Sherry Hibbs, VP Sales & Relationship Management BMO Harris Bank
Robin Hanselman, Director Sales US West Chrome River
Stephen White, Director Corporate Sales Chrome River
September , 2014
BRINGING ROI TO YOUR BOTTOM LINE: COMMERCIAL CARD SOLUTIONS & TECHNOLOGY
CHROME RIVER EXPENSE MANAGEMENT
Agenda Overview
Commercial Card Best PracticesSherry Hibbs – Featuring Statistical Information on Payment Solutions
Expense Management Technology Best PracticesRobin Hanselman & Stephen White – Featuring Technology Solutions
Q & A Round TableSherry Hibbs, Robin Hanselman & Stephen White
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Commercial Card Best Practices
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IntroductionSherry Hibbs, VP Sales & Relationship Management BMO Harris Bank
• Over 25 years of Commercial Card industry experience.
• Professional experience includes senior management Commercial Card positions for card issuers - Citicorp Diners Club, US Bank, JPMC/Bank One and Bank of Oklahoma (BOKF).
• In addition, professional experience includes working as the VP of Strategic Alliances for WorldTravel Partners/BCD Travel (3rd largest global travel management company) driving strategic payment solution alliances.
• Strategic selling and management experience in all corporate market segments which includes Fortune 500, large, middle and small market companies.
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What are Commercial Payment Solutions
• Types of Commercial Charge Cards:
– MasterCard
– Visa
– American Express
– Discover
– Diners Club
– JCB
E-Payables Event Cards
Declining Balance Cards Fleet Cards
One Card Solution Travel & Entertainment Cards
Purchasing Cards Ghost Accounts
Virtual Cards Project Cards
Meeting Cards Accounts Payable Cards
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U.S. Commercial Card volumes are projected to grow significantly faster than GDP
Page 6
*Sources: Glenbrook Commercial Card Sizing, 2012; MasterCard Analysis, 2013
25%
20%
15%
10%
5%
0%
-5%
-10%
2007 2008 2009 2010 2011 2012 2013 2014 2015
Commercial Card GDP Growth
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The untapped Commercial Card opportunity is tremendous in the U.S. and Canada
Sources:1D&B, 2013; 2B2B International SME research, 2011; 3Nilson, 2012 & MasterCard Analysis, 2012; 4Kaiser Associates, 2012 & MasterCard Analysis, 2013
Total Spend Estimate
Cardable Opportunity
Carded Volume
Only 1.6% of total Middle Market spend is
currently captured on card
March 19, 2013
Only 1.2% of total Middle Market spend is
currently captured on card
Canadian Middle Market SegmentU.S. Middle Market Segment
$180B4
$1.0T4
$11B4
$7.8T1
$1.9T2
$121B3
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Enhanced Spend Analysis – Realign Forms of Payment
Source: First Annapolis Consulting / Commercial Card Market Landscape February 2012
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Working Capital Management
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Travel & Entertainment Card Best Practices
• Benchmarking Peer Groups
• Payment Method Analysis
• Air /Hotel /Car Rental Price Audit
• Rewards/Rebates
• Compliance
• Technology Usage
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The Value of P-Card vs. Traditional Purchase Order Process
Using a P-Card vs. a traditional Purchase Order process saves almost $74 per transaction
Source: RPMG, 2012
$90.77
$73.53saved
$17.24
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Breakdown of the Value of P-Card vs. Traditional Purchase Order Process
Breakdown of Value of P-Card vs. PO Process
Using a P-Card generates savings during the sourcing, procurement, and invoice/payment/reconciliation process
Source: RPMG, 2012
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Strong Card Acceptance
• Travelers and purchasing agents need strong acceptability to utilize the cards.
• Acceptance for B to B transactions.
Payment Terms and Liability
Options
• Flexible payment and liability options (individual and corporate)
Customer Service
• Dedicated personal representatives tied directly to your account
• Customer service agents available 24/7
MCC/Supplier Specific Control
Features
• Ability to block and maintain for card usage• Support supply management requirements
Rewards • Points to miles on major airlines• Customized reward capability• Unlimited redemption options
Fraud Coverage • Included in cardmember and contractual agreements
Travel Accident Insurance
• Comprehensive insurance to meet Business Travelers needs
• Insurance that delivers value.
