Certify recently surveyed more than 500 CFOs, controllers and accounting professionals from outside of its customer base to uncover the top trends and best practices in expense management today. Find out what other small, midsized and enterprise businesses like yours are doing to navigate the complex expense reporting process, streamline workflow, and increase spending visibility and control.
Learn more about:
• Annual T&E expense spending by category and company size
• Common expense management challenges and expected benefits
• The factors and estimated costs to process an individual expense report
• Types of systems and processes currently used for expense management
• What it takes to achieve a return on investment with a new system
2. 2
Learning Objectives
• T&E expense spending benchmarks by category and average amount
• Common expense management headaches and expected benefits
• The factors and estimated costs to process an individual expense report
• Types of systems and processes currently used for expense management
• What it takes to achieve a return on investment with a new system
After attending this event you will understand:
3. 3
• Today’s event will be recorded and all attendees will be kept in
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question, we will follow up with you directly.
Webinar Learning Objectives
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 with first fully automated expense
system
• 64 languages, 140+ currencies, clients in 80
countries
• #1 highest rated expense management software
for user satisfaction on G2 Crowd
• Over 30 million expense transactions in 2015
• Processing over $10+ billion/year in expense
reports
About Certify
7. 7
T&E Spending is Substantial
$1.25t U.S. business travel
spending 2015
(estimate: GBTA 2015)
$310bglobal business travel
spending 2015
INTERNATIONAL DOMESTIC
$2,502 $1,002
Average base cost per business
trip for air, hotel and car rental
(Travel Leaders Corporate 2015)
8. 8
25% of all U.S. companies
spend $1 million or more on
annual T&E expenses
(PayStream Advisors 2015)
of total annual budget for T&E
(Aberdeen Group 2014)
10-12%
Business Investment in T&E
9. 9
Total Respondents: 508 companies (non-Certify clients)
Audience:
• 24% Small business: less than 100 employees
• 49% Mid-sized business: 101 – 999 employees
• 27% Large business: 1,000+ employees
Demographics:
• 46% Director-level or above with expense reporting responsibility (CEO, CFO, etc.)
• 45% Manager, controller or accountant
• 9% Other (accounting staff, consultant, administrative, etc.)
Fourth Annual Expense Management Trends Survey
Conducted in December 2015
About the Data
12. 12
Meal Category Average Expense 2015 GSA Per Diem Tier 1
Breakfast $12.33 $17
Lunch $21.56 $18
Dinner $25.06 $34
Total Per Day $58.95 $74*
*includes $5 for incidental expenses
Reference: Certify’s SpendSmart™ Report, Q4 2016 | http://www.gsa.gov/portal/content/101518
Benchmark Spending for Meals
13. 13
Expense Category Spending Limits
How companies set T&E policy maximums for meals, hotel and
airfare:
25%
25%24%
20%
6%
We do not have expense category limits
Based on internal historical spending
Follow U.S. GSA per diem rate guidelines
Determined by annual budgeting process
Other
Reference: Certify’s Annual Travel & Expense Management Survey 2016
15. 15
a) Paper-based/spreadsheets
b) ERP system (Oracle, Microsoft Dynamics, etc.)
c) Web-based software (Certify, Concur, etc.)
d) Not applicable
How does your organization
currently
manage its T&E spend?
POLLING QUESTION 1
16. 16
Methods for Managing T&E Reporting
The mix of expense management systems remains consistent:
Reference: Certify’s Annual Travel & Expense Management Survey 2013-2016
17. 17
37%37%9%4%13%
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
MANUAL SYSTEM USAGE
70% small businesses
26% enterprise
22%
55%
10%
5%
8%
37%
37%
9%
4%
13%
46%
16%
4%
6%
28%
SMALL
BUSINESS
MID-SIZE
BUSINESS
ENTERPRISE
Reference: Certify’s Annual Travel & Expense Management Survey 2016
18. 18
Integrated Efficiencies
System Integrations Currently Used
67%
61%
77%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
GENERAL LEDGER
ACCOUNTS PAYABLE
CREDIT CARD
Web-based
Reference: Certify’s Annual Travel & Expense Management Survey 2016
20. 20
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?
