quantifying the benefits and roi of effective t&e expense management

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Quantifying the Benefits and ROI of EffectiveT&E Expense Management

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Learning Objectives

Today’s presentation will cover:

• Projecting the ROI of business travel and T&E spending

• Budget guidelines and industry average spending benchmarks

• Expense reporting’s hidden costs and opportunities for improvement

• Five T&E strategies to remove friction and foster company growth

• Quantifying the benefits and ROI of T&E automation

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Mark BrousseauPresident/Owner

Brousseau & Associates

Today’s Presenter

Robert NeveuPresident and Co-Founder

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Featured Speaker

Agenda

• 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 over 30 million expense transactions and $10+ billion in expense reports for 2015

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PROJECTING THE ROI OF BUSINESS TRAVEL AND T&E SPENDING

The ROI of Business Travel

• For every dollar invested in business travel, U.S. companies generated $9.50 in revenue and $2.90 in profit

• Comprehensive 18-year econometric analysis across 14 industries by Oxford Economics USA and U.S. Travel Association

Series131%

21%13%

11%

10%

7%7%

Business Travel Purpose and Outcomes

The Value of Business Travel: The travelers’ perspective, Carlson Wagonlit Travel, 2014

Purpose of business travel:

Client/Prospect Meeting

Team-related Meeting

Training & Development

Event Conferences & Fairs

Operations & Quality Control

Innovation and R&D

Supplier Meeting

21%

15%

13%11%

8%

7%

7%

6%5%

4%3%

Business Travel Purpose and Outcomes

The Value of Business Travel: The travelers’ perspective, Carlson Wagonlit Travel, 2014

Reported outcomes:Business Development

Client Service Delivery

Increased Collaboration

Strategic Alignment

Innovation

Quality Control

People Development

Employee Engagement

Self-development

Networking

Other

Executive Perspective on the ROI of T&E

The Return on Investment of U.S. Business Travel, Oxford Economics/U.S. Travel Association, 2009

What does business travel mean for your bottom line?

Trip Type % Of Travel Budget(Average)

Return on $1 of Investment(Median of Responses)

Customer Meetings 34% $15 - 19.99

Conferences 10% $4 – 5.99

Trade Shows 10% $4 – 5.99

Incentives 5% $4+

All Other 42% N/A

Polling Question 1

a) Under $10 b) Between $10 and $15 c) $20 or mored) Not applicable

For every dollar your company spends on T&E, what is your estimated ROI?

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What’s the right level of T&E spending for my company?

$310b

T&E Spending Around the World

$1.25tglobal business travel

spending 2015

Global Business Travel Association 2015

U.S. business travel spending 2015

Average Base Cost Per Trip

Travel Leaders Corporate 2015

Average business trip cost for air, hotel and car rental:

INTERNATIONAL DOMESTIC

$2,502 $1,002

U.S. Business Travel Modalities

74%under 250 miles

from home office

48%involves a

personal vehicle

31%require

air travel

U.S. Travel Association 2015

Of the 1.3 million domestic business trips made daily:

Business Investment in T&E

8-12%total annual budget

for T&E expenses(Aberdeen Group 2015)

PayStream Advisors 2016

Company Revenue Average Annual Travel Spend

Less than $100 million ~ $700,000

$100 million to $500 million ~ $1,500,00

$501 million to $2 billion ~ $7,400,000

Greater than $2 billion ~ $58,000,000

1. Meals 19%

2. Airfare 17%

3. Misc. 17%

4. Lodging 14%

5. Gas 11%

6. Cell phone 5%

7. Car rental 5%

8. Groceries 5%

9. Supplies 5%

10. Taxi 3%

11. Shipping 2%

12. Tolls 1%

13. Parking 1%

Certify SpendSmart Report, Q4 2015

How the Expense Budget is Spent

$98.75DAILYMEAL COST

2016


2016 Business Travel News Corporate Travel Index

How the Expense Budget is Spent

1. Meals 19%

2. Airfare 17%

3. Misc. 17%

4. Lodging 14%

5. Gas 11%

6. Cell phone 5%

7. Car rental 5%

8. Groceries 5%

9. Supplies 5%

10. Taxi 3%

11. Shipping 2%

12. Tolls 1%

13. Parking 1%

Benchmark Spending by Category

Category 2014 2015 Difference

Gas $40.41 $30.32 –24.96%

Airfare $345.21 $274.00 –20.62%

Lodging $213.90 $223.45 +4.64%

Car Rental $193.58 $186.45 –3.68%

Cell Phone $89.30 $92.24 +3.29%

Meals $25.67 $26.06 +1.52%

Parking $32.70 $32.23 –1.43%

Taxi $31.81 $31.82 +0.03%


T&E spending ranks as the second most difficult operating expense category to control Forrester Research 2015

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How are companies successfully managing the T&E investment?

