Winning CFO Approval for Expense Management Automation

Winning CFO Approval for
Expense Management
Automation
Ernie Humphrey, CTP
November 28, 2018 Sponsored by:

#InsideTalk
Copyright © 2018 IMA® (Institute of Management Accountants). All rights reserved.
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Webinar Features and CPE Credit
Asking Questions
Help
CPE Credit Requirements

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Join the Conversation
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@IMA_News

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Moderator
Margaret Michaels
Manager of Brand Content and Storytelling
IMA

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Featured Presenter
Ernie Humphrey, CTP
Chief Executive Officer
360 Thought Leadership

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Upon completing this webinar, you will be able to:
1. Identify opportunities to reduce costs.
2. Explain how to increase productivity.
3. Discover how to improve visibility into spending.
4. Recognize ways to mitigate risk and boost compliance.
5. Support strategic decision-making.
Learning Objectives

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• Integrated, automated solutions for travel, expense,
and accounts payable invoice
• 64 languages, 140+ currencies, clients in 80 countries
• #1 G2 Crowd for user satisfaction in expense
management software (2014-2018) and Momentum
Grid leader in expense management software (2018)
• PC Magazine Editors’ Choice for best expense
tracking software (2015-2018)
• Processing expenses and receipts valued at $10
billion annually
About Certify

Why Are Organizations Not
Automating T&E Management?

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a) Pen and paper
b) Microsoft Excel/ spreadsheets
c) Homegrown solution
d) Web-based solution
e) ERP/ accounting package (Oracle, SAP, etc.)
Polling Question 1
What methods do you use for managing T&E in
your organization? (select all that apply)

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Polling Question 1 Results (Placeholder)

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Certify Annual Trends Study 2018
500+ accounting professionals from
outside the Certify customer base:
39%
44%
17%
Director-level or above with
expense reporting
responsibility
(CEO, CFO, etc.)
Manager, controller
or accountant
Other (accounting staff,
consultant, administrative,
etc.)
2018 Expense Management Trends Report, Certify, Inc.

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Methods for Managing T&E Reporting
10%
33%
6%
34%
17%

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Finance Remains a Manual Affair at Many Businesses
49%
of businesses process expense reports using
some form of a manual system

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T&E Systems by Company Size
SMALL
BUSINESS
MID-SIZE
BUSINESS ENTERPRISE
36%
35%
13%
4%
11%
39%
18%
3%
8%
32%
28%
42%
13%
5%
12%
Web-based solution (Concur, IBM, etc.)
Microsoft Excel/spreadsheets
Pen and paper
Homegrown solution
ERP/accounting package (Oracle, SAP, etc.)

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T&E Systems by Company Size
SMALL
BUSINESS
MID-SIZE
BUSINESS ENTERPRISE
36%
35%
13%
4%
11%
39%
18%
3%
8%
32%
28%
42%
13%
5%
12%
Web-based solution (Concur, IBM, etc.)
Microsoft Excel/spreadsheets
Pen and paper
Homegrown solution
ERP/accounting package (Oracle, SAP, etc.)
MANUAL SYSTEMS:
29% enterprise | 60% small businesses

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Unclear policies coupled with:
• Paper receipts
• Paper expense reports
• Manual routing for approvals, audits,
and payment
Unclear policies cause:
• High cost, inefficient process
• Inflated travel chargers
• Noncompliance to laws and regulations
• Sets the opportunity for fraud
The Manual T&E Process is Antiquated

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While Automation Yields Positive ROI
33%
of businesses that
have automated
expense report
processing achieved
ROI in 12 months
or less
Features/Sources of Expense Report ROI
(% reporting)
%
Improved efficiency/expense reporting process 58%
Reduction in processing costs (less paper,
postage, storage, etc.)
53%
Mobile accessibility 30%
Increased employee productivity 27%
Travel booking control (pre-trip, authorization,
etc.)
23%
Reduction in overhead/staffing requirements 23%
Reduction in fraudulent expenses 22%
Elimination of payment for duplicate expenses 22%
More accurate mileage tracking/mapping 17%
Other 17%

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Why are more companies not automating?
• Lack of budget
• Lack of resources to research and implement a new system
• Larger businesses which are locked-in to existing systems
or workflows
One of the most common reasons:
Finance leaders do not know how to build a case for automation
that matches the CFO’s most pressing priorities.
What is the Disconnect?