RebateOpportunities
• Financial considerations that will vary between types of card accounts implemented.
• Payment terms, annualized charge volume, and rewards participation factors in calculations.
Baggage Insurance
• Insurance that covers checked, carry –on, and delayed baggage
ATM Access • ATM locations worldwide
CDW Insurance • Free Primary Collision Damage Insurance for car rentals
Delinquency and late fees
• Vary by card issuers
Airport Lounges • Free access to Airport Lounges around the world
Client Relationship Management
• High touch field based service organization
What can you expect from your card provider? Card Benefits and Features
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MCC Restrictions
This feature provides the ability to limit or block Cardholder purchases made by Merchant Category Codes (MCC). This feature has the option of restricting card usage to specific merchant types such as hotels, restaurants or office supplies.
Specific Supplier Blocking
Ability to limit purchases to specific vendors and locations or block expenditures by specific supplier and location. This feature was developed at the request of corporate clients wanting to maximize arrangements on blanket orders and to allow high value transaction purchasing.
Card Controls
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Card number and expiry passed through authorization system for accuracy, Card Validation Code (CVC) is passed and evaluated, status of card (open, closed, suspended) and available credit is checked. The authorization will be denied if any ofthese evaluations fail and merchant may be asked to retain card.
Merchant requests Cardholder to provide identification to validate authenticity
If authorization successfully passes card validation, authorization system recognizesthe commercial card type, and evaluates the transaction against any organizationcard controls. The authorization will be denied if the transaction evaluation fails any of the pre-set controls.
Authorizations undergo sophisticated review for indications of possible fraudulent use. Many fraud systems are a stand-alone platform which receives and stores real-time feed of transactional authorization responses and submits each incoming transactional authorization to a comprehensive evaluation process.
Card Validation
Card Blocking &Controls
Early Fraud DetectionEvaluation
All attempts to authorize a transaction on a card product pass through four distinct processes:
PhysicalEvaluation
Commercial Cards provide significantly less risk than other methods of payment than an organization may have in place today.
Protecting Against Fraud & Misuse
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Data Enables Efficiency
Enhanced data brings
significant efficiency to
your expense reporting
system.
17:00
20:00
11:00
28:00
7:00
8:006:00
14:00
76:00 Minutes
35:00 MinutesOverall Savings: 54%
Paper Based Electronic Pre-populated
Time for clerical/accounting personnel to reimburse expense report and reconcile payment to bank data
Time for clerical employees to process and prepare an expense report for payment
Time for supervisors to review an expense report submitted
Time for traveler/cardholder to fill out an expense report
Source: RPMG 2013
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Expense Management Technology Best Practices
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Introducing Robin Hanselman Director Sales US West Chrome River
• Robin’s background is in Finance and Accounting where she spent a number of years working as a CPA.
• After finding out how much easier the right financial programs and technology can make life, she has spent the last 15 years consulting and selling financial technology solutions
• Technology platforms have included everything from ERP to Investment Accounting and Accounts Payable automation
• Robin has worked across many different industries and is currently specializing in Professional Services organizations such as accounting, architecture, consulting, engineering, and law firms here at Chrome River
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Introducing Stephen WhiteDirector Corporate Sales Chrome River
• Stephen has over ten years in the spend management space.
• Technology platforms delivered include Concur and Chrome River.
• Customers such as Celanese, Waste Management, The Staubach Company, Oxea, JC Penney and HQ Global.
• Stephen was hired by Chrome River in 2012 to help drive Corporate sales growth. He currently resides in Phoenix, AZ yet is ready to get back to his home state of Texas.
