Trends in T&E Expense Management: Results of the 2012 T&E Survey conducted by IAPP

Chuck Buckner

President & CEO InterplX Expense Management

About InterplX Expense Management

§  Established in 1994 §  Focused solely on Employee Expense Mgmt. §  Business Process Outsourcer (SaaS plus services) §  SSAE 16 (SOC 1 Type II) & 7 prior SAS-70 audits §  $1.1 billion in expenses processed last year §  1,000,000 expense statements per year §  26 million pages imaged §  50,000 client employees supported §  100% referenceable client base

Some of Our Clients

The IAPP T&E Survey

n  130 Respondents

n  Even size distribution from under $50 Million to over $10 Billion revenues

n  Even industry distribution (largest industry: Mfg – 17%)

n  Conducted by IAPP research team

n  Winter 2011/2012

Today’s Agenda n  Survey Demographics

n  Policy Questions

n  Funding/Payment Methods

n  Travel Management

n  Process Trends

n  Recap/Recommendations

Survey Demographics

Demographics: Responding Companies

8%

2%

11%

4%

6%

6%

17%

11%

6%

3%

1%

10%

3%

2%

2%

2%

5%

15% 21%

12%

13%

21%

11%

7% 11.6%

0.8% 2.5%

0.8%

8.3%

5.8%

28.1%

11.6%

5.0%

3.3%

1.7% 7.4%

1.7%

3.3% 0.0% 5.0% 3.3%

Industry Banking/Financial Services

Construction

Education

Food and Beverage

Government

Insurance

Manufacturing

Medical/Dental/Healthcare

Not-for-Profit

Pharmaceuticals

Real Estate

Retail

Service

Software

Telecom

Transportation

Utilities/Communication

12.3%

23.8%

8.5%

13.1%

26.9%

6.2%

9.2%

Annual Revenue

Less than $50 million

$50 million to $250 million

$250 million to $500 million

$500 million to $1 billion

$1 billion to $5 billion

$5 billion to $10 billion

Greater than $10 billion

8%

2%

11%

4%

6%

6%

17%

11%

6%

3%

1%

10%

3%

2%

2%

2%

5%

15% 21%

12%

13%

21%

11%

7%

13.5%

26.2%

29.1%

19.9%

5.0%

2.1% 4.3%

Total Number of Employees.

Less than 250

251 to 1000

1001 to 5000

5001 to 25,000

25,001 to 50,000

50,001 to 100,000

More than 100,000

Demographics: Responding Companies

8%

2%

11%

4%

6%

6%

17%

11%

6%

3%

1%

10%

3%

2%

2%

2%

5%

15% 21%

12%

13%

21%

11%

7%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Under $1 million

$1 million to

$5 million

$5 million to

$20 million

$20 million to

$100 million

Over $100

million

44.4%

28.7%

13.9%

9.3%

3.7%

Annual T&E Budget.

Demographics: Responding Companies

Policy Questions

Policy: Minimum Thresholds for Receipts

Receipt policies are relaxing somewhat vs. 2010

Comparison 2010 2012 +/- •  All Expenses 61% 53% -8% •  > $25 28% 32% +4% •  > $50 2% 4% +2% •  > $75 9% 11% +2%

Policy: Mileage Reimbursement Rate

1%

74%

11%

9%

1%

4%

75% use the IRS rate – Same as 2010 survey

Policy: Airfare Policies

Most companies want maximal control of air spend. 2010 Lowest fare was 51% (vs. 61%) and No restrictions was 12%

(vs. 5%)

Policy: Rental Car Policies

No change from 2010 16% allow executives to rent full-sized cars.

3.4%

43.8%

49.4%

3.4% 0.0%

What is the approved class of rental car for non-executive travelers?

Sub-compact

Compact

Intermediate/Mid-size

Full Size

Luxury

Policy: Meal Reimbursement Policy

Most companies pay reasonable meal expenses. Up 10% from 2010.

Policy: Lodging Reimbursement Policy

Almost no per diem for lodging. Actual with no limits up 10% Y/Y.

Policy: Audit Practices

Funding/Payment Methods

Funding: Cash Advances

Companies still give out cash advances, at least under certain circumstances.

Funding: Corporate Cards

Funding: Corporate Cards

Funding: Corporate Cards

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

AP Check AP via ACH

Attach to Payroll Outside provider pays

25.3%

39.4%

21.2%

14.1%

For out-of-pocket expenses

AP Check AP via ACH Attach to Payroll Outside provider pays

Funding: Reimbursement Method

20.8%

13.2%

38.7%

10.4%

4.7%

12.3%

What is the frequency of employee reimbursements?

Daily

Twice a week

Weekly

Every two weeks

Semi-monthly

Monthly

Funding: Reimbursement Frequency

Travel Management

Travel Management: Travel Manager Involvement

Travel Management: Travel Management Co. (TMC)?

63% use some form of travel management company (TMC); similar to 2010

Travel Management: Travel Management Mandated?

Travel Management: Online Booking Tool

Travel Management: Travel Booking Mandated?

31.8%

3.6% 18.2%

39.1%

7.3%

Does your company require pre-travel authorizations?

Yes as part of the reservation process

Yes as part of the expense reporting process

Yes as part of both processes

No

Does not apply

Travel Management: Travel Agency?

Travel Management: Reservation Data Feed?

Travel Management: Increasing Integration

Process Trends

Process Trends: Expense Management System

Process Trends: Expense Management System

Process Trends: Expense Management System

Process Trends: Expense Management System

Industry Trends

q  Increased focus on audit and compliance q Ease of use is still the key factor   q Paperless is the norm q Focus on Service as much as Software q Market reaching maturity - churn q Mobile platforms growing but slowly

q Especially for time-sensitive activities like approval q Not useful for data entry heavy activities

q Corporate cards are an accepted best practice and integrate well with expense management systems

q Booking integration is not for everyone

Recommendations n  Automate the Expense Reporting Process n  Integrate a Corporate Card with rebate n  Eliminate paper with receipt imaging n  Audit a percentage – focus on the high risks n  Pay electronically n  Make it fast and easy for users n  Be smart about the data you want to analyze

Thank You! IAPP-IARP-NAPP-TAWPI members can access a free copy

of this study in the Resource Center of the IAPP Web site.