T&E Trends and Best Practices in the Digital World

T&E Trends
and Best Practices
in the Digital World
Ernie Humphrey, CTP
October 30, 2019
Sponsored by:

#InsideTalk
Copyright © 2019 IMA® (Institute of Management Accountants). All rights reserved.
2
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Join the Conversation
#InsideTalk
@IMA_News

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Moderator
Terry Mormile, CPA
Director
Educational Initiatives & Career Services
IMA

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Featured Presenter
Ernie Humphrey, CTP
CEO & Founder
360 Thought Leadership Consulting

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Learning Objectives
Upon completing this webinar, you will be able to:
1. Identify specific opportunities to lower T&E report processing
costs at your company.
2. Describe ways to positively impact productivity within and
beyond accounts payable at your company.
3. Give examples of ways to mitigate T&E-related fraud
exposures.
4. Recognize current and emerging trends in T&E best
practices, including the evolving role of technology.

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About Certify
• Integrated, automated solutions for travel, expense, accounts payable
invoice, and purchasing
• 64 languages, 140+ currencies, clients in 80 countries
• #1 G2 Crowd for user satisfaction in expense management software
(2014-2019) and Momentum Grid leader in expense management
software (2018)
• PC Magazine Editors’ Choice for best expense tracking software
(2015-2019)
• Processing expenses and receipts valued at over $3.3 billion annually

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Our Agenda
1. Why Travel and Expense Matters
2. Key Findings From The 2019 Travel and Expense Management Trends Report
3. The Challenges of T&E Management
4. Underlying Causes of Inefficient T&E Management
5. Technology’s Role in T&E Management
6. Recommendations for Improving T&E Management

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The Scale of T&E
90%
of all business travel generated in North
America ($338 billion) was spent on
domestic trips in 2018
$1.41 trillion
spent globally on business travel
activity in 2018
$304 billion
spent on business travel in the
United States in 2018
Source: GBTA BTI™ Outlook – Annual Global Report & Forecast 2019

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The Scale of T&E
What does business travel
mean for your bottom
line?
Comprehensive 18-year econometric
analysis across 14 industries by Oxford
Economics and U.S. Travel Association.
For every dollar invested in business travel,
U.S. companies generated $9.50 in
revenue and $2.90 in profit.
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
Source: Oxford Economics and U.S. Travel Association

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Effective T&E Management
• Lowers expense report processing costs
• Increases the productivity of travelers
• Impacts the productivity of managers, accountants,
and treasury staff
• Improves working capital management
• Impacts the bottom line on an ongoing basis

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a) Non-existent
b) Minimal at best
c) OK, but we have major blind spots
d) Good, but we could do better
e) Ideal
Polling Question 1
How would you characterize the level of visibility your
company has relative to T&E spend?

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Polling Question 1 Results (Placeholder)

Key Findings From
The 2019 Travel and Expense
Management Trends Report

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About the Research
585 finance professionals from outside the Certify customer base:
37%
44%
19%
Manager, controller, or accountant
Other (accounting staff, consultant,
administrative, etc.)
Director-level or above with
expense reporting responsibility
(CEO, CFO, etc.)
Company Size
Enterprise: More than 1,000 employees
Mid-Market: 101-999 employees
Small Business: Less than 100 employees
23%
40%
37%
2019 Travel & Expense Management Trends Report, Certify, Inc.

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Key Findings
1. Many organizations do not understand the
challenges they face in effective T&E management.
2. Technology immaturity is an inherent barrier to
effective T&E management at many organizations.
3. Technology is key to addressing areas in T&E
management that need improvement.
4. Companies view the value offered by expense
management systems through the lens of ease of
use, driven by mobile functionality.
5. Companies that invest in dedicated expense
management systems are seeing a positive ROI for
that investment.

