Tag Archive for: cost savings

You are here: / cost savings

Posts

The 10 Commandments of T&E Expense Reporting for the 21st Century

/6 Comments/in , , , , /by

According to the Aberdeen Group research, 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 ranging from 7% to 15% percent of the total budget for the average mid-market company ($50 million to $800 million in revenue), the challenge facing CFOs and Controllers in this area is dramatic with millions of dollars at stake! For most companies, travel related expenses remain a significant area of spend – second only to payroll.

Scope of challenge

Fundamentally, most companies struggle to tackle these challenges because of not knowing where to start, when it comes to managing their T&E Expense reporting process, resulting in thousands of dollars of reckless spending and waste. Aberdeen’s report (Expense Management for a New Decade and The Mid-Market Expense Management Program) says 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 reporting solutions and 28% integrate corporate cards

* Just 15% provide T&E data to C-level executives for financial forecasting purposes

Solutions for a new decade

The good news is that cloud-based solutions have significantly brought down the cost of automating T&E expense reporting. These solutions have been shown to deliver huge reductions in expense processing costs. But the big questions is – where do you start?

The Best-In-Class corporations (a term used by the Aberdeen Group to classify the top 20% of companies that manage their expense related processes by creatively blending technology & strategy) combine strategy, core capabilities, technology, a culture that embraces change and a desire to optimize. The objectives of most Best-In-Class programs include cost savings, enhanced productivity, improved efficiencies and better compliance. This is usually achieved by unifying the different processes in the lifecycle.

By advocating a culture that fosters Best-In-Class programs and by investing in a system that ensures achievement of this status, Best-In-Class companies constantly reap gains and realize immediate ROIs.

Here are the 10 Commandments of Expense Reporting that Best-In-Class companies consistently execute on:

1. Centralize the control and operation of T&E expense management programs

2. Automate the process to greatly reduce unproductive manual work and eliminate errors

3. Integrate the front-end expense reporting system to the ERP system to minimize manual data entries and errors (here is a video of automated integration with Dynamics GP)

4. Establish generally accepted corporate-wide policies and processes

5. Educate employees regularly on expense report related policies and processes and appoint a designee for any questions from employees

6. Encourage usage of corporate cards for better accuracy and mobile device applications for convenience to users (read our blog on Credit Card Integration)

7. Leverage and close the loop on expense management data to fine-tune the system and also provide better deals with travel vendors for the company

8. Develop audit mechanisms that capture errant data and provide real-time visibility into spend

9. Invest in the latest technology to maximize efficiency, provide long term ROI and reduce paper usage

10. Provide flexibility and convenience to the end users to improve productivity, reduce inherent delays and to capture expense data immediately after incurred

For some companies, executing on all 10 steps immediately might prove to be a challenge. In those cases, it would be beneficial to select a few and to focus on those, till the desired results are obtained.

Automating T&E processes does 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.

To read the complete white paper on ’10 steps towards best-in-class status for expense management’, click HERE

If you have any specific questions that we can help with or need more information, contact us at questions@gorillaexpense.com

Additional resource:

To calculate savings from automating the T&E Expense Reporting Process, click HERE

Savings From Secondary Travel Spend Categories

/in , /by

Carlson Wagonlit did a survey in November 2013 of 970 travel managers worldwide including 270 in North America. From the respondents, they found the top secondary spend categories that were critical to additional cost savings. Here are the results, with the top being ‘Roaming fees’ and the lowest cost savings coming from ‘Public transportation’ & ‘Parking’.

Spend Categories

How does this compare to your company’s cost savings on secondary travel spend categories? Send us your comments….

Two Sides of the Same Coin – T&E Expense Reporting & Payroll Integration

/2 Comments/in , , , , , /by

Here is a frequently heard request from Accounts Payable departments (AP) in companies around the world –

‘Can we integrate T&E with our Payroll system to issue reimbursements faster and error-free?’ And a very pertinent request at that – considering that AP is largely responsible for issuing T&E reimbursements.

