Expense management professionalservices_imagetag(1)

© 2016 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com
Underwritten in part by
2016 Expense Reporting for
Professional Services
Increasing Productivity and Professional Services Success with Expense Reporting Software
Q4 2016 | Featuring insights on...
»» Current Expense Reporting Trends in the Professional
Services Industry
»» P2P Automation for Professional Services Organizations
»» Software Adoption Best Practices for Professionals
Services
»» A Leading Expense Reporting Software Provider with
Professional Services Experience

Q4 2016 © 2016 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com2
Introduction 3
Survey Results 4
Expense Reporting Solutions for Professional Services 10
Adopting a Professional Services-Focused Solution 13
Conclusion 15
ImageTag 16
About PayStream Advisors 19
Contents

Introduction
When it comes to improving control over company spend, automating
the expense management process is one of the most effective ways to
increase efficiency, visibility, and savings. This automation can also go
a long way towards improving employee satisfaction and productivity,
which is especially important for the more client-focused, creative-
minded companies in the professional services industry. Maintaining
efficient expense reporting processes can be a challenge in fast-paced,
varying business environments like those in the industry—without
automation, professional services organizations suffer from slow
approval times, lengthy reimbursement cycles, and other processing
pains.
PayStream Advisors has found that many professional services
companies hesitate to adopt expense reporting software because of
a lack of awareness of the available solutions. This lack of education is
not unique to this industry; many organizations across a wide range of
market segments and industries do not take the time to learn about
the benefits of automation. However, these benefits are numerous—
expense reporting solutions help professional services companies gain
transparency into processes, manage spend across a wide range of
projects and teams, and greatly improve expense report approval and
employee reimbursement times. In all, expense reporting automation
supports the unique qualities of the industry through control and
visibility, and improves the satisfaction—and output—of the industry’s
talented professionals.
This report seeks to highlight the value of expense reporting software
specifically for the professional services industry by analyzing recent
trends in expense reporting management among these companies. It
includes a guide to leading expense reporting solutions that tailor their
solutions specifically to the professional services industry. It also offers
a profile of an expense reporting solution provider with extensive
experience in the professional services sphere.

Survey Results
In order to gauge the current state of expense reporting trends among
professional services organizations, PayStream Advisors has extracted
data from the 2016 Travel and Expense Management (TEM) market
survey of several hundred North American professionals from a variety
of industries. This data reflects the trends of professional services
companies in particular, and covers the following subverticals:
»» Accounting
»» Architecture
»» Engineering
»» Financial Services
»» Consulting (IT, Management, etc.)
»» Legal
»» Advertising, Marketing, and PR
PayStream Advisors’ survey and industry benchmarking research shows
several trends across many types of professional services companies,
and in a variety of back-office processes. For example, professional
services organizations tend to fit in small and mid-sized market
segments, and their products are often intangible. For these reasons,
professional services companies often process fewer POs and invoices
per month than is typical in other industries, such as manufacturing
or healthcare companies that are typically larger and have more
suppliers. The same tendencies are reflected in expense management;
survey results show that over half of surveyed professional services
companies send fewer than 500 expense reports per month, see
Figure 1.
EXPENSE REPORTS PROCESSED PER MONTH
51%
20%
17%
7%
5%
Less than
500
More than
10,000
500–2,500 2,500–5,000 5,000–10,000
Figure 1
Most Professional
Services Organizations
Send Less than 500
Expense Reports Each
Month
“How many expense
reports does your
organization process per
month?”

Despite relatively few expense reports, research shows the industry
has moderate levels of expense reporting automation adoption,
Figure 2. In any industry, higher adoption rates typically reflect a more
progressive attitude towards technology. This attitude is also reflected
in above-average adoption rates for invoice receipt and purchasing
software adoption among professional services organizations, as found
in PayStream’s 2016 P2P for Professional Services report.
Although adoption is relatively high, Figure 2 shows that many
organizations are still operating with manual processes. A sizable group
(20 percent) of organizations have at least some automation, but this
could simply mean their employees use a business travel company
to book business trips—it does not necessarily mean that all of their
processing needs are met. In fact, PayStream has found that although
professional services companies are likely to have at least partial
automation, they still tend to use inefficient strategies in other areas of
processing.
TEM PROCESS AUTOMATION ADOPTION
29%
27%
20%
15%
5%
4%
We are fully automated and
use a single/integrated system
Our process is entirely manual
We are fully automated but
use disparate systems
We are planning to implement
an automated solution
within the next 6 months
We use a third-party
outsourcing provider
We have some automation
Figure 2
The Majority of
Companies Surveyed
are Fully Automated
“Which of the following
statements best describes
the extent of automation in
your TEM process?”

