10 Ridiculous Items For Expense Reimbursement
Here is an interesting article from the Huffington Post on 10 ridiculous items for which employees tried to get reimbursement.The list is very interesting and diverse! Would love to hear your comments….
Travel Policy Trends – by the GBTA
Our friends at the GBTA published a study on Travel Policy Trends: Control – what does it mean and who has it? Here is a teaser of the report –
“Travel professionals are playing an increasingly large and influential role in shaping and controlling business travel policy, aided by online booking tools and fueled by a growing focus on cost-saving efforts. This third annual study surveyed nearly 1,500 travel professionals in North America, Europe, Asia and Latin America to determine, for the first time ever, what “control” over travel policy means to them and how travel professionals are adapting to new and evolving business travel requirements..
Highlights include:
•Who has the control over travel policy?
•What “control” over travel policy means to travel managers
•What travel managers are doing to adapt to new and evolving environments
•How travel policy differs by company travel spend
The full report can be found here
Finance Speak – ‘We lack visibility with our travel expenses. Please advise on how to tackle this’
(Finance Speak is a series where we discuss typical questions & concerns expressed by our customers. We will delve into each of the points and discuss the best way for the company to handle it. If you’d like to contribute or ask a question, send a message to info@gorillaexpense.com with ‘Finance Speak’ in the subject line.)
Executive (E) at a large manufacturing company – We have a sizeable mobile workforce. This mainly includes sales folks and purchasing managers who travel to meet with vendors and OEMs. We currently have no visibility into how we spend on travel. We have a very manual expense reporting process and travel expenses are approved without any due diligence. This leads to almost no visibility in where & how we spend. I would like to establish a process without rocking the boat too much. How do I go about this and what would be your recommendations…..
G – Do you currently have an established and well communicated process to manage T&E spend at all?
E – Not really. Some of the travel we do is last minute and there is minimal planning. After that, there is almost no reconciliation with the spend, not to mention our travelers take forever to send in their reports. The whole process pretty much runs open loop
G – Do you have a policies document for travel expenses? Do you know what your spend limits needs to be in a year?
E – We don’t have a policies document. We are paying more attention on how to budget our spend and making serious attempts to be within that budget. Some of these vary by projects so it does become a little hard to tackle
G – So, it sounds like managing spend by projects would definitely be an area of interest. It would also appear that you would like to automate this process as much as possible so that all stakeholders are involved. Would this be a correct assumption?
E – Absolutely! We would like for your company to guide us on how to setup a process and gradually automate it as we bring in more tools for the traveling folks. Can we connect this afternoon and discuss this in more detail?…….
This was definitely a very engaging discussion with our customer. Every company struggles with visibility into spend. Even the ones with a mature process. As companies grow their needs change and their tracking of parameters evolve – much more so for T&E because of the dynamic nature.
So what did we propose to our customer? We discussed many items but we recommended to take small steps that would converge at measurable goals over time. Due to the company’s culture, it made sense for them to not try too much at once. Here’s what we discussed –
T&E expense reporting process – We talked about the typical expense reporting process (See our website). This was a great way for them to start thinking about it. The key point was the importance of communicating this process and guidelines clearly & frequently to employees. After they looked at it, we helped them fine-tune it much more to meet their needs.
Expense reporting automation – A no-brainer really. This would solve several of the immediate inefficiencies and move them away from the manual process they have today. With this, their employees cannot make excuses for delays in submission. The other advantages are discussed below.
Policies for Expense Reporting – Our application includes setup of policies on various parameters. They were broken down into expense types for this company. This made a huge difference for them in being able to enforce limits. Here is an example screenshot –
Manager Approval – The application also has the ability for managers to view, correct, redirect & approve/reject expenses (See video). This way the right stakeholders were involved in the process and it wasn’t open loop anymore. The company setup a list of approving managers and specific employees to these managers for approval. Over the last few weeks, they have started creating additional layers of managers to review and monitor expense reports. A far cry from what they were doing a few months back!
Allocation of Expenses to Projects – We helped them track project expenses within the application. Project numbers are available to employees who allocate them to the report. We are working through the integration to their ERP system so that all these expenses are pushed to specific project accounts with no manual data entry. Their Accounts Payable manager now does more AP work instead of entering expenses!
