travel and entertainment expense management trends for 2016

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Travel and Entertainment Expense Management Trends for 2016

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Housekeeping• Handouts

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• 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


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%


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


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?


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


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


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


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%


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


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


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%


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


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%


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


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%


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

Sponsor

Thank You!

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