The Challenges of T&E Management

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Areas of T&E Management Most Critical to Improve in 2019
25%
14%
12% 11% 11%
8% 8%
Expense
management
process efficiency
Transparency/
visibility/ reporting
related to spend
Corporate travel
policy compliance
Audit and reporting Travel booking Integration between
business systems
Employee
reimbursement
times

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Controlling T&E Spend–The Budget
How does your organization set T&E policy category amounts or
maximums for meals, hotel, and airfare?
28%
25% 25%
13%
9%
0%
5%
10%
15%
20%
25%
30%
Follow US GSA per diem
rates
Based on internal
historical spending trends
Determined by annual
budgeting process
We do not have policy
maximums
Other

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Controlling T&E Spend–A Formal T&E Policy
Do you have a T&E policy in place?
72%
21%
7%
Yes
No
I don’t know

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Controlling T&E Spend–T&E Policy IQ
72% of companies have a formal T&E policy in place.
But 58% of respondents report
that their travelers’ understanding
of their T&E policy is, at best,
“decent—but in need of
improvement”.

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a) Poor
b) Decent
c) Good
d) Great
e) I don’t know
Polling Question 2
How well would you describe your travelers and managers
knowledge of your company’s T&E policy?

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Controlling T&E Spend–T&E Policy Compliance
How does your company enforce its travel and expense policy?
29%
27%
19%
17%
5%
3%
Manually check each
expense
Our T&E system
automatically flags
out of policy
expenses
Responsibility of
employees
Manually, only
reviewing expenses
with a high value
Our T&E policy is not
enforced
I don't know

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Controlling T&E Spend–Policy Compliance
What percentage of submitted expenses are within policy?
22%
54%
16%
3%
5%
0 – 24%
25% - 49%
50% - 74%
75% - 100%
I am not sure

Nearly half (46%) of organizations
report less than a 75% rate of
compliance with their T&E policy.
And 26% of enterprise-sized organization do not
know what percentage of submitted expenses are
T&E policy compliant.

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Controlling Expense Report Processing Costs
What is the average cost to process a single expense report in
your organization?
46%
29%
11%
8% 6%
We do not track these
costs
Under $10 $11-$20 $31 or more $21-$30

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a) Spreadsheets/Microsoft Excel
b) ERP
c) Homegrown system
d) Dedicated expense management system (Certify, Chrome River,
Concur, etc.)
e) I don’t know
Polling Question 3
What is the primary system your organization uses to
manage T&E?

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Underlying Causes of Inefficient
T&E Management

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Cause #1: Poor Visibility
1. Poor visibility into T&E data.
43% of organizations overall still
manage T&E manually. This means
little to no reporting functionality to
identify trends and areas of concern.

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Expense Management System in Use
Enterprise Mid-Market Small Business
Dedicated solution ERP/accounting package
(Oracle, SAP, etc.)
Microsoft Excel/spreadsheets Pen and paper Homegrown
solution
46%
27%
16%
2%
9%
32%
24%
33%
4%
7%
32%
15%
38%
10%
5%
27% Manual System 44% Manual System 53% Manual System

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Cause #2: Lack of Control
2. Lack of control over T&E
spending.
Only 72% of organizations have a
formal T&E policy in place.
• Of these, 58% report that their travelers
have at best, a “decent” understanding of
their T&E policies.
• 20% of companies that have a T&E policy
in place report that the understanding of
their T&E policy by their travelers is
“minimal at best”.

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Cause #2: Lack of Control
• 46% of organizations report less than a 75% rate of
compliance with T&E policy—while 26% of enterprise-sized
companies report they do not know what percentage of
submitted expenses are T&E policy compliant.
• Only 27% of organizations have a system that automatically
flags out of policy expenses.
• 13% of organizations do not have spending policy limits.

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Cause #3: The Need to Reduce Costs
3. The need to reduce expense
report processing costs.
Among companies that invested or
are planning to invest in a dedicated
T&E solution, 82% identified one of
the main reasons as “simplifying the
expense reporting process for
employees and managers.