For example, PayStream’s 2016 P2P for Professional Services report
shows that many professional services organizations manually enter
data from business documents into their financial systems , even if
they receive those documents via email. TEM survey results show that
organizations without an expense management system typically fill out
spreadsheets for their expense reports, attach receipts, and submit
them for approval, or they mail paper receipts to their AP department,
see Figure 3. This means that not only are employees manually
compiling and submitting their own expenses, the AP department is
likely manually entering expense and receipt data into their financial
systems. Manual data entry consistently leads to lengthy expense
report approval times and reimbursement cycles.
EXPENSE RECEIPT SUBMISSION METHODS
46%
28%
24%
2%
0%
Employees scan and attach
receipts to expense reports
in an automation solution
Employees scan and attach
receipts to spreadsheet reports
Paper receipts are mailed
to the AP department
Fax
Paper receipts are mailed
to our outsourcing provider
Figure 3
Most Professional
Services Employees
Scan and Attach or Mail
Receipts for Approval
methods do your
employees use to submit
expense receipts? (Check all
that apply)”

The professional services industry suffers from lengthy approval cycles
and the resulting process pains in many areas of back-office processes.
When professional services organizations were asked about their
greatest pain points in expense management, most reported process
inefficiency, a lack of visibility into spend, and lengthy reimbursement
cycles, see Figure 4.
By pinpointing the industry’s process pains, PayStream has also
identified key characteristics for an expense reporting solution to
meet the efficiency needs of professional services organizations. One
necessity is a solution’s ability to meet the industry’s complex business
structure requirements. Professional services organizations often have
many small departments routing back-office documents by hand or
email across multiple teams and locations, and the business processes
can be complex and changing. Professional services organizations also
vary widely in how their employees work and the ways in which they
provide services for their clients; these companies’ operations often
run on a project-based structure, with one or more account managers
and a team of creative professionals assigned to each project. The
associated costs can be very complex—and possibly stretched over
a long period of time. In all, this requires a great deal of control and
visibility in order to maintain efficiency throughout an engagement.
For example, for organizations in consulting or advertising, expenses
could consist not only of travel costs, but also services and materials
bought while on a client’s site that ultimately go into production costs
BIGGEST EXPENSE MANAGEMENT CHALLENGES
34%
23%
18%
15%
6%
4%
Manual data entry and
ineﬃcient processes
Lack of visibility into spend
Inability to enforce
corporate travel policies
High cost of processing
an expense report
Increase in overall TE expenses
Lengthy reimbursement cycles
Figure 4
Organizations Suffer
from Inefficiency, Poor
Visibility, and Lengthy
Reimbursement Times
“What are the biggest
challenges your
organization faces in the
expense management
process? (Select up to
three.)”

of the final delivery. Properly reporting all incurred costs requires
careful effort and accuracy in order to ensure compliance with budgets
and complete, timely reimbursement.
The expense reporting solution must also be able to comply with
and support the industry’s people-orientated business focus, and the
unique work culture within many professional services companies.
Professional services companies’ creative teams are often among their
most valuable assets, and these employees often rely on high levels
of ingenuity and energy to provide the best services. These services
require more in-depth interaction with clients, as a professional
services company’s business success is based on customer satisfaction
to a much higher degree than an industry like manufacturing, which
tends to operate higher up in the supply chain. In turn, professional
services companies realize the close connection employee satisfaction
around work environments and tasks has with output. This creates a
greater focus on people in these companies, driving them to ensure
that their workforce feels supported.
When professional services organizations are unable to manage their
back-office processes efficiently, it can have can have a direct impact
on their employees’ happiness, productivity, and output. In contrast,
organizations that adopt expense reporting automation experience
improvements in these areas, and list employee satisfaction among the
most important benefits they have achieved, see Figure 5.
BIGGEST BENEFITS OF TEM PROCESS AUTOMATION
29%
21%
18%
15%
10%
4%
Quicker reimbursement of
employee expenses
Improved employee satisfaction
Lower processing costs
Better ability to enforce
travel policies
Better compliance with regulatory
requirements (SOX, FASB)
Improved visibility over spend
Increased corporate card
usage and rebates 3%
Figure 5
Professional Services’
Top Expense
Reporting Automation
Benefits are Expense
Reimbursement
Improvement and
Employee Satisfactions
“What are the greatest
benefits you have achieved
by automating your TEM
process? (Select up to
three.)”