Polling Question 2

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 spending?

T&E Expense Systems Used

Consistent mix of expense management systems in use over time:

Certify Annual Travel & Expense Management Survey 2013-2016

Expense Reporting’s Hidden Costs

$6.85fully automated

$17.31 semi-automated

$26.63 manual

PayStream Advisors 2015

• Man 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

Calculating Cost and Lost Opportunity

Time spentper reportXHourly wage

or salary

Individual Employee:

Sales Representative:

= Overhead costper report

Time spentper report÷Total available

selling time = Lost sellingopportunity (%)

Current T&E System by Company Size

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

MANUAL SYSTEMS: 70% small businesses, 26% enterprise

22%

55%

10%

5%8%

37%

37%

9%

4%

13%

46%

16%

4%

6%

28%

SMALLBUSINESS

MID-SIZEBUSINESS ENTERPRISE

Certify Annual Travel & Expense Management Survey 2016

Expense Technology Migration

37%SMALL

BUSINESS

46%MIDSIZED

COMPANIES

53%ENTERPRISE


62% of all companies planning to make the switch will do so in the next 12 months

Top Goals for Improving T&E Reporting


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

25%

28%

32%

40%

66%

T&E Policy Compliance

73%85%of all companies report having a

written T&E policy in place

of those companies are manually reviewing

for policy violations

Manual policy review is inefficient, prone to error and fraud


Businesses under 100 employees have a 28% higher median fraud loss than those with 100+Association of Certified Fraud Examiners 2015

Polling Question 3

a) We have no formal T&E policy b) Manual review processc) Automated system that flags violationsd) Policy is not enforced

How does your organization enforce compliance with T&E policies?

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FIVE T&E STRATEGIES TO REMOVE FRICTION AND FOSTER GROWTH

#1 Policy: Make Enforcement Automatic

• Set hard/soft policy controls: apply spending caps, reporting requirements (meal attendees, receipts, etc.), vendor preferences, and more

• Eliminate duplicate receipts/expenses: automatic system reviews identify duplicate expenses, flag out-of-policy expenses, reduce fraud, and save money

• Manage expense reporting on time: set a schedule to automatically build reports, notify employees and managers, and submit expenses (specific to Certify)

Flagged violation, notifying manager amount exceeded policy limit

For the average company, an estimated 20% of total T&E spend is considered out of policyAberdeen Group 2014

#2 Mobile: Make it 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:

Mobile T&E reporting reduces processing costs 65%, delivers quicker report approval and reimbursement times

Aberdeen Group 2014

#3 Travel: Control Cost Before it’s Expensed

Pre-Trip Approval:Requires authorization prior to booking;

configured by employee, policy, etc.

Lowest Logical Fare:Automatically identifies best available

rates for proposed itinerary

$

• Category spending limits (i.e. amount not to exceed)

• Preferred travel vendors for air, hotel and car rental

• Acceptable classes of service for flights

Controllable costs via integrated travel booking:• Advance purchase and connecting flight

requirements

• Ancillary fees (upgrades, boarding, airline clubs, etc.)

• Changing or cancelling flights

Companies that track and apply unused tickets can save 5-8% of total annual travel budget

2015 GBTA Ancillary Fee Handbook

#4 Integrations: The Key to 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

T&E automation increases employee productivity 29% via reduced data entry, mobile tools and other timesaving efficiencies Aberdeen Group 2014

#5 Reporting: Can’t Control What You Can’t See

• Spending: analyze company spend by expense category, department, individual employee, monthly reimbursements, etc.

• Compliance: review processed and in-progress reports, policy violations, identify risk and offenders, and improve policy compliance rates

• Workflow: monitor people and process; documented path of approvals ensure expenses are reviewed/approved according to guidelines

Lack of visibility into spending is the top T&E improvement goal for 51% of companies

Aberdeen Group 2014

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QUANTIFYING THE BENEFITS AND ROI OF T&E AUTOMATION

Automation Gets Results

Automation Drives ROI


Businesses of every size are quickly realizing ROI:

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Impr

oved

effic

iency

/expen

se re

portin

g pro

cess

Reducti

on in

proce

ssing

costs

(less

paper

, pos

tage,

stora

ge etc.

)

Mobile

acces

sibilit

y

Increas

ed emplo

yee p

rodu

ctivit

y

Elimina

tion of

paymen

t for d

uplica

te ex

pens

es

Reducti

on in

over

head

/staffin

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ts

58%53%

33%26% 22% 22%

How ROI is Achieved

What are the ways you’ve achieved ROI on your automated expense management system?


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QUESTIONS?

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