2016 emerging trends in t&e expense management and business travel

Sponsor

1

Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

2016 Emerging Trends in T&E Expense Management and Business Travel

• Annual T&E expense spending trends and benchmarks by category

• Most expensed and top rated vendors for meals, lodging, airfare, and more

• Why 20% of company T&E spend is out of policy (and what you can do about it)

• How mobile technologies are transforming corporate travel and expense reporting

• Five strategies to simplify expense management and keep spending in check

Learning Objectives

After attending this event you will understand:

3

Proformative Event Notes

• The PPT is available under “Handouts”

• We will send you links via email to the presentation and the recording within 24 hours

• For CPE: Answer all polling questions and remain for the duration. CPE Credits awarded in 24 hours– Questions on CPE? Email cpe@proformative.com

• We want to hear from you! Ask questions for the Q&A session at the end of the event

• Please take the short survey at the end of the webinar

4

Introducing Proformative Academy: • On-demand video courses taught by senior practitioners• Over 200 finance and accounting courses - adding a course every day!• CPE for 7 certifications: CPA, CMA, CTP, FP&A, CFE, CRMA and CIA• Unlimited learning and CPE for $499/year!

Welcome to Proformative

“Proformative is the leading professional development resource for every member of the Office of the CFO”

If you want to learn more: Tell us on your survey!5

Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

2016 Emerging Trends in T&E Expense Management and Business TravelRobert Neveu, President and Co-Founder, Certify

Christopher Pless, AVP/Senior Accountant, Crestmark Bank

T&E Spending and Business Travel Trends

7

$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 Breakdown

74%under 250 miles

from home office

48%involves a

personal vehicle

31%require

air travel

Global Business Travel Association 2015

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

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%

Certify SpendSmart Report, Q4 2015

$98.75DAILYMEAL COST

2016

Certify SpendSmart Report, Q4 20152016 Business Travel News Corporate Travel Index

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%

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

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 2nd most difficult operating expense category to control Forrester Research 2015

How Travelers Spend the Company Dime

Most expensed and highest rated for dining:

Certify SpendSmart Report, Q1 2016

Most expensed and highest rated for hotel:

How Travelers Spend the Company Dime

Certify SpendSmart Report, Q1 2016

How Travelers Spend the Company Dime

Certify SpendSmart Report, Q1 2016

Most expensed and highest rated for air carrier:

Mobile is Made for Travel

Expedia/Egencia Mobile Index 2015

97%of business travelers carry at least

one mobile device

Ground Transportation Trends

51%45% 37%

13%31%

49%

36%24% 14%

Q22014

Q22015

Q22016

Certify SpendSmart Report 2014 - 2016

Certify SpendSmart Report 2014 - 2016

51%45% 37%

13%31%

49%

36%24% 14%

Q22014

Q22015

Q22016

Benchmark Spending by Category

+1176% ride-hailing receipts in 2 years

Expense Technology Trends

22

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 T&E spend?

POLLING QUESTION 1

23

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

37%

37%

9%

4%

13%

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 Size

22%

55%

10%

5%8%

46%

16%

4%

6%

28%

SMALLBUSINESS

MID-SIZEBUSINESS

ENTERPRISE

Certify Annual Travel & Expense Management Survey 2016

26

MANUAL SYSTEMS: 70% small businesses, 26% enterprise

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

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

Certify Annual Travel & Expense Management Survey 2016

28

Top Goals for Improving T&E

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 fraudCertify Annual Travel & Expense Management Survey 2016

For the average company, an estimated 20% of a total T&E spend is considered out of policyAberdeen Group 2014

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

32

Five T&E Strategies to Streamline Process and Improve Spending Control

33

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 expense reporting reduces processing costs by 65%, delivers quicker report approval and reimbursement timesAberdeen Group 2014

T&E 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

Businesses under 100 employees have a 28% higher median fraud loss than those with >100Association of Certified Fraud Examiners 2015

Travel: Control Cost Before its 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 budget2015 GBTA Ancillary Fee Handbook

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

Reporting: Insight and Accountability

• 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 compliance rates

• Workflow: monitor people and process; documented path of approvals ensure expenses are reviewed and approved according to guidelines

Actionable analytics and insights into key spending and performance metrics:

Lack of visibility into spending is the top T&E area of improvement for 51% of all companies

Aberdeen Group 2014

Automation Gets Results

Thank You

45

Q & A

46

• Join us at www.proformative.com to continue the conversation with your peers in our community

• If you want an introduction to today’s speakers or sponsor, or want to know more about Proformative Academy, tell us on the survey!

• Thanks to our speakers

47

A Few Final Items

48

Sponsor

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?

49

POLLING QUESTION 3