Organizations also highly rank process improvements around
approvals and visibility when indicating their most valued expense
reporting tools, see Figure 6. Other important tools for this industry
include reporting and analytics support, which can greatly help
improve control over spend and identify process weak spots, and
mobile applications, which aligns with the more progressive nature of
professional service organizations. The following section explores the
features and value of these tools and others offered by today’s leading
expense management solutions.
BIGGEST BENEFITS OF TEM PROCESS AUTOMATION
24%
21%
16%
11%
10%
9%
Expense reporting approval
workﬂow and management tools
Expense report creation tools
Mobile application
Pre-trip travel booking
Employee reimbursement support
Expense report analytics
and reporting
Expense report auditing tools 7%
6%Pre-trip plans approval workﬂow
Figure 6
Organizations Highly
Value Approval
Workflow and Expense
Report Creation Tools
TEM features does your
company most value?
(Select up to three.)”

Expense Reporting Solutions
for Professional Services
Expense reporting solutions provide users with a wide range of tools
and features. When these solutions are integrated with a booking
tool, traveling employees can submit travel plans for approval prior
to a trip and arrange quality transportation and accommodations at
competitive prices. All employees can take pictures of receipts and
submit them for processing using OCR data capture technology,
eliminating the need for manual data entry. The software allows users
to allocate expenses to cost centers, explain non-compliant spend, and
attach credit card transactions to reports. After completing those steps,
employees can submit expense reports from their mobile device or
desktop at any time, and they have full visibility into the status of their
pending reimbursements. Approvers and auditors can see all out-of-
policy spend, and can approve parts of reports and reject others. In all,
expense reporting solutions give organizations more power—with less
effort—than they could ever achieve with manual procedures.
Expense reporting software for professional services improves
efficiency through flexible report creation tools and customizable
approval workflows, reducing cycle times and providing much-needed
visibility into spend. These solutions also adapt to the diverse and
creative nature of professional services employees’ daily work with
features that are easy to use, configurable, and visually appealing.
The following list highlights the benefits professional services
organizations gain from today’s leading expense management
solutions.
»» Paperless Processes – Expense reporting software allows
professional services organizations to eliminate paper receipts
and expense reports, as well as all the data entry related to
manually-driven processes, such as filling out spreadsheets. With
OCR data capture technology, employees can easily enter paper
receipts into the system, and through integration with corporate
cards, employees can create expense items and assemble reports
within minutes. This not only creates more control and visibility
into expenses, it save professional services staff valuable time and
allows them to stay focused on more value-added, strategic tasks.

»» Dynamic, Configurable Workflow – Improving workflow approval
efficiency is one of the greatest goals for professional services
organizations. Expense reporting solutions allow organizations to
route expense reports for approval through a variety of approval
stages and departments, as well as set up dynamic escalation and
forwarding controls to maintain timely approvals and employee
reimbursements.
»» Process Visibility – Expense reporting solutions alert users to
compliance issues, giving them opportunities to adjust or explain
out-of-policy entries. They also clearly identify non-compliant
expense reports, allowing approvers and auditors to automatically
send the reports back to users for correction. These controls
span many departments and offices; they also bring value to
professional services operations by giving managers real-time
insight into project or departmental budgets so that employees
have less risk of overspending. Many solutions also offer reporting
and auditing tools to help pinpoint inefficient spend strategies and
spenders who are frequently incorrect or possibly fraudulent.
»» Improved Cycle Times – The combination of paperless processes,
approval workflow automation, integrated policy controls, and
transparency into spend all work towards improving one of the
most troublesome problems for expense reporting—lengthy
reimbursement times. Expense reporting providers work with
organizations to reimburse their employees in the way the
organizations prefer. These options include direct deposit, which
research shows is the most popular method for reimbursement,
see Figure 7.
EMPLOYEE EXPENSE REIMBURSEMENT METHODS
Paper check
27%
47%
26% Direct deposit to
employee bank account
(outside payroll run)
Part of payroll transaction
Figure 7
Direct Deposit
is Professional
Services Companies’
Preferred Method of
Reimbursement
methods do you use
to reimburse employee
expenses? (Check all that
apply.)”