T&E Analytics and Reporting – Finally, we walked them through our reporting and analytics engine that helps them slice and dice data to find out biggest areas of spend, expenses that were out of line, budgeted VS spent analysis, expenses by employees, expense types etc. so that they have better visibility on the where and how of travel spend. This has helped them review areas they would have never thought of looking at before.
End Result?
– The company now saves thousands of dollars per month by taking these steps
– The finance team has more details on travel spend
– Employees now submit expenses faster and they love the tools that have enabled improvements
– We helped them expand on their travel policies document when they had none
– The executive we interfaced with is loving his new approach and system having implemented all these steps without breaking the bank
While the company still needs to address other challenges, they are definitely on the right path towards tackling these tricky T&E problems one at a time. At the end of the day a big win-win for all!
Send us any questions or comments below or email us – info AT gorillaexpense
How Gorilla Expense Enhances Microsoft Dynamics GP
Over the last few months, we have been interfacing with several companies that use Microsoft Dynamics GP. The inevitable question that we hear during the requirements phase is related to importing transactions from the corporate credit card. How does it work? Basically, a corporate card is provided to each employee and they are expected to enter/import expenses on the card within the reporting system. Once the expense report is approved, the data is pushed to GP. After this, the accounting department then does the reconciliation between the employee-submitted corporate card expenses and the card statement. If everything is correct, this should balance out. That’s the gist of it.
As we know, GP has an Expense Management add-on called eExpense. This provides online expense reporting and helps companies automate their expense submission process. But eExpense does not provide an interface for managing and tagging corporate credit card expenses. That’s where we come in!
Within the Gorilla Expense application, users can import transactions from their corporate card and even their personal cards. For this discussion, we will stick to the corporate card only. After the transactions are imported, our application allows the users to tag them with specifics – such as expense type, codes, projects, cost centers or account numbers. These fields are setup in the Gorilla application based on how it is setup in GP. The user can also split each card transaction into multiple cost centers. Once the compiling and tagging is done, the report is then available to the manager and finally the accounting folks to approve.
Once the approval is complete, the final ‘gatekeeper’ sends the transactions to GP using the Gorilla Integration Manager (GIM). The GIM is a very versatile & flexible tool that allows the gatekeeper to map specific parameters and fields to codes and accounts within GP. So, with the push of a button, all the transactions are available within GP and they have been tagged appropriately and immediately.
Our application combined with the GIM takes the pain out of importing and processing corporate credit card transactions. It is a “cannot live without” (actual customer quote) tool for accounting folks that cuts-down the processing time, effort involved and importantly data entry errors. So there you have it. A quick synopsis of the Gorilla Expense – Great Plains symbiosis!
If you have any questions or need assistance in implementing or customizing our application with GP, send us a message at info@gorillaexpense.com or 877.973.6737.
Benefits of T&E Automation
Over the last few months we have encountered numerous questions and discussions related to automation of the T&E process; specifically the advantages of automation. Here is a quick background of the challenges and synopsis of the advantages.
Some background
Surveys based on millions of expense reports submitted by 3,000 companies reveal that U.S. T&E costs are constantly rising. The largest increases were in airfare (up 5.7%), hotels (up 4.5%), and meetings (up 7.7%).
With T&E spend accounting for 7% percent of the total budget for the average mid-market company ($50 million to $800 million in revenue), according to recent Aberdeen Group research, the challenge facing CFOs and Controllers in this area is dramatic.
Scope of challenge
Fundamentally, most companies struggle to tackle these challenges because of not knowing where to start. Aberdeen’s 2011 report (Expense Management for a New Decade and The Mid-Market Expense Management Program) shows that:
* 56% of mid-market companies have limited visibility into T&E spending
* Less than 45% track their expenses via analytics and business intelligence in real time
* Only 33% leverage cloud-based expense management solutions and 28% integrate corporate card and expense management
* Just 15% provide T&E data to C-level executives for financial forecasting purposes
* Finally only a mere 6% utilize mobile expense management apps
Solutions for a new decade
The good news is that cloud-based solutions have significantly brought down the cost of automating T&E expense management. Solutions such as ours have been shown to deliver huge reductions in expense processing costs.
What steps to take?
