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2017 T&E Expense Trends and
Benchmark Spending
March 22, 2017
Learning Objectives
• Factors contributing to high expense report processing costs
• Top expense management pressures, pai...
Webinar notes
• Today’s event will be recorded and all attendees will be kept in listen-
only mode to eliminate excessive ...
360 Thought Leadership Consulting helps companies define
and unlock the strategic value of their thought leadership
progra...
• Industry-leading, first fully automated travel and expense
management system
• 64 languages, 140+ currencies, clients in...
Certify Annual Trends Study 2017
600+ accounting professionals from outside
the Certify customer base:
T&E Spending by U.S. Companies
1. Global Business Travel Association 2016
$293.1b
2017 travel and entertainment
spending b...
Business Investment in T&E
6-12%
total annual budget
for T&E expenses
(Aberdeen Group 2014)
PayStream Advisors 2016
Compan...
T&E spending ranks as the 2nd
most difficult operating expense
category to control
Forrester Research 2014
Polling Question 1
a) Meals
b) Mileage
c) Airfare
d) Not sure
As a percent of total spending, what was your
company’s larg...
Key Survey Results & Trends
1. Meals 19%
2. Airfare 15%
3. Lodging 14%
4. Misc. 13%
5. Gas 11%
6. Taxi 9%
7. Cell phone 5%
8. Car rental 5%
9. Supplie...
Meals
Airfare
Lodging
Misc.
Gas
Taxi
Cell
Phone
Car
Rental
Supplies
Shipping Tolls
Parking
1. Meals 19%
2. Airfare 15%
3. ...
Category 2016 2017 Difference
Gas $30.32 $29.77 –1.81%
Airfare $274.00 $316.17 +15.39%
Lodging $223.45 $210.19 –5.93%
Car ...
www.gsa.gov, accessed 1/30/17
2017 U.S. GSA Per Diem Rates
GSA Lodging, Meals & Incidentals for San Francisco, CA
Lodging ...
Certify Annual Travel & Expense Management Survey 2016
Budgeting & Category Spending Caps
We do not have expense
category ...
Inefficiencies in T&E
Expense Reporting
Expense Reporting Inefficiencies
Expense Reporting Around the World: Practices, Pain Points, and Productivity, GBTA, 2015
...
Print spreadsheets,
tape or staple receipts
and make copies
Enter expenses in Excel with
category, vendor, dates, etc.
And...
Check expenses for
receipts, review for out-
of-policy items, etc.
Receive reports for all
employees at different times
du...
Manually enter data
from accounting
software to payroll for
reimbursementManually enter
expense data into
accounting softw...
Leading frustrations for T&E program administrators:
Top Expense Management Pain Points
2015 2016 2017
Employees losing pa...
Top T&E Pressures to Improve in 2017
36% Need to reduce expense processing costs
31% Lack of control over T&E spending
31%...
Polling Question 2
a) Reducing process and workflow inefficiencies
b) Tighter controls for employee T&E spending
c) Loweri...
Cost to Process a Single Expense Report
$6.85
fully automated
$17.31
semi-automated
$26.63
manual process
PayStream Adviso...
T&E Policy Compliance
79%of all companies report
having a written
T&E policy in place
75%manually review each
expense repo...
An estimated 20% of a total T&E
spend is considered out of policy
for the average company
Aberdeen Group 2012
7%
39%
41%
15%
26%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
T&E policy is not
enforced
Employee is responsible Manager manual...
44
37
35
37
29
32
37
34
5
7
5 6
4 4
8
6
18 19
15
17
2014 2015 2016 2017
Methods for Managing T&E Reporting
Consistent mix ...
SMALL
BUSINESS
MID-SIZE
BUSINESS ENTERPRISE
33%
37%
8%
6%
16%
56%
10%
2%
8%
24%24%
55%
7%
2%
12%
Web-based solution (Concu...
SMALL
BUSINESS
MID-SIZE
BUSINESS ENTERPRISE
33%
37%
8%
6%
16%
56%
10%
2%
8%
24%24%
55%
7%
2%
12%
Web-based solution (Concu...
Polling Question 3
a) Paper-based/spreadsheets
b) ERP system (Oracle, Microsoft Dynamics, etc.)
c) Web-based expense softw...
The #1 reason companies turn to
automation: simplifying expense
reporting process for employees
and managers (59%)
Certify...
27%
27%
30%
40%
59%
0% 10% 20% 30% 40% 50% 60% 70%
Reimburse employees faster
Improve employee compliance rates to corpora...
Who’s Turning to T&E Automation?
