Presentation is loading. Please wait.

Presentation is loading. Please wait.

Presented to: Industry Best Practices for T&E Expense Management and Automation April 23, 2013 Pittsburgh AFP David Enick, CTP Assistant Vice President.

Similar presentations


Presentation on theme: "Presented to: Industry Best Practices for T&E Expense Management and Automation April 23, 2013 Pittsburgh AFP David Enick, CTP Assistant Vice President."— Presentation transcript:

1 Presented to: Industry Best Practices for T&E Expense Management and Automation April 23, 2013 Pittsburgh AFP David Enick, CTP Assistant Vice President Treasury Consulting Group

2 2 This presentation was prepared for general information purposes only and is not intended as legal, tax or accounting advice or as a recommendation to engage in any specific transaction, including with respect to any securities of PNC, and does not purport to be comprehensive. Under no circumstances should any information contained in this presentation be used or considered as an offer or commitment, or a solicitation of an offer or commitment, to participate in any particular transaction or strategy. Any reliance upon the presentation is solely and exclusively at your own risk. Please consult your own counsel, accountant or other professional advisor regarding your specific situation. Any opinions expressed in this presentation are subject to change without notice. Standard Disclosure

3 I.T&E Expense Management Trends II.T&E Expense Management Automation Trends III.Bank Offered Expense Management Solutions Agenda 3

4 T&E Expense Management Trends Survey Demographics

5 2012 Institute of Financial Operations Trends in Expense Management Survey Results T&E Expense Management Trends 2012 IOFO and Aberdeen Group Survey Demographics 2012 Aberdeen Group T&E Expense Management Survey Results 5 Source: IOFO 2012 Trends in Expense Management Source: Aberdeen Group 2012 T&E Expense Management

6 6  Please select your company’s total number of employees. T&E Expense Management Trends 2012 IOFO Survey Demographics Source: IOFO 2012 Trends in Expense Management

7 7  Select the number of employees who submit expense reports. T&E Expense Management Trends 2012 IOFO Survey Demographics Source: IOFO 2012 Trends in Expense Management

8 T&E Expense Management Trends Organization

9  Which department has primary responsibility for expense management processing? T&E Expense Management Trends Organization 9  96% of survey respondents report anywhere between zero and four full-time equivalent employees (FTEs) who process expense reports on behalf of the organization  42% of respondents report only one FTE charged with expense reporting responsibilities  Nearly 10% - It appears to be a shared responsibility among various employees, including part-timers Source: IOFO 2012 Trends in Expense Management

10  What percent of total expense reports do you audit?  Nearly half (48.6%) of respondents report auditing between 76 – 100% of Expense Reports T&E Expense Management Trends Organization 10 Source: IOFO 2012 Trends in Expense Management

11  Does your company provide cash advances for travel? T&E Expense Management Trends Organization 11 Source: IOFO 2012 Trends in Expense Management

12  How do you reimburse employees for out-of-pocket expenses? T&E Expense Management Trends Organization 12 Source: IOFO 2012 Trends in Expense Management

13  What is the frequency of employee reimbursements? T&E Expense Management Trends Organization 13 Source: IOFO 2012 Trends in Expense Management

14 T&E Expense Management Trends Policies

15  What is your company’s minimum threshold for receipt requirement?  The IRS requires receipts for all (non per diem) meals and lodging expenses with amounts over $75.  Down from 61% in 2010, 52.5% require receipts for all non per diem reimbursements T&E Expense Management Trends Policies 15 Source: IOFO 2012 Trends in Expense Management

16  How are supporting receipts and related documentation submitted? T&E Expense Management Trends Policies 16 Source: IOFO 2012 Trends in Expense Management

17  Are approvers expected to review receipts as part of the approval process? T&E Expense Management Trends Policies 17 Source: IOFO 2012 Trends in Expense Management

18  Is there a separate policy or exceptions to the standard policy for executives?  75.2% “they must follow the rules just like everyone else — without exception” T&E Expense Management Trends Policies 18 Source: IOFO 2012 Trends in Expense Management