1. Benchmark T&E costs against industry averages
2. Audit expenses against corporate travel policies with an automated expense auditing system
3. Leverage expense data to improve budgeting and forecasting. This data should allow companies to adjust travel policies to match realities and trends
4. Sign up for a cloud-based and mobile expense-management application. For example the up-front costs to get going with our solution is very minimal while being very economical to own
5. Integrate corporate card solutions (if a company has a corporate card program)
More than just cost control
Automating T&E does even more than just reduce costs.
* It makes it harder for employees to inflate expenses — and far easier for companies to detect fraud. According to the Association of Certified Fraud Examiners, up to 13% of company fraud arises in this area, so that’s a huge advantage.
* Expense reporting time is reduced and employees are reimbursed faster which is a major boost to morale. Automation results in an average 28% reduction in expense approval times and 27% reduction in employee expense report creation times according to the latest Aberdeen reports.
nefits of T&E Automation
Over the last few months we have encountered numerous questions and discussions related to automation of the T&E process; specifically the advantages of automation. Here is a quick background of the challenges and synopsis of the advantages.
Some background –
Surveys based on millions of expense reports submitted by 3,000 companies reveal that U.S. T&E costs are constantly rising. The largest increases were in airfare (up 5.7%), hotels (up 4.5%), and meetings (up 7.7%).
With T&E spend accounting for 7% percent of the total budget for the average mid-market company ($50 million to $800 million in revenue), according to recent Aberdeen Group research, the challenge facing CFOs and Controllers in this area is dramatic.
Scope of challenge
Fundamentally, most companies struggle to tackle these challenges. Aberdeen’s 2011 report (Expense Management for a New Decade and The Mid-Market Expense Management Program) shows that:
* 56% of mid-market companies have limited visibility into T&E spending
* Less than 45% track their expenses via analytics and business intelligence in real time
* Only 33% leverage cloud-based expense management solutions and 28% integrate corporate card and expense management
* Just 15% provide T&E data to C-level executives for financial forecasting purposes
* Finally only a mere 6% utilize mobile expense management apps
Solutions for a new decade
The good news is that cloud-based solutions have significantly brought down the cost of automating T&E expense management. These new solutions have been shown to deliver a whopping 46% average reduction in expense-processing costs.
What steps to take?
1. Benchmark T&E costs against industry averages
2. Audit expenses against corporate travel policies with an automated expense auditing systems
3. Leverage expense data to improve budgeting and forecasting. This data should allow companies to adjust travel policies to match realities and trends
4. Sign up for cloud-based and mobile expense-management applications. Typically, they don’t have huge up-front costs and are economical to own
5. Integrate corporate card solutions (if a company has a corporate card program)
6. Implement an end-to-end expense management solution
More than just cost control
Automating T&E does even more than reduce costs.
* It makes it harder for employees to inflate expenses — and far easier for companies to detect fraud. According to the Association of Certified Fraud Examiners, up to 13% of company fraud arises in this area, so that’s a huge advantage.
* Expense reporting time is reduced and employees are reimbursed faster which is a major boost to morale. Automation results in an average 28% reduction in expense approval times and 27% reduction in employee expense report creation times according to the latest Aberdeen reports
Fun facts about Expense Reports
Did you know –
– The average tab for a meal worldwide is $39 while dining alone
– New York generates the most T&E expense reports than any other state, most of it coming from the NYC area
– Dining accounts for 10-17% of the $$ value on an average expense report
– Entertainment (group meals/customer meals etc.) account for a typical 6% of an expense report
– US Travelers spend surprisingly 4% more on cabs than on rental cars in a year
– Ground transportation accounts for 5% of the average expense account
– For US companies, business travel to Europe is on the average 7% more expensive than to any other part of the world
– The most expensive cab fare is in Vancouver, an average of $73. In the US, San Jose is the highest at $51
– Hotel room rates are on an average 14% more expensive in Europe than the US
– NYC is # 1 among cities visited for business travel
– Laundry and meals are the two main expense types areas that see expense fraud
Some of these we found online, some were submitted by our readers. Do you have other T&E trivia to share? Send us an email (info@gorillaexpense.com) and we will add to the list.
Finance Speak – ‘Struggling to maintain compliance with T&E policies. Need advice!’