27%of all companies
planning to make the
switch will do so in the
next 12 months
Certify ...
How does T&E automation
eliminate inefficiencies and
help control spending?
Must-Have Expense Reporting Features
Automation: Expense report creation, workflow process and
approvals, direct credit ca...
Mobile Makes T&E Easy for Employees
• Optical character recognition/auto-fill: snap photos
of receipts, automatically pars...
97% of business travelers carry at
least one mobile device; 80% used
their smartphone to plan or book
corporate travel in ...
Control Spending Before It’s Expensed
Pre-Trip Approval:
Requires manager authorization prior
to booking; configurable by ...
Companies that track and apply
unused tickets can save 5-8% of
total annual travel budget
2015 GBTA Ancillary Fee Handbook
Automate Policy Enforcement
• Set hard/soft policy controls: spending caps, report
requirements (i.e. meal attendees), ven...
Building company travel policy into
T&E expense reporting software has
been shown to improve compliance
rates as much as 4...
Integrate Systems, Maximize Efficiency
• Accounting systems: automate key accounting
functions and streamline workflow
• C...
Companies with an integrated T&E
solution experience 64% fewer
instances of reimbursement errors
Aberdeen Group 2014
Reporting Visibility Delivers Control
Workflow: monitor people and process, approval
paths, identify delays and other road...
Improving visibility into spend is a
driving force behind the switch to
automation for 30% of companies
Certify Annual Exp...
Closing Thoughts
• Setting the Foundation for Effective T&E Expense Management
• Review your company’s T&E policies; if yo...
Additional Resources
• 2017 Expense Management Trends & Benchmarks White Paper
• T&E Expense Management Customer Success S...
Questions?
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2017 T&E Expense Trends and Benchmark Spending | March 22, 2017

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2017 T&E Expense Trends and Benchmark Spending | March 22, 2017

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2017 T&E Expense Trends and Benchmark Spending | March 22, 2017

  1. 1. 2017 T&E Expense Trends and Benchmark Spending March 22, 2017
  2. 2. Learning Objectives • Factors contributing to high expense report processing costs • Top expense management pressures, pain points and areas of opportunity • Annual budget and benchmark spending by category for T&E expenses • Finance professionals’ must-have expense reporting features for 2017 • How automation helps to eliminate inefficiency and control costs Attending this event will help you understand:
  3. 3. 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 get to your questions during the Q&A/panel discussion at the end of the event. If we do not get to your question, we will follow up with you directly.
  4. 4. 360 Thought Leadership Consulting helps companies define and unlock the strategic value of their thought leadership programs. Formerly, Ernie served as Vice President, Educational Programs for Proformative, as the Director of Treasury Services and as a Director of the Corporate Treasurers Council for the Association for Financial Professionals. Ernie Humphrey Chief Executive Officer Featured Speaker
  5. 5. • 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 nearly 40 million expenses and receipts valued at $10+ billion in 2016 About Certify
  6. 6. Certify Annual Trends Study 2017 600+ accounting professionals from outside the Certify customer base:
  7. 7. T&E Spending by U.S. Companies 1. Global Business Travel Association 2016 $293.1b 2017 travel and entertainment spending by U.S. companies + 3.8% from the previous year
  8. 8. Business Investment in T&E 6-12% total annual budget for T&E expenses (Aberdeen Group 2014) PayStream Advisors 2016 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
  9. 9. T&E spending ranks as the 2nd most difficult operating expense category to control Forrester Research 2014
  10. 10. Polling Question 1 a) Meals b) Mileage c) Airfare d) Not sure As a percent of total spending, what was your company’s largest expense category in 2016?