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Best Practices Technology Differentiators
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Simple and Intuitive to Use
– User-focused design
– Completely configurable
Business rules engine
– Most powerful workflow
– Highly flexible policy configurations
Ease of Integration
– Financial Systems – enterprise data exchg
– Billing systems, Payroll, Projects
Broad Accounts Payable Automation Platform
– EXPENSE, INVOICE, PO, ANALYTICS
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Expense Management Technology Best Practice #1: Automate Expense Capture
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The Argument Against “Free”
• A manual expense report costs between $20.18 - $51.35 to process• An optimally automated expense report is significantly less to
process, ranging between $6.25 - $7.60• A manual invoice process is between $14.04 - $16.67 per invoice• An automated invoice is again significantly less ranging between $3.34 - $8.32
Partially automated processes provide some cost savings but significantly less than optimally automated processes
Source = PayStream Advisors
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Automatic Expense Capture - Example
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Simplify Receipt Capture
Snap and Send
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Expense Management Technology Best Practice #2: Have an Accountable Plan
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What is it and why is it important?
An Accountable Plan is an employee reimbursement allowance arrangement or method for reimbursing employees for business travel expenses that complies with IRS regulations.
If you cannot demonstrate that you have an Accountable Plan, expense reimbursements may be considered taxable income and 1099s must be provided to the employees incurring the expenses!
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Basics of an Accountable Plan
According the IRS:
1.The expense must have a business connection
2.Expenses must be submitted in a timely manner
3.Overpayment of expenses must be returned in a timely manner
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Accountable Plan - Further Clarification
• An advance received within 30 days of the time the expense is incurred
• Expenses are adequately accounted for within 60 days after they are paid or incurred
• Excess reimbursements (anything paid over and above the allowable amounts) are returned within 120 days
• An employee provides an adequate accounting of outstanding advances within 120 days of receiving a periodic statement
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Accountable Plan - Further Clarification - Example
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Expense Management Technology Best Practice #3: Automate Policy Enforcement
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Business Rules Engine
Configurable Expense Policies
Configurable Approval Routing Rules
Configurable Tax Rules, etc.
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Example - Built in Compliance Rules
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Example - Client Specific Compliance Rules
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Expense Management Technology Best Practice #4: Have a Clear Approval Process
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Suggestions for Approval Process
1. Consider roles and responsibilities
2. Consider how many levels of approval something truly needs
3. Would some expenses be best suited for Pre-Approvals?
4. Where do you want Finance in the process?
5. Re-think your expense audit practices
6. Let the system do the ‘dirty work’ whenever possible
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The Value of Automated Approval Workflow
• Remember the Business Rules Engine at work?
• By automating the process, you can now have approvals that are triggered by specific compliance issues.
• This eliminates the need to audit 100% of 100%
• A much better use of valuable high-level approvers’ time.
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Consider Mobile Approval Methods
Approval on the go!
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Expense Management Best Practice #5:
Go Green - Eliminate Checks
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Streamline your Payment Process
• Direct ACH payments now the norm
– Less potential for fraud and duplicate payments
– More efficient, less work for A/P
• For BOTH employee reimbursements and vendors
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Other Benefits
• Cost savings
– No more paper checks and manual processes = savings
• Efficiency
• More timely payments
• Enhanced Compliance
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Expense Management Technology Best Practice #6: “Leverage your Leverage”
Through
Analytics and Reporting
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Some Key Reporting Metrics #1
• Analyzing spend by Expense Category
BENEFIT – negotiate preferred relationships with vendors
• Aggregating expenses associated with Business Development or events
BENEFIT - meaningful insight to ROI of these activities
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Some Key Reporting Metrics #2
• Analyze Expenses by Client or Project
BENEFIT – Determines the ROI of a fixed fee project.
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Some Key Reporting Metrics #3
• KPI’s can be created on Open Approvals or Aging
BENEFIT – Remedy bottlenecks in reimbursement cycle time
• Compliance reporting
BENEFIT – Can help spot individuals or groups that are at higher risk for policy violations
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Q & ARound Table
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THANK YOU!Sherry Hibbs, BMO Diners Club/MasterCard
Robin Hanselman, Chrome River Technologies
Stephen White, Chrome River Technologies