:
•  Visit IMA’s website at
•  Log-in with your User Name & Password
•  Remember to check IMA’s Learning Spotlight for
upcoming webinar events
Notiﬁcation of Future Webinar Schedules!
51

#InsideTalk!

Thank You to Our Sponsor!
www.certify.com

Expense Management: Best Practices and Benchmarking for 2015

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Expense Management: Best Practices and Benchmarking for 2015

Similar to Expense Management: Best Practices and Benchmarking for 2015 (20)

More from Ashley Emery

More from Ashley Emery (16)

Recently uploaded

Recently uploaded (20)

Expense Management: Best Practices and Benchmarking for 2015