POLLING QUESTION 2
21. 21
Corporate T&E Policy
85%of companies indicate
they have a T&E policy
73%of those companies
are manually reviewing
for policy violations
Manual policy review is inefficient,
prone to error and fraud
Reference: Certify’s Annual Travel & Expense Management Survey 2016
22. 22
6%
31%
42%
20%
26%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
T&E policy is not
enforced
It is the responsibility
of the employee
Manager manually
review each expense
Manager manually
review, checking only
high value expenses
T&E system
automatically flags
out-of-policy violations
Enforcing T&E Policy Compliance
Methods Used to Enforce Policy Compliance
52%
of companies on a
web-based system
Reference: Certify’s Annual Travel & Expense Management Survey 2016
23. 23
Why Policy Enforcement Matters
$35,000 for a dozen cases of wine
$25,000 house rental for one day
$20,000 private plane rental
$18,000 night out in Las Vegas
$4,000 for one bottle of champagne
Reference: Certify Craziest Expenses Survey 2015 (non-customers)
Top 5 Highest Expense Amounts of 2015
25. 25
Expense Management Automation
• Cost savings: reduce costs in time and materials
required to process expense reports
• Process efficiency: eliminate data entry and
errors, improve administrative reporting
• Increased productivity: mobile and cloud-based
accessibility simplify expense management
• Policy compliance: integrate company T&E
policies and spending controls
Why do best-in-class companies turn to
automation?
26. 26
Improving Expense Management
Are you planning to switch or currently in the process of
evaluating vendors for a new web-based system?
62% of all companies planning to make the
switch will do so in the next 12 months
37%
SMALL
BUSINESS
46%
MIDSIZED
COMPANIES
53%
ENTERPRISE
Reference: Certify’s Annual Travel & Expense Management Survey 2016
27. 27
Driving Force Behind the Switch
14%
14%
25%
28%
32%
40%
66%
0% 20% 40% 60% 80%
Integrate multiple finance & HR systems into one system
Increase frequency of expense reports being submitted
Reimburse employees faster
Improve employee compliance rates to corporate travel
policies
Gain reporting and analytics around T&E spend
Provide expense system accessibly from anywhere (online,
mobile)
Simplifying the expense reporting process for employees
and managers
Reference: Certify’s Annual Travel & Expense Management Survey 2016
28. 28
Leading frustrations for T&E program administrators:
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Top Expense Management Pain Points
50%
employees
losing receipts
45%
employee’s failure
to submit reports
on time
38%
time it takes to
reconcile, review
and approve
30%
reviewing for
policy violations
28%
errors on
the report
29. 29
Key Areas of Improvement for 2016
Process improvements top the list:
9%
10%
11%
21%
37%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Systems and data integration
Mobility/mobile access
Travel booking
Transparency/visibility into reporting data
Expense management process
Reference: Certify’s Annual Travel & Expense Management Survey 2016
30. 30
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 and approval, and policy tools
Reporting: Complete visibility into process and spending by
category, department, employee
Compliance: Duplicate receipts/expenses, category spending
limits, automatic notification of violations
Integration: Accounting software, general ledger, HRIS, CRM,
ERP, ACH direct deposit
32. 32
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?
POLLING QUESTION 3
33. 33
Average cost to process a single expense report:
$6.85
fully automated
$17.31
semi-automated
$26.63
manual
(PayStream Advisors)
28%
19%
5%
48%
Under $7 per report $10−$20 per report
$25 or more per report We do not track these costs
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Expense Reporting Costs
34. 34
• Hard costs for paper, printing and postage
• Hours to create, review and approve reports
• Time required for reconciliation and reimbursement
• Storage fees to archive expense reports
• Lost productivity
Hidden Costs of a Manual System
Reducing processing costs is the #1 T&E
improvement for 48% of all best-in-class
companies
(Aberdeen Group)
35. 35
2015 Expense Trends Survey
2016 Expense Trends Survey
Average Time to ROI is Improving
Reference: Certify’s Annual Travel & Expense Management Survey, 2015 & 2016
36. 36
How ROI is Achieved
What are the ways you’ve achieved ROI on your
new expense management system?