Quicker reimbursement not only improves a company’s spend
management, it also boosts employee morale, which can go a
long way towards improving productivity and business success for
professional services companies.
»» Employee Focus – In order to support the creative and strategic
mindset of professional services employees, it is important
that the expense reporting process is easy and fast. Expense
reporting solutions for professional services feature modern,
visually appealing interfaces that are intuitive and easy to learn,
requiring little to no training. These solutions allow employees to
quickly complete and submit reports without sacrificing accuracy
or compliance. Just as with quicker reimbursement cycles, the
benefits of improved employee satisfaction through an employee-
focused solution help improve output.
»» Mobility – Many of today’s expense reporting solutions offer
their tools through mobile applications, either in a native app
or with web-based, responsive design that allows the app to
function uniformly across every device. Mobile applications further
streamline the expense reporting process by enabling employees
to submit receipts, assemble and submit expense reports, and
keep track of report statuses and reimbursement using their
phone. Mobile apps also help speed up approval times by allowing
managers to review, re-route, and approve expense reports on the
go at any time.

Adopting a Professional
Services-Focused Solution
When choosing an expense reporting solution, it is important that
professional services organizations take into account more than just a
solution provider’s product set. They must also look at the provider’s
services, experience, and applicability, and compare these factors with
their own professional services requirements.
Below are a few items that professional services should look for when
choosing a solution:
»» Cloud-Based Infrastructure – Because professional services
organizations typically have a more progressive attitude towards
technology, it is important that they carefully consider the
advantages of cloud-based, SaaS technology over on-premise
systems. Not only are cloud solutions more versatile, configurable,
and easier to integrate, they also tend to be a better choice for
small and mid-sized organizations in terms of price range and
scalability.
»» Scalability – The ability to scale a solution to a company’s growing
internal requirements is especially important for professional
services organizations with smaller budgets and more widespread
processes. A company with many locations may not be able to
implement the solution across all areas right away, but with the
right solution, it can move towards more holistic adoption over
time. In addition, many expense reporting solutions offer different
components of their product set separately, allowing professional
services companies to adopt the system at their own pace and in
accordance with their budget.
»» Integration Support – Due to their size and varying business
operations, many professional services companies cannot spare
the time or money for a large-scale software implementation. In
order to keep long-term costs and IT issues down, it is important
that professional services organizations evaluate a solution’s back-
end applicability just as carefully as its front-end functionalities.
That is why these companies should look for a provider that has
extensive implementation support services, and that offers a
solution that is easy to integrate with existing systems. Cloud-based
solutions are also good options for maintaining low IT cost, as they
are updated regularly and maintained by the provider.

»» Professional Services Tools – Beyond the general professional
services-focused tools in many expense reporting solutions,
some providers go a step further and incorporate tools that are
specifically tailored to the industry. For example, some solutions
offer a project-based expense reporting module specifically
designed to support the operations of many professional services
organizations. Companies should discuss all of the available tools
with the solution provider, and determine if that provider is willing
to configure existing tools to fit with the company’s needs.

Conclusion
For professional services organizations, it is important to create
an internal environment for success in expense reporting. This is
accomplished by correcting inefficient processes, controlling spend,
maintaining a progressive attitude towards technology, and supporting
employees—all of which can be achieved by adopting a dynamic
expense reporting tool. With the benefits of automated expense
reporting processes, professional services companies have the
potential to improve not only productivity and company morale, but
also the value of their final services.
The following profile highlights the features of a leading expense
reporting solution provider with years of experience working with
professional services companies.

ImageTag
ImageTag is as a document management and business process
automation solution provider for the mid-market. The company first
offered its ECM solution in 1997, later adding ERP system integration
and workflow automation to its core capture platform, KwikTag. Today,
KwikTag provides ImageTag customers with a holistic system for
managing document processes across their entire organization. The
KwikTag solution includes several advanced workflow tools, known
as KwikApps, for a variety of document management processes
including expense management, accounts payable automation, HR
forms automation, and onboarding management. One KwikApp,
KwikExpense, automates the expense management process by
accelerating receipt capture, automatic expense report creation, and
back-office reconciliation.
Founded 1997
Headquarters Tempe, AZ
Other Locations Tucson, AZ and Fort Lauderdale, FL
Number of Employees 50
Number of Customers 1,000 companies; 120,000+ business users
globally
Target Verticals Healthcare/Insurance, Financial Service,
Manufacturing, Restaurant and Food
Service, Construction, Professional Services,
Sports and Entertainment, Education and
Government, Non-Profit
Partners / Resellers Tribridge, SBS Group, Socius1, RSM
Awards / Recognitions Microsoft Silver Partner, 9 Patents; Microsoft
Partner of the Year Finalist
Solution Overview
KwikTag integrates directly with Microsoft Dynamics GP, NAV, SL, and
AX through ImageTag’s ERP connectors, allowing customers to tag,
view, search for, and retrieve any document that has been captured
by KwikTag from within their own system. The system also integrates
with Microsoft Office and Office 365, enabling users to leverage the
system for collaborative internal activity. The solution’s ERP integration
allows it to automatically create accounting transactions and audit
trails associated with project-based and other professional services
expenses.

