Time & Expense Accounting Webinar
This Time & Expense Accounting Webinar video is from the Proformative webinar "T&E Expense Management" held on August 7, 2012. The webinar features a presentation from Katherine Sullivan, Senior Director, Concur.
Time & Expense Accounting Webinar
Katherine: "As John noted at the beginning of the call, I've had the honor of working at
savings and ROI.
Corporate travel has long been considered an accepted cost of conducting business. In fact, expenses related to travel and entertainment encompass 8% to 12% of the average organization's total budget. With this significant level of corporate resources attributed to this complex spend arena, it has become critical for organizations in 2012 to approach expense management with next generation strategies and solutions which ultimately ensures that they are driving value from the T&E category.
Top-performing organizations are reporting that they automate their T&E expense management they see. With that, they're seeing 60% lower expense processing costs than other companies. As evidenced through Aberdeen Group's research study, technology plays a pivotal role in the modern T&E expense management program. However, when looking at how next generation capabilities will affect the landscape of solutions within the expense management space, Aberdeen Research has discovered that the cloud is targeted as a long-term solution within the average organization's expense management technology road map.
In looking at the future of expense management technology, the vast majority of organizations are expected to leverage either a cloud-based solution, or a hybrid mix, which is a cloud and on-premise solution. This directly reflects the next generation aspects of T&E expense management over the next decade. Organizations will look to the cloud for simple, accessible for all travelers and executives and as well as the real time components of analytics and reporting.
John: Okay. So, nothing like jumping right into the poll questions quickly. I'm going to go ahead and launch the first of two poll questions that we're gonna do right in a row here. Once again, if you're here for
votes came in. So we'll give about 45 seconds here.
I see questions coming in from the audience already. That's great. Some of them are clarifying questions, some of them are questions for the speaker in Q&A. Just feel free to add your own questions at any time. They're anonymous, so don't worry. We won't put your name out there with your question, and we'd love to see them so we can get them answered.
All right, at this point, I'm gonna close this poll question and we're actually gonna go right into the second poll question. We'll give another 35 or 40 seconds for this one. This one's really easy. Just tryin' to get a view of where folks' heads are at on this.
Once again, if you're here for CPE, you really need to take this. If not, we'd still love to see what you have to say here. I'll leave this open for another five seconds and then, we will get right back in. Okay, at this point, we're gonna go ahead and close this down and get right back to Katherine.
Katherine: All righty. Thank you, John, I appreciate that. Excellent.
When companies leveraging an automated end-to-end travel and expense management solution, they're able to see immediate benefits over companies without an automated solution in place. The Aberdeen Group T&E expense management 2012 research reported these companies saw significant value. As you can see here on the slide, these companies were seeing that their expense processing costs were decreased by 50%. The time to complete a single
Editor's Note: Take a look at the Proformative library of recorded webinars, which include videos on topics such as Corporate Controller Webinar, Chief Revenue Officer Webinar, Compensation Negotiation Webinar, Investor Relations Analytics Webinar and Automating Financial Consolidation Webinar.
When companies choose to automate their travel and expense management in the cloud, they are reporting additional benefits, such as, let's see here, if this will advance for me, all righty. So, as I was saying, when companies choose to automate their T&E expense management in the cloud, they're reporting additional benefits, above and beyond what you saw in the slide before with those stats. When they've gone to the cloud, they're noticing an additional 27% lower expense processing cost than users of an on-premise solution, 22% higher rate of compliance to the corporate travel policies and guidance and 22% higher rate of business travel spend under management. These companies that manage travel and expense from the cloud are able to lower their cost and increase compliance because it's easier to follow policies when they are easily accessible via mobile devices.
Regardless of the level of travel & expense automation taking place, when the Aberdeen Group took a look at the top expense management priorities of executives last year, 57% of them were concerned with getting more value out of business travel. This issue is huge for our customers. We work with so many of the Fortune 500 companies and, for them, business travel isn't going away. Nor do they want it to. They just wanted to find a way to get more out of it.
The Aberdeen Group used three key performance metrics to distinguish the best in class from industry average and lagger organizations. The three key metrics used in the survey were, one, compliance to corporate policies concerning T&E, two, business travel spend under management and, three, the cost to process an expense report. Now, when thinking about the cost of that expense report, it includes costs from processing regarding the accounting, auditing, report creation, review, approval time, etc.. So, it really is all-encompassing cost.
Best in class organizations in the T&E expense management research study are noted for their superior performance across three major metrics and their advantages over all of the other companies. These top-performing organizations have driven 60% lower expense processing costs, experienced a 43% higher rate of business travel spent under management and achieved a 31% higher rate of company corporate policy compliance. Now, this represents the top 20% of the companies that were surveyed. As you can see on this slide here, what they're seeing is 90% compliance, 85% control and the cost averaging about $7.91 per expense report.
The middle 50% of the aggregated performance scores are part of industry average category. Not necessarily terrible here, but there is definitely room for growth and improvement in this category. They are getting close to the best in class and, in most cases, they only may need a few tweaks to take their performance to the next level; such as, using the cloud-based solution or utilizing mobile devices. What you can see here is that 77% compliance to corporate policies concerning T&E are in this category. We see 64% business travel spent under management and the average cost of about $17.87 to process a single expense report.
Now, in the lagger category, this is the bottom schedule of the best in class maturity framework for Aberdeen's survey. These are the bottom 30% of the aggregated performance scores. A tremendous amount of change is needed for these companies. For example, typically, these companies are using a manual based process that involves a lot of paper and a lot of touch points by a human. In addition, they're also not using mobile technology and are not utilizing the
Now, in this category, you can see here that 40% compliance to corporate policy concerning T&E is in place, and that they're looking at about 19% business travel spent under management. Here, to me, is really telling. When you look at the actual cost of these expense reports, with all these manual touch points, is approximately $25.72. Pretty significant difference between the best in class, which was at a cost point of about $7.91.
Now, I'd like to share with you a case study of a client that went from a manual-based process to a completely automated travel and entertainment expense management process with Concur.
Educational Data Systems is a training company headquartered in Dearborn, Michigan, and, basically, had simply outgrown their manual expense management system. Reconciling corporate card statements with expense reports, tracking down errors, keeping track of receipts and processing reimbursements had become inefficient and very time-consuming. Employees basically spent hours . . ."
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