58%
53%
33%
26%
22% 22%
Improved
efficiency/expense
reporting process
Reduction in
processing costs (less
paper, postage,
storage etc.)
Mobile accessibility Increased employee
productivity
Elimination of payment
for duplicate expenses
Reduction in
overhead/staffing
requirements
Reference: Certify’s Annual Travel & Expense Management Survey 2016
58%
53%
33%
26%
22% 22%
Improved
efficiency/expense
reporting process
Reduction in
processing costs (less
paper, postage,
storage etc.)
Mobile accessibility Increased employee
productivity
Elimination of payment
for duplicate expenses
Reduction in
overhead/staffing
requirements
37. 37
Benefits of Investing in Automation
Actual benefits of using a web-based system
surpass expectation in every category
Reference: Certify’s Annual Travel & Expense Management Survey 2016
38. 38
Unexpected Results
Web-based expense systems and data are being
leveraged for other business functions:
%ofcompaniesreporting
Annual budgeting and planning:
44%
Auditing: 43%
Invoicing and payments: 39%
Regular forecasting (monthly,
quarterly, etc.): 28%
Financial reporting (Sarbanes-
Oxley, SEC, etc.): 25%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Reference: Certify’s Annual Travel & Expense Management Survey 2016
39. 39
Closing Thoughts
1. When is the last time we did a thorough review of our T&E policies?
As your company grows, effectively managing T&E expenses while keeping employee frustration to a
minimum becomes much more challenging.
2. What is the rate of compliance with our T&E travel policies?
Non-compliance can be costly in terms of hard dollar cost and can contribute to non-compliance with
company policies well beyond those related to T&E expenses.
3. What are we doing to actively manage our T&E expenses?
The ability to forecast and react to forces impacting T&E spend will save money, and help mitigate the
variance between your company’s actual verses expected financial results.
4. How do we benchmark our T&E spend?
Benchmarking is a great way to assess if your travel expenses are in line with your competitors, and to
determine if variances from reactive benchmarks make sense from a strategic perspective.
Considering what you just learned in this presentation,
ask yourself the following:
40. 40
Closing Thoughts (cont’d)
5. What is the average time it takes to reimburse an employee once they submit an expense report ?
There is no reason to frustrate company travelers with long reimbursement. Faster reimbursement cycles
leads to happier employees.
6. What is the current level of automation in our T&E process?
Advances in cloud-related technologies have changed the economics of automating manual processes. If
your T&E management is primarily manual, there may well be cost-effective ways to upgrade systems.
7. Are we using, or have we looked at a cloud-based T&E expense management solution?
If the answer is no, it is hard to argue it does not deserve 10 minutes of research to start, given the
maturity of these systems and the benefits that companies of all sizes are realizing in managing a critical
category of business expense.
Considering the information in this presentation, ask
yourself the following:
In addition, According to a 2014 Forrester Report, T&E ranks as the second most difficult operating expense category to control.
Note, the size and unbiased nature of the study as the repondents are not Certify Clients.
Ashley , have the demographics shifted at all over the past four years?
A few notes, these categories are driven by how companies allow employees to categorize expenses. Note that Misc, is 17%, tewoo ponts here, one category you do not see is “Uber”, which according INSERT STUDY has passed Taxi’s and Car Rental in terms of dollars expensed among Certify customers. Also, this is a sign of where companies face a big challenge in terms of managing expenses, how can you benchmark and manage something if you do not know what it is?
Before we move on, Ashley, the data on this slide comes from Certify’s SpendSmart Q4 2016 can you explain to us the nature of the quarterly SpendSmart reports produced by Certify?
In looking at benchmarks it is important to look at year over trends and not just one data point. Note this data is from Certify’s 2014 and 2015 SpendSmart Reports.
A few notes
• Most business travelers are going to the major metros
• Some cities in the highest Per Diem tier: NYC, Los Angeles, Chicago, Washington, D.C., San Diego, San Fran, Seattle, Pittsburgh, Baltimore
• This particular SpendSmart transaction data is not filtered by T&E policy compliance (but we have the technology to enforce!)