A recently conducted survey, with results displayed below, showed that at least 74% of T&E reimbursements fall largely within the domain of AP. This becomes an additional burden to handle for AP among other important tasks. Plus, the ripple effects of delayed reimbursements or wrong reimbursements affects the heart of the business: the morale of the workforce. So it really is a no-brainer to automate this process through integration.

And this fits into the overall theme for companies in the 21st century which is – religiously examining ways towards becoming more efficient and effective at what they do. And on that list is frustration and delays with T&E reimbursements for employees after a trip. This is especially true after an international trip where the employee could have sizable out of pocket expenses with imminent due dates on their credit cards. Therefore integration of T&E and Payroll systems is paramount and companies are investigating in more detail on how to maintain a seamless integration between these two systems which are essentially two sides of the same coin.

 

Payroll systems look at an employee at one point in time, chiefly, what is that employee’s salary or hourly wage today. They automatically calculate net pay for a given pay period, federal, state and local taxes, deductions for such items as health care copays and contributions to charities etc. These systems also automatically cut checks to employees or have their pay automatically deposited into their bank account.

T&E Expense Reporting systems, on the other hand, help manage the employees expenses from a trip. If the company utilizes a corporate card, then the employee submits those expenses are part of the same system. The key pieces of the expense transaction includes details about the trip, expense type, vendor and mainly the receipt of the transaction.

The benefits of integration between these two systems are:

– Reduce reimbursement time

– No more manual keying of data in multiple places

– Utilize the existing flow and scheduling for T&E reimbursements

– Real-time visibility of reimbursement status for all parties

– And most importantly, the emotional aspect – employees expect the company to reimburse them for out-of-pocket expenses ASAP. And by automating the process as much as possible (which in turn reduces errors, delays and frustrations), it shows the employees that the company cares!

So how does this typically work?

 

The natural next step for T&E data after it has been reconciled in the expense reporting & ERP systems is sending it to the Payroll system. Think of it as ‘Passing the expense report data baton’!

Expense-Reporting-Payroll-Integration

Here is how it works in steps –

– Once the expense reports are approved within the Gorilla Expense web application, Gorilla Expense can automatically generate 2 files 1) Payroll file precisely in the same format as expected by your payroll provider 2) GL File precisely in the same format as expected by ERP System

– The payroll file can be imported into the Payroll system to issue reimbursement

– The GL file can be imported into the ERP system for GL entries

– If the Payroll system setup for T&E reimbursements is the same as payroll, then the employee will be reimbursed for T&E expenses during the next payroll cycle

Contact us at info@gorillaexpense.com if you have any questions or if we can help you manage this process more efficiently for your company.

The Big Debate – SaaS vs Licensing for T&E Expense Reporting

/1 Comment/in , , /by

Saas vs On-Premise

In the last few months we have received several questions from our prospects and customers related to deploying our T&E expense reporting application in a SaaS (Software-as-a-Service) model versus a licensing model. We are one of very few vendors that provide both options to customers.

While SaaS is quickly becoming the model of choice for many, there are good reasons to evaluate the licensing model as well. So how does SaaS really compare to the more traditional licensing model? Well, let’s review some of the typical questions and comments we have seen.

‘We are interested in subscribing to your SaaS model because it is cheaper than licensing it. Is this a valid statement?’

Short answer: Yes.

Generally speaking, an on-premise deployment through licensing requires greater upfront capital investment (CFOs typically amortize this cost as Capex) compared to the SaaS model. And there are several reasons for this – installing expensive hardware & software on-site, requiring resources and personnel to manage the hardware and software, ongoing maintenance expenses, upgrades, support fees and license fees. However with SaaS the company doesn’t have to allocate resources and personnel to manage the application. The additional charges for upgrades, hardware and administration fees are avoided and included in the monthly subscription. Customers simply have to login and go!