The solution is offered on mobile devices through the KwikTag
Anywhere client, a responsive design application. This web-based
interface enables quick and easy expense report approval, rejection,
or delegation—in whole or at the line-item/receipt level. Approvers can
manage, update, or approve expenses from anywhere on any mobile
device.
KwikTag provides security at multiple levels, including user
authentication, site and drawer level permissions, and file-specific
access. All security is maintained through Active Directory-driven
control settings and single sign-on Windows authentication at the user
level. KwikTag’s security measures are compliant with SOX, HIPAA, and
other financial and corporate regulations.
KwikExpense is built on the scalable KwikTag platform, allowing
organizations to automate other critical business processes with the
same system. The solution is specifically designed to support the
business structure of professional services organizations by allowing
them to manage expenses across multiple projects. With KwikExpense,
each set of costs is uniquely mapped to a project by employee or
contractor, and users can easily identify billable and non-billable
expenses as they progress through client engagements.
KwikTag’s document management solution features full OCR data
capture capability, as well as add-on products and services that
perform intelligent capture (Zonal OCR) with auto-learn capabilities.
KwikExpense users can capture travel expenses by snapping pictures
of business receipts with their smartphone and emailing them to
KwikTag, where users can easily match receipt data to corporate
credit card statements. Receipts can also be scanned or uploaded into
KwikTag.
Once expenses are in the system, users can create expense reports
and send them for approval. Corporate expense policies can be
incorporated into the receipt submission process. For example, if
an employee or contractor incurs a hotel expense that exceeds the
allowable limit for the city, a notification is sent to the manager.
KwikTag Workflow allows customers to route reports across many
different departments and roles. The solution supports mobile email
approvals to accelerate the process, as well as automatic escalation
routing. KwikTag enables users to update workflows in real time with
its Workflow Assignment Matrix Management tool. This workflow also
applies to pre-trip approval; users can use KwikTag to send travel
requests to appropriate approvers.

Back-office corporate credit card reconciliation is easy for accounting
professionals, as they can quickly see which receipts are missing by
cardholder, while KwikExpense emails those cardholders reminders
to submit the missing receipts. Expense reports can be completed
for reimbursable expenses in addition to corporate credit cards.
The expense report creation, submission and approval process for
reimbursements is the same. The entire process is visible to all users
and expense management stakeholders, and users can easily view
which expense reports have been paid or are in process, as well as
approval audit trails.
Reporting and Analytics
KwikTag provides visibility into all professional services projects and
their related documentation for additional analysis. All documents and
views are secured at the file and/or user level so that only authorized
users can see the documents relevant to their role.
Implementation and Pricing
The average implementation of the KwikTag solution typically runs
between 2 and 3 months, depending on the customer’s schedule and
availability. ImageTag offers hands-on administrator training and video
tutorials during implementation, as well as hands-on power user
training.
After implementation, customers receive unlimited technical support
via a dedicated US-based support team. They also have access to a
dedicated Technical Account Manager (TAM) and proactive server
maintenance for an additional fee. ImageTag’s pricing structure varies
for on-premise and SaaS implementations.

About PayStream Advisors
PayStream Advisors is a technology research and consulting firm that
improves the way companies plan, evaluate, and select emerging
technologies to achieve their business objectives. PayStream Advisors
assists clients in sorting through the growing complexities of IT
applications related to business process automation with the goal
of making objective, analytical, and actionable recommendations.
Wherever business process automation technology is an issue,
PayStream Advisors is there to help. For more information, call
(704) 523-7357 or visit us on the web at www.paystreamadvisors.com

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