Uncovering Insights: Using analytics and benchmarks to improve T&E

Uncovering Insights:
Using analytics and benchmarks
to improve T&E
Mark Brousseau
March 25, 2020
Sponsored by:

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Copyright © 2020 IMA® (Institute of Management Accountants). All rights reserved.
2
CPE Credit
Asking Questions
Help
Webinar Features and CPE Credit

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Moderator
Adam Larson, DES
Senior Manager of
Educational Technology Enablement
IMA

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Featured Presenter
Mark Brousseau
President
Brousseau & Associates

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Learning Objectives
1. Apply specific tactics to leverage spend data and
achieve smarter growth.
2. Give examples of ways to increase the visibility—
and value— from your T&E spending.
3. Recognize the current state of the T&E industry and
emerging trends that could impact your organization.

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About Certify
• Integrated, automated solutions for travel, expense,
accounts payable invoice, and purchasing
• 64 languages, 140+ currencies, clients in 80 countries
• Rated #1 by G2 for user experience in expense
management software (2014-2019) and Momentum
Grid leader (2018)
• PC Magazine Editors’ Choice for best expense tracking
software (2015-2019)
• Recognized as a Leader in the IDC MarketScape for
Worldwide Travel and Expense Management Software
• Processing expenses valued at over $5.1 billion annually

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Our Agenda
1. The dynamism of travel and expense—and why it matters
2. Key findings from Certify’s 2019 Travel and Expense Management Trends Report
3. T&E management and controlling spend
4. The art of leveraging industry benchmarks
5. Recommendations for improving T&E management

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Before COVID-19, in-person meetings were
the gold standard:
• Customer relationships
• Supplier relationships
• Professional development for employees
T&E Spending is Changing

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The Scale of T&E
90%
of all business travel generated in North
America ($304 billion) was spent on
domestic U.S. trips in 2018
$1.41 trillion
spent globally on business travel
activity in 2018
$338.3 billion
spent on business travel in
North America in 2018
Source: GBTA BTI™ Outlook – Annual Global Report & Forecast 2019

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Now, organizations must adapt quickly and
move critical functions online so that business
can continue without requiring employees to be
in the office.

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Companies maintain business continuity by investing in:
• Home office equipment, supplies, and monthly expenses
• Software for hosting virtual conferences
• Tools to replace in-person collaboration and meetings
• Solutions to digitize paper-based processes

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Empowering employees to spend wisely
provides a sense of stability that allows them to
continue achieving their goals—even as
everything is changing.
Stability Matters

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As employees shift to working from home,
how can we improve control, efficiency, and
visibility into company-related spending?

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Invest in T&E Done Right
An effective T&E reporting process:
• Lowers expense report processing costs companywide
• Increases the productivity of every employee
• Maximizes the productivity of managers, accountants, and finance staff
• Improves visibility into spending and working capital management
• Adds stability and continuity while transitioning to work from home
• Impacts top- and bottom-line revenue continuously

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The Hidden Costs of Expense Management
Common costly frustrations:
• Hours to create, review, and approve reports
• Hard costs for paper, printing, and postage
• Time required for reconciliation and
reimbursement
• Storage fees to archive expense reports
• Lost productivity and lost opportunity
• Lack of control and visibility into T&E
spending

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a) Under $10
b) $11-$20
c) $21-$30
d) $31 or more
e) We do not track these costs
Polling Question 1
How much does it cost to process a single expense
report at your organization?

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Polling Question 1 Results (Placeholder)

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Effective T&E management empowers
employees to spend wisely while increasing
visibility and control for finance.

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2019 T&E Management Trends Report
• Survey of hundreds of finance professionals outside of
Certify’s customer base
• The resulting report—now in its seventh year—offers
insights, concerns, and areas of focus for travel and
expense management
• Used by industry publications to identify trends and
benchmarks
• Reveals how companies use technology to improve
T&E management
2019 Travel & Expense Management Trends Report, Certify, Inc.

