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Winning CFO Approval for Expense Management Automation
- 1. Winning CFO Approvalfor Expense Management Automation October 30, 2018
- 2. 2 Ernie Humphrey Chief ExecutiveOfficer 360 Thought Leadership Consulting 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. Featured Speaker
- 3. 3 About Certify • 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
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- 5. Polling Question 1 a)Pen and paper b) Microsoft Excel/ spreadsheets c) Homegrown solution d) Web-based solution e) ERP/ accounting package (Oracle, SAP, etc.) What methods do you use for managing T&E in your organization?
- 6. 6 Certify Annual TrendsStudy 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.
- 7. 7 Methods for ManagingT&E Reporting 10% 33% 6% 34% 17% 2018 Expense Management Trends Report, Certify, Inc. Pen and Paper Microsoft Excel/Spreadsheets Homegrown Solutions Web-based Solutions ERP/accounting package (Oracle, SAP, etc)
- 8. 8 Finance Remains aManual Affair at Many Businesses 49%Of businesses process expense reports using some form of a manual system
- 9. 9 T&E Systems byCompany Size 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.) SMALL BUSINESS MID-SIZE BUSINESS ENTERPRISE 2018 Expense Management Trends Report, Certify, Inc.
- 10. 10 T&E Systems byCompany Size 36% 35% 13% 4% 11% 39% 18% 3% 8% 32% 28% 42% 13% 5% 12% MANUAL SYSTEMS: 29% enterprise | 60% small businesses 2018 Expense Management Trends Report, Certify, Inc. Web-based solution (Concur, IBM, etc.) Microsoft Excel/spreadsheets Pen and paper Homegrown solution ERP/accounting package (Oracle, SAP, etc.)
- 11. 11 The Manual T&EProcess is Antiquated Unclear policies coupled with: • Paper receipts • Paper expense reports • Manual routing for approvals, audits, and payments Unclear policies cause: • High cost, inefficient process • Inflated travel charges • Noncompliance to laws and regulations • Sets the opportunity for fraud
- 12. 12 While Automation YieldsPositive 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% 2018 Expense Management Trends Report, Certify, Inc.
- 13. 13 So Why AreCompanies 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 biggest reasons: Finance leaders do not know how to convince their CFO that automation is the right choice.
- 14. How to ActivateChange? Understand the Changing Role of the CFO
- 15. 15 The Key Prioritiesof CFOs Today After years of defensive cash management, CFOs are shifting their focus to growth: 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
- 16. 16 But Faster GrowthAlso Brings Challenges CFOs must develop strategies to support growth while: Managing financial complexity Keeping costs in check
- 17. 17 Growth-Minded CFOs NeedTools To: Uncover opportunities to reduce costs Enhance productivity and efficiency company-wide Improve visibility into cash and spending Support strategic decisions Mitigate risk and compliance concerns This is where automation comes in.
- 18. The 5 Strategic Benefitsof Automation
- 19. 1. Uncover Opportunitiesto Reduce Costs
- 20. Top T&E Pressuresto 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 2018 Expense Management Trends Report, Certify, Inc.
- 21. 21 Polling Question 2 a)Under $7 b) $10 - $20 c) $25 or more d) I don’t know How much does it cost in your organization to process one expense report?
- 22. 22 Uncover Opportunities toReduce Costs $6.85 fully automated $17.31 semi-automated $26.63 manual process PayStream Advisors 2017 Industry average cost to process ONE expense report:
- 23. 23 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
- 24. 24 How Automation ReducesCosts 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
- 25. 2. Enhance Productivityand Efficiency Company-Wide
- 26. 26 How Much TimeIs 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
- 27. 27 Enhance Productivity andEfficiency 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
- 28. 28 Calculating Costs andLost Opportunity Time spent per reportX Hourly wage or salary Individual Employee: Sales Representative: = Overhead cost per report Time spent per report÷ Total available selling time = Lost selling opportunity (%)
- 29. 3. Improve Visibilityinto Cash and Spending
- 30. 30 Business Investment inT&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
- 31. 31 How Companies SetT&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% 2018 Expense Management Trends Report, Certify, Inc.
- 32. 32 Visibility is aKey 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 2018 Expense Management Trends Report, Certify, Inc.
- 33. 33 The Benefits ofIntegrating a Web-Based System • Integrating a web-based system with an ERP or general ledger system delivers 360-degree visibility into spending while automating workflows • Integrating a web-based system with a credit card feed provides greater control over spending and faster reconciliation • Automation puts information at the fingertips of CFOs and other cash managers
- 34. 34 Polling Question 3 a)Credit card feed b) ERP c) CRM d) A/P e) General ledger f) Workforce management g) Meeting management What types of data integrations would you want to implement with a web-based expense management system?
- 35. 35 Data Integrations 18% 12% 70% Meeting management (eventplatform) 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.
- 36. 4. Support StrategicDecisions
- 37. 37 The CFO’s Roleis Changing From financial scorekeeper to financial strategist. Automated expense management solutions provide reporting and visibility into data across systems—with instant access to information. This helps CFOs: • Quickly measure spending against budgets • Manage budgeting, planning, and forecasting • Identify historical budget overflows • Align expense management strategies with enterprise objectives
- 38. 38 Granular Data HelpsCFOs • Study spending tendencies by department, employee, expense type, etc. • Identify opportunities for consolidation of suppliers • Equip sourcing teams with the data they need to negotiate contracts • Eliminate delinquencies and late fees Top performing finance organizations spend 20% more time than their peers on data analysis versus data gathering PricewaterhouseCoopers
- 39. 39 Polling Question 4 a)We mainly focus on data gathering b) An equal mix c) We mainly focus on data analysis What percentage of your finance’s teams time is spent in data analysis versus data gathering?
- 40. 5. Mitigate Riskand Compliance Concerns
- 41. 41 T&E Fraud The Associationof Certified Fraud Examiners reports: • Approximately 15 percent of all fraudulent disbursements involve expense reimbursement fraud Most common types of expense reimbursement fraud: • Mischaracterized expenses (disguising personal expenses) • Overstatement of actual expense (altering receipts) • Fictitious expenses (usually counterfeit receipts) • Multiple reimbursements (submitting duplicate reports)
- 42. 42 Risk Mitigation isRacing Up the Agenda of CFOs • Businesses must prove the effectiveness of internal controls and track compliance with complex regulations, such as Sarbanes-Oxley, The Physician Payments Sunshine Act, and IRS guidelines • Automated expense reporting solutions provide instant access to expense data as well as built-in compliance features. • Regular audits of expense reports help businesses pinpoint areas of non- compliance, flag expenses for potential fraud, curb bad behavior, and ensure that expenses meet tax rules.
- 43. 43 Top Expense ManagementPain 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.
- 44. Building a CFO-Centric BusinessCase for Automation
- 45. 45 Next Steps It seemslike a no-brainer; automated expense reporting is more efficient and cost effective than manual systems. Yet companies continue to avoid automation. Use these five benefits to show how automation aligns with the CFO’s objectives to: 1. Uncover opportunities to reduce costs 2. Enhance productivity and efficiency enterprise-wide 3. Improve visibility into cash and spending 4. Support strategic decisions 5. Mitigate risk and compliance concerns And you’ll be able to persuade even the most skeptical of CFOs.
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