  11. 11. Key Survey Results & Trends
  12. 12. 1. Meals 19% 2. Airfare 15% 3. Lodging 14% 4. Misc. 13% 5. Gas 11% 6. Taxi 9% 7. Cell phone 5% 8. Car rental 5% 9. Supplies 5% 10. Shipping 2% 11. Tolls 1% 12. Parking 1% How the Expense Budget is Spent Certify SpendSmart Report, Q4 2016 Meals Airfare Lodging Misc. Gas Taxi Cell Phone Car Rental Supplies Shipping Tolls Parking
  13. 13. Meals Airfare Lodging Misc. Gas Taxi Cell Phone Car Rental Supplies Shipping Tolls Parking 1. Meals 19% 2. Airfare 15% 3. Lodging 14% 4. Misc. 13% 5. Gas 11% 6. Taxi 9% 7. Cell phone 5% 8. Car rental 5% 9. Supplies 5% 10. Shipping 2% 11. Tolls 1% 12. Parking 1% $98.74 DAILY MEAL COST 2016 Certify SpendSmart Report, Q4 2016 2016 Business Travel News Corporate Travel Index How the Expense Budget is Spent
  14. 14. Category 2016 2017 Difference Gas $30.32 $29.77 –1.81% Airfare $274.00 $316.17 +15.39% Lodging $223.45 $210.19 –5.93% Car Rental $186.45 $190.74 +2.30% Cell Phone $92.24 $89.00 –3.51% Meals $26.06 $27.02 +3.68% Misc. $55.71 $68.20 +22.41% Taxi $31.82 $27.90 –12.31% Benchmark Spending by Category Certify SpendSmart Report, Q4 2016-2017
  15. 15. www.gsa.gov, accessed 1/30/17 2017 U.S. GSA Per Diem Rates GSA Lodging, Meals & Incidentals for San Francisco, CA Lodging (per night) Breakfast Lunch Dinner $267 $17 $18 $31 Incidental -- $5 $5 $5
  16. 16. Certify Annual Travel & Expense Management Survey 2016 Budgeting & Category Spending Caps We do not have expense category limits 26% Based on internal historical spending 23% Follow U.S. GSA per rate guidelines 23% Determined by annual budgeting process 21% Other 7%
  17. 17. Inefficiencies in T&E Expense Reporting
  18. 18. Expense Reporting Inefficiencies Expense Reporting Around the World: Practices, Pain Points, and Productivity, GBTA, 2015 up to minutes to complete one expense report minutes to correct expense reports errors average number of reports with errors 23 15-22 22%
  19. 19. Print spreadsheets, tape or staple receipts and make copies Enter expenses in Excel with category, vendor, dates, etc. And then … waitGather receipts, itineraries and write down non-receipt items Sign report/date report and present or mail to manager Employees Manual Expense Reporting Process AccountantsManagers
  20. 20. Check expenses for receipts, review for out- of-policy items, etc. Receive reports for all employees at different times during the month/quarter If errors, return report to employee to start over; wait for resubmission Sign/approve reports and route to the next manager or to AP Employees AccountantsManagers Manual Expense Reporting Process
  21. 21. Manually enter data from accounting software to payroll for reimbursementManually enter expense data into accounting software Check for receipts, manager approvals, out-of-policy items, etc. Receive reports for all employees at different times of the month/quarter Match receipts with line- items, verify all charges, dates and vendors Employees AccountantsManagers Manual Expense Reporting Process
  22. 22. Leading frustrations for T&E program administrators: Top Expense Management Pain Points 2015 2016 2017 Employees losing paper receipts/submitting without receipts 33% 50% 52% Employees failure to submit reports on time 39% 45% 51% Time it takes to reconcile, review and approve reports 38% 38% 36% Reviewing for policy violations 20% 30% 28% Errors on expense reports (incorrect codes, amounts, etc.) 23% 28% 26% Certify Annual Expense Management Trends Report 2017
  23. 23. Top T&E Pressures to Improve in 2017 36% Need to reduce expense processing costs 31% Lack of control over T&E spending 31% Poor visibility into travel/expense data 21% Frequent non-complaint travel/expenses 20% Lengthy reimbursement times Certify Annual Expense Management Trends Report 2017
  24. 24. Polling Question 2 a) Reducing process and workflow inefficiencies b) Tighter controls for employee T&E spending c) Lowering expense report processing costs d) Increasing travel policy compliance What is your organization’s top area for T&E improvement in the year ahead?