(In Finance Speak our T&E experts discuss questions & concerns from our customers and solutions to the problems. If you’d like to contribute or ask a question, send a message to info@gorillaexpense.com with ‘Finance Speak’ in the subject line.)
Executive (Anonymous) – We are in a bit of pain with the way our T&E policies are managed. We are dealing with a high level of non-compliance in several areas such as travel booking, alcohol related expenses, delayed reports etc. The breach is not just from employees but also Sr. Management. I have been tasked with cleaning this up but need some guiding points. I am interested in hearing how you have tackled this for other companies.
Gorilla – T&E Policies is one of the touchiest and broadest areas of business travel. Unfortunately there is no magic bullet fix. What works for one company might not work for another. But there are certain fundamental guiding notes. Of course, the first step starts with a clear identification of the problem followed by an actionable plan with defined metrics to compare against.
Here are some of the broad ideas we discussed complied for easy reading:
- Make sure the T&E policies are part of a business travel manual or ‘guide’. Make sure they are up to date. If you don’t have a T&E guide, then create one. Without this, you are running open-loop that cannot be controlled. We can help with guidance in this area
- In this manual clearly note what is allowed and what is not. No ambiguity here. Don’t leave anything to interpretation
- Make sure the manual is easily available to everyone including employees, approvers, travel agents, assistants and executives
- Make the manual concise, yet comprehensive. Break it down in several distinct areas so that readers know where to look instead of having to scan a 100 page document
- The manual must be signed by the highest authority – CFO or CEO or both
- Once generally accepted policies have been agreed upon, there must be zero-tolerance for anyone not adhering to the policies. Make sure this is clearly noted in the manual
- Delegate responsibility. The approvers must check the report to ensure that no policies were broken by employees. The travel agent must compare flight requests to policies before booking etc. Also the approvers must also be given the authority to question any area of the expense report
- The policies in the manual must apply to everybody – including executives
- Look into a corporate card program. It is best to sign up for a program where the employee must apply. This way, the card’s responsibility becomes the employee’s. This ensures lesser delays with card payments leading to lower late payment fines for the company
- Mandate the inclusion of receipts for every transaction – electronic or paper. While this won’t prevent fraud, it can act as a deterrent
- Make a note in the manual that says the company will not reimburse unauthorized expenses. Create a list of such expenses
- If the company is struggling with delays in submission, create a clause for timely submission. If this clause is broken, note the penalties. For example, penalties could be as simple as delaying reimbursement to the more complex withholding a certain percentage of reimbursement after multiple warnings
As you can see, there are many ways to skin this cat. Usually, it is a good idea to kick-start a process and fine-tune it along the way. For most companies, getting up to speed will take some time and there is no way around it.
Executive – How does your automated solution help manage this process?
Gorilla – Using our solution, you can set spending limits for various expense types. Questionable transactions get flagged in the application. You can create multi-level report approval that acts as a deterrent against policy infringement. With e-receipts, all transactions have supporting information. Our mobile app and credit card import module make it easy to submit expenses immediately after incurred thus reducing delays. We have other features that enhance T&E compliance.
After our conversation, our customer left with several ideas to implement and a better understanding of the challenges.
If you have any questions or comments, reach us at info AT gorillaexpense.com.
T&E expense forecasts for 2012. How does it look?
So what is the prognosis for business travel in 2012? Here is the long story short:
1) Companies are expecting more business travel
2) Increased pricing from suppliers across the board
Sounds like more of good news with a little bit of bad news. Companies are looking to grow their businesses and therefore expect more travel. Increased supplier pricing is expected to put a small dent. Companies can expect to see their corporate travel budgets rise.
Here is the numerical breakdown of % price increase in a few key areas:
Flights
* North America Short Haul (Economy): 2 – 5%
* North America Long Haul (Economy): 0.5 – 3.5%
* North America Short Haul (Business): 5 – 7%
* North America Long Haul (Business): 3 – 5%
Hotels
* North America Mid-Range: 2.5 – 6.5%
* North America Upper-Range: 1.5 – 5.5%
Car Rentals
* North America Base Rates: (-1)% – 0%
* North America Rate Per Day: 2 – 3%
For detailed information, see the reference article .
Finance Speak – Cloud based or On-Premise?
