2017 travel and entertainment expense management trends: eliminating inefficiency, controlling costs

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2017 T&E Expense Management Trends:Eliminating Inefficiency, Controlling Costs

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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

Mark BrousseauPresident and Owner

Brousseau & Associates

Today’s Presenter

Featured Speaker

5

Robert NeveuCEO and Co-founder

• 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

Certify Annual Trends Study 2017

600+ accounting professionals from outside the Certify customer base:

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Inefficiencies in T&E Expense Reporting

Expense Reporting Inefficiencies

Expense Reporting Around the World: Practices, Pain Points, and Productivity, GBTA, 2015

9

up tominutes to complete one expense report

minutes to correct expense reports errors

average number of reports with errors

23 15-22

22%

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

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

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

2014 2015 2016 2017

44

3735

37

2932

3734

57

5 64 4

86

18 1915

17

Methods for Managing T&E Reporting

Consistent mix of expense management systems:

Certify Annual Expense Management Trends Report 2017

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Cloud/web-based

Excel spreadsheets

ERP system

Homegrown solution

Pen and paper

SMALLBUSINESS

MID-SIZEBUSINESS ENTERPRISE

33%

37%

8%

6%

16%

56%

10%

2%

8%

24%24%

55%

7%2%

12%

Web-based solution (Concur, IBM, etc.)Microsoft Excel/spreadsheetsPen and paperHomegrown solutionERP/accounting package (Oracle, SAP, etc.)

T&E Systems by Company Size

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56%

10%

2%

8%

24%

SMALLBUSINESS

MID-SIZEBUSINESS ENTERPRISE

24%

55%

7%2%

12%

33%

37%

8%

6%

16%

Web-based solution (Concur, IBM, etc.)Microsoft Excel/spreadsheetsPen and paperHomegrown solutionERP/accounting package (Oracle, SAP, etc.)

T&E Systems by Company Size

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AUTOMATED SYSTEMS: 80% enterprise • 36% small businesses


Polling Question 1

a) Paper-based/spreadsheetsb) 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?

The #1 reason companies turn to automation: simplifying expense reporting process for employees and managers (59%)Certify Annual Expense Management Trends Report 2017

Leading frustrations for T&E program administrators:

Top Expense Management Pain Points

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Certify Annual Expense Management Trends Report 2015-2017

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%

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

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Cost to Process a Single Expense Report

$6.85fully 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

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T&E Policy Compliance

79%of all companies report

having a writtenT&E policy in place

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75%manually review each expense report report

for policy violations

0%5%

10%15%20%25%30%35%40%45%

7%

39% 41%

15%26%

Policy Enforcement Practices (all companies)

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An estimated 20% of a total T&E spend is considered out of policy for the average companyAberdeen Group 2012

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

0% 10% 20% 30% 40% 50% 60% 70%

27%

27%

30%

40%

59%

Driving Force Behind T&E Automation

Certify Annual Travel & Expense Management Survey 2017

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Who’s Turning to T&E Automation?


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27%of all companies planning to make the switch will do so in the next 12 months

Polling Question 2

a) Reducing process and workflow inefficiencies b) Tighter controls for employee T&E spendingc) Lowering expense report processing costsd) Increasing travel policy compliance

What is your organization’s top area for T&E improvement in the year ahead?

Benchmark Averages for T&E Expense Spending

T&E spending ranks as the 2nd most difficult operating expense category to control Forrester Research 2014

T&E Spending by U.S. Companies

1. Global Business Travel Association 2016

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$293.1b 2017 travel and entertainment

spending by U.S. companies

+ 3.8% from the

previous year

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

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

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Meals

Airfare

LodgingMisc.

Gas

Taxi

Cell Phone

Car Rental

SuppliesShipping 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%

How the Expense Budget is Spent

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Meals

Airfare

LodgingMisc.

Gas

Taxi

Cell Phone

Car Rental

SuppliesShipping Tolls Parking

$98.74DAILYMEAL COST

2016

Certify SpendSmart Report, Q4 2016

2016 Business Travel News Corporate Travel Index

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

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www.gsa.gov, accessed 1/30/17

2017 U.S. GSA Per Diem Rates

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GSA Lodging, Meals & Incidentals for San Francisco, CA

Lodging (per night) Breakfast Lunch Dinner

$267 $17 $18 $31Incidental -- $5 $5 $5

http://www.gsa.gov/


Budgeting & Category Spending Caps

35

We do not have expense category limits

26%

Based on internal historical spending

23%Follow U.S. GSA per rate

guidelines23%

Determined by annual budgeting process

21%

Other7%

Polling Question 3

a) Mealsb) Mileagec) Airfared) Not sure

As a percent of total spending, what was your company’s largest expense category in 2016?

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 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.

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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

97% of business travelers carry at least one mobile device; 80% used their smartphone to plan or book corporate travel in 2014Expedia/Egencia Mobile Index 2014

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)

$

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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), 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

Building company travel policy into T&E expense reporting software has been shown to improve compliance rates as much as 44%Aberdeen Group 2013

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

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 roadblocks

Compliance: review processed and in-progress reports, policy violations, fraudulent behavior

Spending: analyze by expense category, mileage, department, employee, and more

Improving visibility into spend is a driving force behind the switch to automation for 30% of companiesCertify Annual Expense Management Trends Report 2017

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