What are the benefits of SaaS and Licensing?

The SaaS model gives the buyer immediate business benefits with frequent updates, shorter deployment times and independence from having to maintain an IT team to support the application. There is also an easier adoption and more flexibility for end-users because SaaS vendors typically utilize the latest technology to include mobile apps, web based applications etc. compared to internal IT teams in end-user companies that cannot keep pace with vendors.

Licensing with On-premise deployments have typically provided more integration with existing IT and operational systems. But many SaaS solution providers (including us) now provide seamless integration with several systems. Also, there is always the risk  with management of data which might be easier to accomplish in an On-premise model vs SaaS. But then again, vendors like us provide customers with the option of sending them backed-up data periodically to alleviate any concerns.

SaaS or Licensing: which one is more flexible?

That depends – on the company, their operations, availability of resources and personnel and their goals in choosing between the two. Both hosted (through SaaS) and On-premise are scalable, easy to configure and have technical flexibility. However, SaaS is probably more flexible for the end user as there are no limitations in accessing it from anywhere with an internet connection through multiple mechanisms (web, mobile phone, tablet etc.)

Is SaaS still a risky proposition?

Licensing has always been the de-facto model compared to SaaS over the last several decades, at least. Hence SaaS is perceived to be more risky. And the main areas of risk revolve around impact risks such as loss of control, integration challenges and data storage being off-site. The risks with licensing a solution are more related to implementation such as deployment, support and training. And the risk can vary a lot and depends on the company’s operations and structure.

In conclusion, which model is better? Sorry, but there is no one single answer. It really comes down to the business objectives, goals and culture of the company. Some of our customers that have small IT teams have opted for our expense reporting solution in the SaaS model because it is much easier for them to manage. Other customers have opted for the licensing model because they wanted more control and some of them were bound by corporate policies to retain all technology applications and data within the company which is managed On-Premise. So the question really becomes – ‘SaaS vs Licensing: which size fits your company best?’

Additional resources:

* Very nice white paper on ‘On-Premise’ VS. Cloud-based solutions provided by GFI software – Link

* Educational video on Cloud Computing vs. On-Premise Solutions



Contact us for more information or if you have any specific questions we can help answer info@gorillaexpense.com

Finance Speak – ‘We lack visibility with our travel expenses. Please advise on how to tackle this’

/in , /by

(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

Travel Policy Benchmarking – by the GBTA

/in /by

The GBTA Foundation published a study on Travel Policy Benchmarking which was sponsored by Egencia, and Expedia Inc. Company. Here is a teaser of the report –

“Travel policy is the foundation of effective travel management. Organizations that implement and enforce travel policies can direct travelers and gain optimal value for each trip, and maximize returns from investments in travel. Organizations without effective travel policies lack the controls and information needed to optimize the value of their investment in business travel.

This report updates and expands the study of corporate travel policies and management conducted by the GBTA Foundation and sponsored by Egencia in 2010. The 2010 study clearly established the effectiveness of travel policy to help organizations minimize corporate travel costs. The 2011 study covers many of the same topics as last year’s survey, in order to track changes in travel policies and practices year-over-year. It also explores the way in which commercial travel buyers are grappling with the challenge of newly introduced ancillary fees and services. The objective of the two studies is to answer questions that many organizations have about travel policy, specifically:

• How their policies compare to the industry?
• Whether their travel policies are too short or too long, and whether they cover the right topics?
• If their travel policy strikes the right balance between the comfort and convenience desired by travelers, and
the cost control every organization needs?
• How are buyers changing policies in response to changing economic conditions?
• How are organizations responding to the fees for ancillary services that seem to comprise an increasing
share of airfares and hotel bills? ………………”

The full report can be found here

Benefits of T&E Automation

/2 Comments/in , , /by

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

/3 Comments/in , , /by

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.

T&E expense forecasts for 2012. How does it look?

/2 Comments/in , , /by

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 .