(Finance Speak is a new series where we will discuss typical questions & concerns expressed by our customers. We will delve into the logic and analysis behind each discussion. If you’d like to contribute or ask a question, send a message to info@gorillaexpense.com with ‘Finance Speak’ in the subject line.)
Gorilla – Would you like for us to host the application & data or do you want to manage it yourselves?
Executive (Anonymous) – I think we will be going with an On-Premise package because it will be cheaper
G – Do you have a server? Do you have internal experts who can tackle this? Do you plan to host other applications?
E – We don’t really have an IT team or other applications but it shouldn’t be too tricky I imagine
G – Well, firstly you will need IT experts to deploy and manage the application. Secondly, you are handling important data, which will be accessed periodically, so you need to be sure about security, encryption, retrieval etc. Plus you don’t want the system to go down when people are traveling around the clock and using the application
E – In that case, we will let you manage it. But won’t that be more expensive for us?
G – Not really, considering all factors. Let me break it down in more detail………
We get this question every time, 99.9% of the time actually. Most of our customers evaluate On-Premise (OP) vs Cloud (CL) based solely on price which can be misleading. When you go with a CL based solution you get several things – flexibility, scalability, transparency, maintenance, On-Demand expertise etc.
And when it comes to price comparisons, CL can be cheaper than OP in some cases. Most companies don’t consider the TCO of an OP solution and therefore assume CL will be more expensive. Of course in some cases CL may be more expensive. But there are more facets to that discussion than a simple OP costs-divide-by-12-months and compare to a CL monthly rate. In some companies, there may be corporate mandates to use OP for all applications and that makes sense because price is not the sole reason.
For a more in depth analysis, see this article from CIO.com that captures the salient points very well –
Why organization of T&E data is as important as ever
One area that many companies struggle with is organizing of expense related data. This is especially important because stakeholders in these companies frequently utilize the data to observe trends, study patterns and take proactive steps towards improving the T&E process. We have guided our customers in this area to use best practices. Here are some anecdotal observations –
The lack of success with data organization & management can be broadly attributed to the following reasons –
Case 1) There are no defined structures – Many companies ‘toss’ expense data into one area. While this expedites the submission process initially, it becomes onerous at a later point when specific information is required. What’s more, without any organization, all T&E related data look the same. If there is ever a case for lack of T&E visibility, this one takes the cake!
Case 2) There are defined structures but no retrieval mechanisms – Here, companies define areas but offer no means to retrieve and analyze the data. This makes any front-end organization pointless because the end goal of analysis and fine-tuning of data cannot be achieved. While this is still a problem, it is better than Case 1
Case 3) Too many structures – The other end of the spectrum includes companies that have defined to many areas. While this may give an impression of better organization, it is really an illusion because of too much granularity. To arrive at meaningful conclusions, several areas must be analyzed concurrently. This makes it burdensome and error-prone. Then again, this is definitely better than Case 1 and Case 2
From these notes, it is very obvious that organization of data is very ‘company specific’. Different companies have different processes and procedures, sometimes even disparate, and therefore need unique solutions to manage this.
A big factor in this is human nature. If something is arduous and complicated, we usually put it off. This leads to forgetfulness, which leads to a mad rush during tax time or at the end of the year to get organized. The implications are huge and the penalties for not managing the data better are substantial. Companies frequently throw away millions of $$ due to –
– Failure to take proactive steps from T&E data on time
– Not realizing all the tax deductions before tax season
– Forget to bill clients because post-deal activities were not categorized
– Lack of spend visibility on runaway projects due to untimely data management
etc.
At Gorilla Expense, we assist our clients by first helping them define clear, non-redundant areas. Once this is done, specific advice is provided to create future areas carefully. Everything is defined based on how these areas are managed in the back-end ERP/Accounting systems. Since our application is extremely pliable, it can adapt to varying formats. Only after this is technology employed.
Using unique tagging & mapping mechanisms built into the application, come tax time or end of the year, our customers are fully aware areas of spend, steps for improvement, categories to monitor for the next FY etc. which are broken down further by customer accounts, projects, work-orders and more. Now that’s called successful T&E data management!
We are always interested in discussing your pain points and help in any way we can. Contact us at info AT gorillaexpense.com.