quantifying the benefits and roi of effective t&e expense management
TRANSCRIPT
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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
6
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
Certify SpendSmart Report, Q4 2015
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%
Certify SpendSmart Report, Q4 2015
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
Certify Annual Travel & Expense Management Survey 2016
62% of all companies planning to make the switch will do so in the next 12 months
Top Goals for Improving T&E Reporting
Certify Annual Travel & Expense Management Survey 2016
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
Certify Annual Travel & Expense Management Survey 2016
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
Certify Annual Travel & Expense Management Survey 2016
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
g requ
iremen
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?
Certify Annual Travel & Expense Management Survey 2016
48
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QUESTIONS?
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