Understanding the Role of the
Chief Financial Officer Today

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The Key Priorities of the CFO
Growth has become a strategic priority:
71%
of CFOs say their organization considers growth to be a strategic priority*
95%
of CFOs foresee “positive” business growth in 2018**
85%
of CFOs are optimistic about prospects for U.S. economic growth—up from 64% at the
beginning of 2017**
*Accenture, **PricewaterhouseCoopers

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CFOs need strategies that help them achieve
growth while also:
• Managing financial complexity
• Keeping costs in check
But That Growth Must be Balanced

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1. Reduce costs
2. Increase productivity
3. Improve visibility into spending
4. Mitigate risk and boost compliance
5. Empower strategic decision-making
This is why they need to automate.
CFOs Need Tools To:

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Top T&E Pressures to Improve in 2018
#1 Need to reduce expense processing costs
#2 Poor visibility into travel/expense data
#3 Lack of control over T&E spending
#4 Frequent non-compliant travel/expenses
#5 Inconsistent and lengthy reimbursement cycles

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a) Under $7
b) $10 - $20
c) $25 or more
d) I don’t know
Polling Question 2
How much does it cost in your organization to
process one expense report?

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Uncover Opportunities to Reduce Costs
$6.85
fully automated
$17.31
semi-automated
$26.63
manual process
PayStream Advisors 2017
Industry average cost to process ONE expense report:

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Self-Reported Processing Costs
31%
16%
9%
Under $7 per report $10−$20 per report
$25 or more per report We do not track these costs
44%
do not track expense
report processing costs

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How Automation Reduces Costs
• Streamlining of processes—such as business travelers
capturing receipts on their mobile devices
• Eliminate costs of printing, delivering, physically storing
documents
• Configurable workflows facilitate digital routing of
expenses for approval
Top-performing finance organizations run at
36% lower cost than their peers*
*PricewaterhouseCoopers

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How Much Time is Lost to Manual Tasks?
minutes to
complete
one expense
report
up to 23
minutes to correct
expense reports
errors
15-22
average number
of reports with
errors
22%
Expense Reporting Around the World:
Practices, Pain Points, and Productivity, GBTA, 2015

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Enhance Productivity and Efficiency
Automating expense
processing increases
employee productivity
by 29%
55% of best-in-class
companies have automated
expense management,
compared to 45% of all
other companies
Aberdeen Group

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Calculating Costs and Lost Opportunity
Time spent
per reportX
Hourly wage
or salary
Individual Employee:
Sales Representative:
= Overhead cost
per report
Total available
selling time÷
Time spent per
report = Lost selling
opportunity (%)

3. Improve Visibility
Into Spending

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Business Investment in T&E
6-12%
Total annual budget
for T&E expenses
(Aberdeen Group 2014)
Company Revenue Annual Spend
Under $100MM $700,000
$100MM to $500MM $1,500,000
$501MM to $2B $7,400,000
$2B and above $58,000,000
PayStream Advisors 2016

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How Companies Set T&E Spending
We do not have expense
category spending limits
Budget based on
company historical
spending
Follow U.S. GSA per diem
rate guidelines
Determined by annual
budgeting process
Other
30%
7% 13%
21%
29%

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Visibility is a Key Pain Point for CFOs
20%
of companies point to a lack of transparency/visibility into data
as one of their biggest expense management pain points

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• Cash managers gain access to real-time data
• By integrating a web-based system with an ERP or
general ledger system, CFOs gain 360-degree visibility
into spending
• Workflows become automated, driving efficiency
organization-wide
• By integrating a web-based system with a credit card
feed, cash managers gain increased control over
spending and can enjoy quicker reconciliation
The Benefits of Integrating a Web-Based System

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a) Credit card feed
b) ERP
c) CRM
d) A/P
e) General ledger
f) Workforce management
g) Meeting management
Polling Question 3
What types of data integrations would you want to
implement with a web-based expense
management system? (select all that apply)

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Data Integrations
18%
12%
70%
Meeting management
(event platform)
55%
20%
25%
A/P
52%
20%
28%
Credit card feed
(corporate or personal)
33%
17%
50%
ERP (Oracle, SAP, etc.)
18%
14%
68%
CRM
(Salesforce, SugarCRM, etc.)
60%
21%
19%
General ledger
26%
15%59%
Workforce management
Currently
Implemented
Will
Implement
No Plan to
Implement
2018 Expense Management
Trends Report, Certify, Inc.