This is what I call a “WOW” slide: 25% of repondents have NO expense category limits. Let that sink in for a few seconds. And, 25% set limits based on historical trends, why might that be? Company Culture, sales? These are two red flags that a company’s T&E spend may be a bit out of control. I think these numbers are is mostly due to a lack of education around the amount of money spent on T&E in aggregate. I find these numbers especially surprising given today’s world of looking at profitability by customer, I hope to see this number as going down in the future as companies become more educated in the value of effectively managing T&E spend and/or the cost of staying in the dark on its relevance. We will discuss the value of effective T&E management throughout the remainder of the webinar.
I would have expected the cloud/web-based number to rise in 2016, but again note that we are surveying non-certify customer and those who could have been surveyed in 2015 who have upgraded would not have taken the survey in 2016
I have a few comments here:
Small Business- We still see the majority using Excel, not surprising, and I think the reason is due to the fact many may not have looked at the economics of an upgrade. This is a place where it is important for companies to get it right, for many companies, growth means more sales people, that means more T&E expenses, grow fast, your T&E expense can blow up, you need to have the policy, process and technology in place before that happens.
Enterprise- I am a bit surprised to see 28% use ERP solutions- ASHLEY- what do you think? Does that number surprise you?What is the functionality of ERP systems vs, web-based solutions?
Is this looking at companies that use Excel vs. those who use web-based systems and whether or not they use systems that integrate well and offer data feeds without manual intervention? So, is it, those who use integrated systems in credit card processing and accounting, 74% use web-based T&E and 24% use Excel. Is the point that those who use web-based T&E systems realize great efficiency in the arena of accounts payable?
Ashley, I will pass the floor over to you to give us your thoughts on this slide
Two notes, I wish that 100% of companies had one, but 85% is higher than I expected. I am surprised that 73% are only manually reviewing reports for policy violations. One main point, many companies rely on managers to review for policy violations as they are approving expense reports. I would suspect that many managers do not know the policies themselves, and often trust their direct reports and hit approve when they see a report. Manual policy review is inefficient, and prone to error and creates exposure to fraud relative to an automated review of policy violations.
The numbers I find the most troubling here are:
31% rely on employees
20%, managers manually review only high dollar expenses
6% say T&E policy is not enforced
Ashley, what are some of the other interesting items you have seen expensed over the 4 years of the survey?
We might want to remove “best-in-class” here. As not only best-in-class companies look to automation, and using automation does not make them best on class. It takes people and process as well as technology alignment to be “best-in-class”.
Change is on the way, let’s take a look at the forces driving this meaningful shift in the adoption of T&E solutions in 2016.
I really like this slide as it reveals all the pain points that those involved in the T&E expense report and reimbursement process feel and how the entire process impacts employees across the enterprise.
From my perspective as a finance professional, the visibility of the data is key. If we want to manage anything the first step is visibility. I ask, can I see it, can I measure it? Can I benchmark it. If yes, then I can effectively manage it.
This slide is great in summarizing the must haves.
Ashley, can you speak to the additional features that Certify offers and what else is coming in 2016?
Bob: We have arrived our final poll question, so I’m going to turn your attention to our moderator.
Steve: Thank you. As with the previous questions, you may respond immediately, while I read the question and response options. Our fourth poll question for today is… “Question?”
Please choose from one of the following options, and then click the “Submit” button, located on the right, below the response options, to be sure that your answer is properly recorded:
Response option
Response option
Response option
Now I’m going to turn the presentation back over to our presenter.
Bob clicks the yellow arrow to display the poll results.
This is a fun slide and I would say another “WOW” slide, but in this case the “WOW” needs to be taken with a grain of salt. The numbers are staggering, partly because people are guessing once we get the cost of a manual report. That being said, there are many components that go into the actual cost of processing report that need to be considered, that $6.85 may not be too far off believe it or not.
I see these cost as similar to the costs of processing checks which are often not considered when companies look at switching from cutting checks to making payments via electronic payments. NOTE, converting reimbursement for T&E reports from checks to direct deposit can be a huge savings to companies in terms of the cost of reimbursing the employee.