19  Are there restrictions related to booking air travel?  Lowest price coach up from 51% in 2010  Business / First Class policy shifts –Lowest price coach (domestic) / Business or first class (international) down from 15% from 2010 –Business or first class if travel time exceeds set number of hours up from 8% in 2010 T&E Expense Management Trends Policies 19 Source: IOFO 2012 Trends in Expense Management

20  At what rate does your company reimburse for use of personal car?  IRS allowable rate ( cents per mile)  Depending on personal tax situation, an individual may be able to deduct the difference from the company reimbursement and the IRS allowable rate as a business mileage expense T&E Expense Management Trends Policies 20 Source: IOFO 2012 Trends in Expense Management

21  What is the approved class of rental car for non-executive travelers?  What is the approved class of rental car for executive travelers? T&E Expense Management Trends Policies 21 Source: IOFO 2012 Trends in Expense Management

22  What is your travel meal reimbursement policy?  Over 80% of companies pay for all meals while traveling, 29.5% with no limits “go ahead and eat” T&E Expense Management Trends Policies 22 Source: IOFO 2012 Trends in Expense Management

23  What is your lodging reimbursement policy? T&E Expense Management Trends Policies 23 Source: IOFO 2012 Trends in Expense Management

24  What is your policy on frequent traveler or affinity benefits? T&E Expense Management Trends Policies 24 Source: IOFO 2012 Trends in Expense Management

25 T&E Expense Management Trends Travel Management

26  What is the primary type of travel management organization you use? T&E Expense Management Trends Travel Management  Does the company mandate use of the company’s travel management process to make travel reservations and purchase? 26 Source: IOFO 2012 Trends in Expense Management

27  Does your process offer an online booking tool for employee use? T&E Expense Management Trends Travel Management  If yes, which tool provider? 27 Source: IOFO 2012 Trends in Expense Management

28  Do you pre-populate data into the expense reporting system? T&E Expense Management Trends Travel Management  Do you plan to increase integration between the travel management function and the expense management process in the future? 28 Source: IOFO 2012 Trends in Expense Management

29 29  What role does the company travel manager play in expense reporting? T&E Expense Management Trends Travel Management Source: IOFO 2012 Trends in Expense Management

30 T&E Expense Management Automation Trends

31  Please select your primary T&E reporting system T&E Expense Management Automation Trends What are companies doing today? Source: IOFO 2012 Trends in Expense Management 31

32 T&E Expense Management Automation Trends What does “Paper Based” look like?  Expense Management Process –33% of companies use a paper or spreadsheet based expense reporting process  Receipt Management –Submission  41% submit paper receipts –Approvals  88.5% require approvers to review receipts –Record Retention  64.3% store receipts for 7 years or more 32  Expense Report Audits –53% of companies audit 51% - 100% of all expense reports Source: IOFO 2012 Trends in Expense Management

33 Measured Performance T&E Expense Management Automation Trends What Does “Paper Based” Cost to Process? Best In Class  90% compliance to corporate policies concerning T&E  85% business travel spend under management*  $7.91 cost to process a single expense report Average  77% compliance to corporate policies concerning T&E  64% business travel spend under management *  $ cost to process a single expense report Laggards  40% compliance to corporate policies concerning T&E  19% business travel spend under management*  $25.72 cost to process a single expense report Best in Class reflects top 20% of respondents, Average reflects middle 50% and laggards reflect bottom 30% of respondents *Business travel spend under management is defined as the percentage of planned travel spend that is actively managed and accounted for in corporate budgeting / planning / forecasting Source: Aberdeen Group, February 2012 Cost Savings Example  Based on 200 Expense Reports per month  Laggards (Paper Based) –Cost per manual report $25.72 –Annual Cost 200*12*$25.72= –$61,728 Annual Cost  Best in Class (Automated) –Cost per automated report $7.91 –Annual Cost 200*12*$7.91= –$18,984 Annual Cost  Estimated Annual Savings? –Annual savings of $42,744 –69% Savings 33

34  Expense Management Priorities and Challenges / Pressures  Theme? –Reporting and visibility into expenditures T&E Expense Management Automation Trends Selecting an Expense Management Solution Source: Aberdeen Group, February