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Expense Reporting Pain Points
Biggest pain points in expense management
53%
41%
35%
27% 26%
24%
0%
10%
20%
30%
40%
50%
60%
Issues with
receipts
Late reports Time- reconcile,
review, approvals
Errors on expense
reports
Reconciling the
data
Reviewing for
policy violations

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Employees AccountantsManagers
Gather receipts,
itineraries, and write
down non-receipt
items
Enter expenses in
Excel with category,
vendor, dates, etc.
Print spreadsheets,
tape or staple
receipts, and make
copies
Sign/date report
and present or mail
to manager
And then…wait

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Receive reports for
all employees at
different times
during the
month/quarter
Check expenses for
receipts, review for
out-of-policy items,
etc. If errors appear, return
report to employee to
start over; wait for
resubmission
Sign/approve
reports and route to
the next manager or
to AP

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Receive reports for all
employees at different
times of the
month/quarter
Check for receipts,
manager approvals,
out-of-policy items,
etc. Match receipts with
line-items, verify all
charges, dates, and
vendors
Manually enter
expense data into
accounting software
Manually enter data
from accounting
software to payroll
for reimbursement

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a) Under $10
b) $11-$20
c) $21-$30
d) $31 or more
e) We do not track these costs
Polling Question 4
What is the average cost to process a single expense
report in your organization?

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Technology’s Role
in T&E Management

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Top 3 Drivers of ROI From Dedicated Solutions
Process
Efficiency
Improved
Productivity
Increased Policy
Compliance

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Drivers of Technology Investment
Main reasons behind moving to a dedicated expense management solution
82%
35% 34% 32% 29%
19%
10% 6% 3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Simplifying
the expense
reporting
process
Providing
an expense
system
available
anywhere
(global,
mobile)
Improving
travel policy
compliance
Reimburse
employees
faster
Improve
reporting
and
analytics
around T&E
spend
Integrating
multiple
finance &
HR systems
into one
system
Increase
frequency of
expense
reports
being
submitted
Improve
VAT
recovery
Other

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Drivers of Technology Investment
Most important features when selecting a T&E solution
62%
60%
43%
35%
34%
32%
25%
Expense management automation
Simplicity/ ease of use for employees
Integration with HR/ finance systems
Rapid implementation time
Mobile applications and accessibility
Reporting and insight into spend
Audit and reporting

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Sources of Technology ROI
Features/sources of T&E technology ROI
63%
35%
31%
30%
26%
21%
21%
20%
20%
0% 10% 20% 30% 40% 50% 60% 70%
Improved process efficiency
Reduction in processing costs
Mobile accessibility
Elimination of duplicate payments
Reduction in overhead costs
Travel booking control
More accurate mileage tracking
Reduction in fraudulent expenses
Increased employee productivity

Recommendations for Improving
T&E Management

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5 Key Recommendations
1. Organizations that invest in dedicated expense management systems are
seeing an ROI for that investment. That means the right technology and the
right technology partner impact the bottom line of companies that invest in
T&E done right.
2. Organizations view the value offered by expense management systems
through the lens of ease of use driven by mobile functionality.
3. Technology is the key to addressing areas in T&E management that need
improvement. Organizations not currently using a dedicated expense
management solution would do well to look at the business case for
investing in the right solution.

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5 Key Recommendations
4. Many organizations do not understand the challenges they face in effective
T&E management. Map out all processes, people and technology involved
in creating and processing an expense report end-to-end and build up the
estimated cost to process an expense report.
5. Technology immaturity is a key inherent barriers to effective T&E
management at most companies. Organizations would do well to invest in
technology that unlocks the value of T&E done right.

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5 Suggestions for Success
1. Map out all processes, people and technology involved in creating
and processing an expense report end to end.
2. Estimate the cost to process an expense report.
3. Invest in understanding the pain points of your expense reporting
and reimbursement process.
4. Invest in creating and enforcing an effective T&E policy.
5. Invest in technology that makes it easy for travelers to create
expense reports and facilitates straight- through processing from
submission to reimbursement.

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Questions & Answers
Use the Q & A Panel to send your questions to our panelists.
Ernie Humphrey, CTP
CEO & Founder
Terry Mormile, CPA
Director
Educational Initiatives & Career Services
IMA

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Thank You to Our Presenter!
Ernie Humphrey, CTP
CEO & Founder

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Final Reminders
►Complete the Evaluation poll – 2 options
• On your screen
• Evaluation Survey icon at the bottom of your console
►Access to your CPE Certificate – 2 options
• Click the “CPE” icon at the bottom of your console
or
• Click the link in your post-event e-mail
►Please print a copy of the CPE certificate for your records.
►Your CPE credit will be automatically recorded in your transcript.

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Thank You to Our Sponsor!
www.Certify.com

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