travel and entertainment expense management trends for 2016
TRANSCRIPT
The webinar will begin shortly. You will hear silence until the webinar begins.
Audio is provided through your computer speakers only.If you are unable to hear the audio through your computer speakers, simply click on the phone icon above the chat window to receive teleconference information.
Technical Support Problems for this Webinar: Email: [email protected]
Travel and Entertainment Expense Management Trends for 2016
Tips for using WebEx • Receiving Teleconference Info
• The chat box (asking questions/tech issues)
Housekeeping• Handouts
• This program will be recorded
• T&E expense spending benchmarks by category and average amount
• Common expense management headaches and expected benefits
• The factors and estimated costs to process an individual expense report
• Types of systems and processes currently used for expense management
• What it takes to achieve a return on investment with a new system
After attending this event you will understand:
Learning Objectives
Robert NeveuPresident and Co-founder
Certify
Mark BrousseauPresident and Owner
Brousseau & Associates
Featured Speakers
T&E Spending Trends
T&E Spending is Substantial
$1.25tU.S. business travel
spending 2015(estimate: GBTA 2015)
$310bglobal business travel
spending 2015
INTERNATIONAL DOMESTIC
$2,502 $1,002
Average base cost per business trip for air, hotel and car rental(Travel Leaders Corporate 2015)
25% of all U.S. companies spend $1 million or more on
annual T&E expenses (PayStream Advisors 2015)
Series1
of total annual budget for T&E(Aberdeen Group 2014)
10-12%Business Investment in T&E
MEALS
AIRFARE
MISC.LODGING
GAS
CELL PHONE
CAR RENTAL
GROCERIES
SUPPLIESTAXI
TOLLSSHIPPING
PARKING
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%
How the Expense Budget is Spent
Reference: Certify’s SpendSmart Report, Q4 2015
Category 2014 2015 DifferenceMeals $25.67 $26.06 +1.52%Airfare $345.21 $274.00 –20.62%Lodging $213.90 $223.45 +4.64%Car Rental $193.58 $186.45 –3.68%Taxi $31.81 $31.82 +0.03%Gas $40.41 $30.32 –24.96%Parking $32.70 $32.23 – 1.43%Cell Phone $89.30 $92.24 +3.29%
Category 2014 2015 DifferenceMeals $25.67 $26.06 +1.52%Airfare $345.21 $274.00 –20.62%Lodging $213.90 $223.45 +4.64%Car Rental $193.58 $186.45 –3.68%Taxi $31.81 $31.82 +0.03%Gas $40.41 $30.32 –24.96%Parking $32.70 $32.23 – 1.43%Cell Phone $89.30 $92.24 +3.29%
Benchmark Spending by Category
Reference: Certify’s SpendSmart Report, 2014-2015
Meal Category Average Expense 2015 GSA Per Diem Tier 1
Breakfast $12.33 $17
Lunch $21.56 $18
Dinner $25.06 $34
Total Per Day $58.95 $74*
*includes $5 for incidental expenses
Reference: Certify’s SpendSmart report, Q4 2015 | gsa.gov/portal/content/101518
Benchmark Spending for Meals
Total Respondents: 508 companies (non-Certify clients)
Audience: • 24% Small business: less than 100 employees• 49% Mid-sized business: 101 – 999 employees• 27% Large business: 1,000+ employees
Demographics:• 46% Director-level or above with expense reporting responsibility (CEO,
CFO, etc.)• 45% Manager, controller or accountant• 9% Other (accounting staff, consultant, administrative, etc.)
Fourth Annual Expense Management Trends SurveyConducted in December 2015
About the Data
Expense Category Spending Limits
How companies set T&E policy maximums for meals, hotel and airfare:
25%
25%24%
20%
6%
We do not have expense category limits
Based on internal historical spending
Follow U.S. GSA per diem rate guidelines
Determined by annual budgeting process
Other
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Expense Management Practices
a) Paper-based/spreadsheetsb) ERP system (Oracle, Microsoft Dynamics, etc.)c) Web-based software (Certify, Concur, etc.)d) Not applicable
How does your organization currently manage its T&E spend?
POLLING QUESTION 1
Methods for Managing T&E Reporting
The mix of expense management systems remains consistent:
Reference: Certify’s Annual Travel & Expense Management Survey 2013-2016
Web-based solution (Concur, IBM, etc.)
Microsoft Excel/spreadsheets
Pen and paper
Homegrown solution
ERP/accounting package (Oracle, SAP, etc.)
T&E Systems by Company SizeMANUAL SYSTEM USAGE
70% small businesses | 26% enterprise
22%
55%
10%
5%8%
37%
37%
9%
4%
13%
46%
16%
4%
6%
28%
SMALLBUSINESS
MID-SIZEBUSINESS ENTERPRISE
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Integrated Efficiencies
Top web-based system integrations currently in use:
GENERAL LEDGER
ACCOUNTS PAYABLE
CREDIT CARD
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
67%
61%
77%
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Travel Booking Systems
A COMBINATION OF ABOVE
A TRAVEL AGENCY
CORPORATE TRAVEL SOFTWARE
ONLINE TRAVEL SITES
0% 10% 20% 30% 40% 50% 60%
43%
22%
15%
20%
29%
15%
5%
51%
Manual Web-based
Reference: Certify’s Annual Travel & Expense Management Survey 2016
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?