35 T&E Expense Management Automation Trends Selecting an Expense Management Solution Source: IOFO 2012 Trends in Expense Management  What is the MOST important factor in choosing an expense management solution? 35

36  Which of the following do you utilize in your expense management system?  Ad-hoc management reporting is the most commonly utilized tool in an expense management system – who is using this functionality? T&E Expense Management Automation Trends Selecting an Expense Management Solution 36 Source: IOFO 2012 Trends in Expense Management

37  Which areas use the management information reporting capabilities of your expense management system/process?  What can reporting tools be used for? –Best-in-class organizations are 30% more likely to use analytics to identify ways to save money, such as through negotiated discounts with airlines, hotels, and other travel providers 37 T&E Expense Management Automation Trends Selecting an Expense Management Solution Source: IOFO 2012 Trends in Expense Management

38 2012 Aberdeen Survey Expense Management Technology Roadmap  52% Cloud based SaaS(Software-as-a- Service)  24% Installed Software  21% Mix T&E Expense Management Automation Trends So what are companies planning on doing? 2012 IOFO Survey Planning on making changes to expense management program?  34.4% - Yes 38 Source: IOFO 2012 Trends in Expense Management Source: Aberdeen Group 2012 T&E Expense Management

39 Bank Offered Expense Management Solutions

40 Bank Offered Solutions*  Ease of Use  ERP Integration  Lowest Cost  Corporate Card Integration  Robust Feature Set  Management Reporting  Online Booking Integration  Mobile Device Capabilities All of top factors supported Bank Offered Expense Management Solutions Selecting an Expense Management Solution Source: IOFO 2012 Trends in Expense Management *Not all Bank offered solutions may address each factor  Industry needs vs. bank offered capabilities 40

41  Industry needs vs. bank offered capabilities Bank Offered Expense Management Solutions Selecting an Expense Management Solution 41 Source: IOFO 2012 Trends in Expense Management *Not all Bank offered solutions may address each factor Bank Offered Solutions*  Ad-hoc management reporting  Flexible policy changes  Automated integration with HR system  Level-3 data for hotel folio, etc.  Offline entry capability  Personal card charges pre- populated 5 of top 6 features supported

42 Industry needs vs. bank offered capabilities  Ease of Use –Solutions are generally designed to be user friendly with one click access to features and easy to use but could vary from provider to provider  ERP Integration –Most banks providers have experience in interfacing with major ERP systems such as SAP, Oracle, Lawson, PeopleSoft and JD Edwards  Lowest Cost –Fees may be nominal or no cost compared with other solutions  Corporate Card Integration –Card transactions automatically loaded into most bank card platforms every day  Management Reporting –Robust reporting with access to all card and system data elements commonly supported  Robust Feature Set –Default Charge Code Mapping –Custom Approval Flows –Out of Pocket Transactions –Spend Wizards –Delinquency Management –Complex Tax Estimation –Receipt Management –Complex Policy Integration –Automated Integration with HR System and Chart of Accounts –Level 3 data for hotel folio, etc Bank Offered Expense Management Solutions 42

43  Complex Policy Rule Integration for Card and Cash Expenses  Multiple Policy Triggers can be applied simultaneously to create unique Policy Rules Bank Offered Expense Management Solutions Policy Integration – Policy Rules Transaction Types Card Transactions Cash Expenses Violation Level Policy Levels Amount Triggers Less Than Subject Triggers Supplier Currency Charge Code Segment Charge Code Source Country Home Country Merchant Category Merchant Group Transaction Type Day of Week  Policy Example: –Card Transactions greater than $100 at Office Depot on a Saturday and Coded to Project 2 is a Policy level 1 Violation Card TransactionsGreater Than $100 Supplier - Office Depot Day of Week - Saturday Policy Level 1 Charge Code – Project 2 Greater Than Between 43

44  Policy flags highlight suspected policy violations  Cardholders can enter comments to justify policy violations  Managers will have visibility into policy violations and cardholder comments Bank Offered Expense Management Solutions Policy Integration – Violation Monitoring 44