  25. 25. Cost to Process a Single Expense Report $6.85 fully automated $17.31 semi-automated $26.63 manual process PayStream Advisors 2016 31% 16% 9% 44% Under $7 per report $10−$20 per report $25 or more per report We do not track these costs Certify Annual Expense Management Trends Report 2017
  26. 26. T&E Policy Compliance 79%of all companies report having a written T&E policy in place 75%manually review each expense report report for policy violations Certify Annual Expense Management Trends Report 2017
  27. 27. An estimated 20% of a total T&E spend is considered out of policy for the average company Aberdeen Group 2012
  28. 28. 7% 39% 41% 15% 26% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% T&E policy is not enforced Employee is responsible Manager manually review each expense Manager manually review, checking only high value expenses T&E system automatically flags out- of-policy violations Policy Enforcement Practices (all companies) Certify Annual Expense Management Trends Report 2017
  29. 29. 44 37 35 37 29 32 37 34 5 7 5 6 4 4 8 6 18 19 15 17 2014 2015 2016 2017 Methods for Managing T&E Reporting Consistent mix of expense management systems: Certify Annual Expense Management Trends Report 2017 Cloud/web-based Excel spreadsheets ERP system Homegrown solution Pen and paper
  30. 30. SMALL BUSINESS MID-SIZE BUSINESS ENTERPRISE 33% 37% 8% 6% 16% 56% 10% 2% 8% 24%24% 55% 7% 2% 12% Web-based solution (Concur, IBM, etc.) Microsoft Excel/spreadsheets Pen and paper Homegrown solution ERP/accounting package (Oracle, SAP, etc.) T&E Systems by Company Size Certify Annual Expense Management Trends Report 2017
  31. 31. SMALL BUSINESS MID-SIZE BUSINESS ENTERPRISE 33% 37% 8% 6% 16% 56% 10% 2% 8% 24%24% 55% 7% 2% 12% Web-based solution (Concur, IBM, etc.) Microsoft Excel/spreadsheets Pen and paper Homegrown solution ERP/accounting package (Oracle, SAP, etc.) AUTOMATED SYSTEMS: 80% enterprise • 36% small businesses T&E Systems by Company Size Certify Annual Expense Management Trends Report 2017
  32. 32. Polling Question 3 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 expense reporting?
  33. 33. The #1 reason companies turn to automation: simplifying expense reporting process for employees and managers (59%) Certify Annual Expense Management Trends Report 2017
  34. 34. 27% 27% 30% 40% 59% 0% 10% 20% 30% 40% 50% 60% 70% Reimburse employees faster Improve employee compliance rates to corporate policy Gain reporting and analytics around T&E spend Provide system accessibly from anywhere (online, mobile) Simplify process for employees and managers Driving Force Behind T&E Automation Certify Annual Travel & Expense Management Survey 2017
  35. 35. Who’s Turning to T&E Automation? 27%of all companies planning to make the switch will do so in the next 12 months Certify Annual Travel & Expense Management Survey 2017 Organizations planning to switch systems or currently in the process of evaluating vendors for a new automated system:
  36. 36. How does T&E automation eliminate inefficiencies and help control spending?
  37. 37. 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/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: Greater visibility into process and spending by category, department, employee, etc. Certify Annual Travel & Expense Management Survey 2017
  38. 38. Mobile Makes T&E Easy for Employees • 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 features for mobile T&E reporting: Aberdeen Group 2014 90% best-in-class companies have remote expense management capabilities via mobile app 2016
  39. 39. 97% of business travelers carry at least one mobile device; 80% used their smartphone to plan or book corporate travel in 2014 Expedia/Egencia Mobile Index 2014
  40. 40. Control Spending Before It’s Expensed 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) $
  41. 41. Companies that track and apply unused tickets can save 5-8% of total annual travel budget 2015 GBTA Ancillary Fee Handbook
  42. 42. Automate Policy Enforcement • Set hard/soft policy controls: spending caps, report requirements (i.e. meal attendees), vendor preference • Eliminate duplicate receipts/expenses: automatically identify duplicate receipts, flag out-of-policy expenses • Manage expense reporting on time: automatic report build reports, employees/manager notifications Instant policy check via the mobile expense reporting app
  43. 43. Building company travel policy into T&E expense reporting software has been shown to improve compliance rates as much as 44% Aberdeen Group 2013
  44. 44. Integrate Systems, Maximize Efficiency • 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
  45. 45. Companies with an integrated T&E solution experience 64% fewer instances of reimbursement errors Aberdeen Group 2014
  46. 46. Reporting Visibility Delivers Control Workflow: monitor people and process, approval paths, identify delays and other roadblocks Compliance: review processed and in-progress reports, policy violations, fraudulent behavior Spending: analyze by expense category, mileage, department, employee, and more
  47. 47. Improving visibility into spend is a driving force behind the switch to automation for 30% of companies Certify Annual Expense Management Trends Report 2017
  48. 48. Closing Thoughts • Setting the Foundation for Effective T&E Expense Management • Review your company’s T&E policies; if you do not have them, create them • Improve the travel IQ of employees and take measures to enforce policies • Arm travelers with better technologies to simplify expense reporting • Automate key components of the expense management process • Benchmark company T&E spending regularly • Leverage analytics to improve intelligence and data Setting the Foundation for Effective T&E Expense Management
  49. 49. Additional Resources • 2017 Expense Management Trends & Benchmarks White Paper • T&E Expense Management Customer Success Stories • Expense Management Cost Calculator • Certify SpendSmart TM Reports
  50. 50. Questions?

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