4. Mitigate Risk and
Boost Compliance

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The most common types of expense reimbursement
fraud include:
• Mischaracterized expenses (disguising personal expenses)
• Overstatement of actual expense (altering receipts)
• Fictitious expenses (usually counterfeit receipts)
• Multiple reimbursements (submitting duplicate reports)
Approximately 15 percent of all fraudulent disbursements involve
expense reimbursement fraud
T&E Fraud
Association of Certified Fraud Examiners

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Top Expense Management Pain Points
Leading frustrations for T&E program
administrators:
2016 2017 2018
Employees losing paper receipts/submitting without receipts 50% 52% 50%
Employees failure to submit reports on time 45% 51% 50%
Time it takes to reconcile, review and approve reports 38% 36% 31%
Reviewing for policy violations 30% 28% 28%
Errors on expense reports (incorrect codes, amounts, etc.) 28% 26% 30%
2016-2018 Expense Management Trends Report, Certify, Inc.

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• Automation helps businesses meet complex
regulations, such as Sarbanes-Oxley, The Physician
Payments Sunshine Act, and IRS guidelines
• By conducting regular audits of expense reports,
businesses can locate areas of non-compliance, flag
expenses for potential fraud, reduce bad behavior, and
ensure that expenses meet tax rules
• Automated expense reporting solutions provide
instant access to expense data and built-in compliance
controls
Compliance is a Key Priority for CFOs Today

5. Empower Strategic
Decision-Making

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Today’s CFO is a strategist who helps to guide
key business initiatives.
Data is critical to this new reality and automated expense
management solutions offers the visibility a CFO needs to:
• Manage budgeting, planning, and forecasting
• Measure spending against budgets and identify budget overflows
• Align expense management strategies with key business objectives
The CFO’s Role Has Changed

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This data can be analyzed by finance teams, helping them to:
• Study spending tendencies organization-wide—by department,
employee, expense type, and more
• Identify opportunities for consolidation and negotiation with
suppliers
• Reduce delinquencies and late fees
Top performing finance organizations spend 20% more time than
their peers on data analysis versus data gathering
Data Analysis Vs. Data Gathering
*PricewaterhouseCoopers

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a) We mainly focus on data gathering
b) An equal mix
c) We mainly focus on data analysis
Polling Question 4
What percentage of your finance’s teams time is
spent in data analysis versus data gathering?

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Building a Business Case for
Expense Management
Automation

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When building a business case for automation, keep the
strategic priorities of the CFO front and center. Show how
automation will help the CFO to directly accomplish his or
her objectives to:
1. Reduce costs
2. Increase productivity
3. Improve spending visibility
4. Mitigate risk and boost compliance
5. Empower strategic decision-making
Keep the CFO’s Needs in Mind

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Questions & Answers
Use the Q & A Panel to send your questions to our panelists.
Ernie Humphrey, CTP
Margaret Michaels
Manager of Brand Content
and Storytelling
IMA

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Thank You to Our Featured Presenter!
Ernie Humphrey, CTP

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• 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

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Thank You to Our Sponsor!
www.certify.com

About IMA® and the CMA® Program
IMA® (Institute of Management Accountants) is one of the largest and most
respected associations focused exclusively on advancing the management
accounting profession. Globally, IMA supports the profession through the
CMA® (Certified Management Accountant) program, continuing education,
research, networking, and advocacy of the highest ethical business practices.
The CMA is a globally recognized certification program for management
accounting and finance professionals. The two-part CMA exam covers 11
critical business areas, including financial planning, analysis, control, and
decision support.
Learn more at http://www.imanet.org/cma-certification.

Winning CFO Approval for Expense Management Automation

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