45 Basic or Complex Approval Routing Bank Offered Expense Management Solutions Approval Routing Rules Transaction Types Card Transactions Cash Expenses Subject Triggers Rule Behavior Amount Triggers Rule Drivers Supplier Currency Charge Code Segment Charge Code Source Country Home Country Merchant Category Merchant Group Transaction Type Day of Week  Approval Rule Example: –Card Transactions greater than $100 and Coded to Project 2 requires an additional approval Card TransactionsGreater Than $100Charge Code – Project 2 Transaction Status – Strictly Coded  Basic Approval Routing –Approval can be simply based in hierarchy  Complex Approval Routing –Multiple levels of approval based on certain criteria and can route to other departments or project managers when their budgets are cross-charged by the cardholder Process Order Dependency Order Approver Grouping Transaction Status Less Than Greater Than Between Rule Grouping 45

46  To ensure adherence to your company’s travel and entertainment (T&E) policy, it’s crucial to conduct audits on a regular basis  Robust reporting options can simplify policy and approval rule audits by focusing on exceptions Bank Offered Expense Management Solutions Policy and Approval Rules – Compliance Audits Perform company wide searches based on custom approval and policy rules Click on violations to drill into details 46

47 4.) Coding automatically assigned /locked Customizable Spend Wizards can simplify and automate assignment of charge codes by focusing on question based expense report allocation Bank Offered Expense Management Solutions Spend Wizards – Simplified Charge Code Allocation 3.)Enter Information 47 2.) Allocate Amounts 1.) Select Spend Wizard 5.) Receipt Images can be attached to transaction

48  Streamline month end reconciliation management with automated reminder alerts and the ability send communications directly to certain groups of users Bank Offered Expense Management Solutions Program Management - Communications Multiple alerts can be set for distribution with multiple trigger and distribution frequency options s can be generated to predefined groups of employees i.e. “Employees with items not submitted”, etc 48

49  Customizable report parameters – user defined filters and output formats  Robust Reporting enables Strong Program Management –Expenditure Analysis  Know what, where, and how your cardholders are spending –Company Administration  Stay on top of month-end reconciliation and approvals –Usage and Monitoring  Identify and correct out-of-compliance spending Bank Offered Expense Management Solutions Interactive Program Reporting 49

50 50 Bank Offered Expense Management Solutions So what can’t they support? Key potential gaps in functionality supported through bank offered expense management card platforms vs. solutions such as Concur or InterplX  Offering of a travel booking system  Robust Mobile Apps –Some bank platforms can offer mobile apps while others may still be in development –However, companies do not consider mobile a decision factor at this point  Automated Out of Pocket Reimbursements to Employees –Bank platforms to not typically support storage of employee bank account information, however, they typically can provide data extracts to clearly identify approved cash out of pocket expenditures by employee  Automated payments to card issuers for Individual Bill/Corporate paid programs –Not applicable for Individual Bill/Pay and Corporate Bill/Pay programs  May support more options for receipt submission (smartphone, fax, scan/upload, , or US Mail) –Bank platforms can typically support fax, scan/upload, and some support smartphone submission  Ease of use –Bank platforms are typically designed to support p-card and T&E cards and features could be weighted more heavily towards p-card vs. T&E card management

51 51  Increased focus on audit and compliance  Fairly tight controls on Airline Booking  Meal reimbursements are fairly less restrictive compared to other expense categories  DO NOT RENT LAMBORGHINI’S - Chances are they will not be approved  Booking integration is not a top priority  A number of companies are still manual and paper based  Companies are planning on migrating to automated solutions  Ease of Use is important! Employee engagement is likely to be much higher if it is easy to use the system  A large amount of paper can be eliminated with receipt imaging  Audit a percentage – focus on the high risks  Leverage your access to reporting to negotiate discounts Summary - Observations

52 Questions?


Download ppt "Presented to: Industry Best Practices for T&E Expense Management and Automation April 23, 2013 Pittsburgh AFP David Enick, CTP Assistant Vice President."

Similar presentations


Ads by Google