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About the Research
37%
44%
19%
Manager, controller, or accountant
Other (accounting staff, consultant,
administrative, etc.)
Director-level or above with expense
reporting responsibility (CEO, CFO, etc.)
Company Size
Enterprise: More than 1,000 employees
Mid-Market: 101-999 employees
Small Business: Less than 100 employees
23%
40%
37%
585 Finance professionals surveyed from
outside the Certify customer base

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Areas of T&E Management: Most Critical to Improve
Expense
management
process efficiency
Transparency /
visibility / reporting
related to spend
Corporate travel
policy compliance
Audit and reporting Travel booking
25%
14%
12% 11% 11%

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Top Three Areas for Improvement
Policy
Compliance
Visibility of
T&E Spend
Efficiency for
T&E Management

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Controlling T&E Spend: A Formal T&E Policy
Do you have a T&E policy in place?
72%
21%
7%
Yes
No
I don’t know

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Controlling T&E Spend: T&E Policy IQ
72% of companies have a formal T&E policy in place.
But 58% of respondents report
that their travelers’ understanding
of their T&E policy is, at best,
“decent—but in need of
improvement”.

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Controlling T&E Spend: T&E Policy Compliance
How does your company enforce its travel and expense policy?
29%
27%
19%
17%
5%
3%
Manually check each
expense
Our T&E system
automatically flags
out of policy
expenses
Responsibility of
employees
Manually, only
reviewing expenses
with a high value
Our T&E policy is not
enforced
I don't know

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Controlling T&E Spend: Policy Compliance
What percentage of submitted expenses are within policy?
22%
54%
16%
3%
5%
0 – 24%
25% – 49%
50% – 74%
75% – 100%
I am not sure

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46% of organizations report less
than a 75% rate of compliance with
their T&E policy.
26% of enterprise-sized organization
do not know what percentage of
submitted expenses are T&E policy
compliant.

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Craziest Expenses Survey, 2019

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T&E Policy: The Foundation of Control
An effective corporate travel policy:
• Is clear and simple to follow for all employees
• Is up-to-date with rules, partners, and discounts
• Manages the average user within the organization
• Allows for reasonable accommodations
• Contains clear explanations for limits and restrictions
• Considers travel vendors with discounts and preferred pricing
• Enforces legal compliance with IRS standards and other regulations

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Controlling T&E Spend: The Budget
How does your organization set T&E policy category amounts
or maximums for meals, hotel, and airfare?
28%
25% 25%
13%
9%
0%
5%
10%
15%
20%
25%
30%
Follow US GSA per diem
rates
Based on internal
historical spending trends
Determined by annual
budgeting process
We do not have policy
maximums
Other

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a) We follow U.S. GSA per diem rate guidelines
b) Determined by annual budgeting process
c) Budget based on company historical spending
d) We do not have expense category limits
e) Other/I don’t know
Polling Question 2
How does your organization currently set its T&E budget?

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Improve corporate spending
using industry benchmarks.

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The Art of Leveraging Benchmarks
Focus on what matters
Continually verify what matters
Compare “apples to apples”
Compare data over time
Compare data across industries
The magnitude of trends
The direction of trends
The driver of trends

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Highlights from the 2019 SpendSmart™
T&E Benchmarks Report.

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About SpendSmart™
The SpendSmart Year in Review Report tracks T&E spending
benchmarks drawn from more than $5.1B in expense
transactions processed by Certify in 2019.

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T&E Category Benchmarks
T&E Category Benchmark
Averages in 2019
Percentage of total annual
T&E transactions by expense
category based on more than
$5.1B in transactions processed
by the Certify system in 2019.
Certify SpendSmart™ Year-in-Review Report, 2019

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Expense Category Averages
How the T&E budget was spent according to our 2019 SpendSmart Year in Review Report

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a) Amazon
b) Delta
c) Marriott
d) Starbucks
e) Uber
Polling Question 3
What was the most expensed brand of 2019?