POLLING QUESTION 2
Corporate T&E Policy by System
93%web-based
78%manual
Does your company have a written T&E policy in place?
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Corporate T&E Policy Compliance
85%of all companies report
having a writtenT&E policy in place
73%of those companies
are manually reviewing for policy violations
Manual policy review is inefficient, prone to error and fraud
Reference: Certify’s Annual Travel & Expense Management Survey 2016
0%5%
10%15%20%25%30%35%40%45%
6%
31%
42%
20%26%
Methods to Enforce T&E Policy Compliance
53% of companies on a web-based system
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Why Policy Enforcement MattersTop 5 Highest Expense Amounts of 2015
$35,000 for a dozen cases of wine
$25,000 house rental for one day
$20,000 private plane rental
$18,000 night out in Las Vegas
$4,000 for one bottle of champagne
Reference: Certify’s Craziest Expenses Survey 2015 (non-customers)
Improving T&E Expense Reporting
Expense Management Automation
• Cost savings: reduce costs in time and materials required to process expense reports
• Process efficiency: eliminate data entry and errors, improve administrative reporting
• Increased productivity: mobile and cloud-based accessibility simplify expense management
• Policy compliance: integrate company T&E policies and spending controls
Why do best-in-class companies turn to automation?
Improving Expense ManagementAre you planning to switch or currently in the process of evaluating vendors for a new web-based system?
37%SMALL
BUSINESS
46%MIDSIZED
COMPANIES
53%ENTERPRISE
Reference: Certify’s Annual Travel & Expense Management Survey 2016
62% of all companies planning to make the switch will do so in the next 12 months
Driving Force Behind the Switch
Integrate multiple finance & HR systems into one system
Increase frequency of expense reports being submitted
Reimburse employees faster
Improve employee compliance rates to corporate travel policies
Gain reporting and analytics around T&E spend
Provide expense system accessibly from anywhere (online, mobile)
Simplifying the expense reporting process for employees and managers
0% 10% 20% 30% 40% 50% 60% 70%
14%
14%
25%
28%
32%
40%
66%
Reference: Certify’s Annual Travel & Expense Management Survey 2016
A Quick Note About Reimbursement
88% reimburse in 12 days or less
Companies using a web-based system are integrated with payroll:
59% use direct deposit via ACH integration
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Leading frustrations for T&E program administrators:
Top Expense Management Pain Points
50% employees
losing receipts
45% employee’s failureto submit reports
on time
38% time it takes to
reconcile, reviewand approve
30% reviewing for
policy violations
28% errors onthe report
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Key Areas of Improvement for 2016Process improvements top the list:
Systems and data integration
Mobility/mobile access
Travel booking
Transparency/visibility into reporting data
Expense management process
0% 5% 10% 15% 20% 25% 30% 35% 40%
9%
10%
11%
21%
37%
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Must-Have Expense Reporting FeaturesAutomation: Expense report creation, workflow process and approvals, direct credit card feeds
Mobile Applications: Smartphone-enabled receipt image capture, mobile report creation and approval, and policy tools
Reporting: Complete visibility into process and spending by category, department, employee
Compliance: Duplicate receipts/expenses, category spending limits, automatic notification of violations
Integration: Accounting software, general ledger, HRIS, CRM, ERP, ACH direct deposit
Achieving Return on Investment
a) Under $7 per reportb) $10−$20 per reportc) $25 or more per reportd) We do not track these costs
What is the average cost to process a single expense report at your organization?
POLLING QUESTION 3
Average cost to process a single expense report:
$6.85fully automated
$17.31 semi-automated
$26.63 manual
(PayStream Advisors)
28%
19%
5%
48%
Under $7 per report$10−$20 per report$25 or more per report
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Expense Reporting Costs
• Hard costs for paper, printing and postage
• Hours to create, review and approve reports
• Time required for reconciliation and reimbursement • Storage fees to archive expense reports • Lost productivity
$$$Hidden Costs of a Manual System
Reducing processing costs is the #1 T&E improvement for 48% of all best-in-class companies (Aberdeen Group)
How ROI is AchievedWhat are the ways you’ve achieved ROI on your new expense management system?
58% 53%33% 26% 22% 22%
58% 53%33% 26% 22% 22%
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Average Time to ROI is Improving
Reference: Certify’s Annual Travel & Expense Management Survey 2015 & 2016
2015 Expense Trends Survey
2016 Expense Trends Survey
Benefits of Investing in Automation
Actual benefits of using a web-based system surpass expectation in every category
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Unexpected ResultsWeb-based expense systems and data are being leveraged for other business functions:
% o
f com
pani
es re
porti
ng
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Annual budgeting and planning: 44%
Auditing: 43%
Invoicing and payments: 39%
Regular forecasting (monthly, quarterly,
etc.): 28%
Financial reporting (Sarbanes-Oxley,
SEC, etc.): 25%
Reference: Certify’s Annual Travel & Expense Management Survey 2016
Closing Thoughts
• Stay on top of T&E benchmarks and business traveler trends to manage costs
• Companies of every size experience similar frustrations (and benefits)
• Determining expense report processing costs doesn’t have to be guesswork
• Understanding challenges and solutions can help you identify the best approach
• Opportunities for achieving return on investment are plentiful and fast
Q & A
Sponsor
Thank You!
Questions after the event? E-mail [email protected]
We hope to see you at a future AP Network event! For upcoming events please visit www.tapn.com.