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SpendSmart™ Benchmarks
Most expensed brands overall for 2019
13% 4%4%5%

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Most expensed brands by category for 2019
MEALS HOTEL CAR RENTAL AIRLINE
24% 17% 37% 26%
SpendSmart™ Benchmarks

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Scooters Zip Into Expense Reports
50% 42% 4%
$6.88
Average Cost
Per Rental
$10.28
Average Cost
Per Rental
$8.83
Average Cost
Per Rental

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T&E Benchmark Calculator
https://www.certify.com/benchmarkquiz.aspx

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Gain even more value from your
T&E spending with analytics.

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Recommendations for Improving Spend
Put your data
to good use
Invest in process
improvement
Stay on top
of industry trends

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Utilize T&E data for:
Cashflow management and forecasting
• How quickly can finance access—and act on—
expense data?
• Do they have the level of visibility they need to
inform strategy?
Expense trends and vendor negotiations
• Where do you spend the most?
• Are you buying the same product from multiple
sources? Is a spend category growing?
Budget allocation and usage
• Are any departments under- or over-spending?
• Are travelers spending within an appropriate
range for their role in the company?
Improving policy compliance
• How many expenses are within policy?
• Do you have a high occurrence of
exceptions—and what is the root cause?
Recommendations for Improving Spend

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Unleash Your Data
Set aside time to review your expense metrics and analytics
against industry benchmarks.
• How can we make expense management efficient and effective?
• Do our expense benchmarks align with industry averages?
• Has our spending behavior changed?
• Should we update our travel policy?

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How can we make expense management efficient and effective?
• Identify the average cost to process a single expense report from end-to-end
• Discover how many reports have errors or exceptions—and the cost to fix them
• Learn which travelers and departments are spending within policy
Unleash Your Data

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Unleash Your Data

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Has our spending behavior changed, and should we update
our travel policy?
• Identify top expense categories, average costs, and vendors
• Improve traveler’s usage of preferred vendors and discount programs
• Optimize T&E budgets by company, location, department, or traveler
Unleash Your Data

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Invest in Improving Processes Using Data
Discuss additional challenges or bottlenecks
in finance and potential improvements like:
• Integrating data from additional business systems to
get a wider view of company spending
• Moving to a dedicated travel, invoice, or AP platform
to control costs, increase spend visibility, and improve
productivity and satisfaction
• Lowering reimbursement times and transfer or
FOREX fees with an alternative payment provider

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a) Non-existent
b) Minimal at best
c) Okay, but we have major blind spots
d) Good, but we could do better
e) Ideal, we have near real-time visibility
Polling Question 4
How would you describe the level of visibility your
company has relative to T&E spend?

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Closing Thoughts and
Additional Resources

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Closing Thoughts
• Visibility into T&E processes and spend is critical for T&E management
• Leveraging benchmarks is a valuable tool in managing and improving
T&E management
• An effective T&E policy is a key pillar of T&E done right—and should
adapt with the industry and business climate
• The right technology combined with employee education reduce risk
while driving T&E policy compliance

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Additional Resources
2019 SpendSmart™ Year-in-Review Report & Infographic:
http://www.certify.com/CertifySpendSmartReport.aspx
SpendSmart™ Benchmark Calculator:
https://www.certify.com/benchmarkquiz.aspx
2019 Expense Management Trends Report:
https://www.certify.com/2019-Travel-Expense-Management-Trends-Report.aspx
Five Years of The Craziest Expenses:
https://www.certify.com/the-craziest-expenses-survey-the-best-of-2013-2018.aspx

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Questions & Answers
Use the Q & A Panel to send your questions to our panelists.
Mark Brousseau
President
Adam Larson, DES
Senior Manager of Educational
Technology Enablement
IMA

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Thank You to Our Presenter!
Mark Brousseau
President

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