Second Annual Expense/Payment Manager Survey: Corps. Automate Expense, Payment

Three expense managers and a travel buyer this month discussed expense reporting processes, automated reporting tools and integration between payment systems, employee expense management and travel with BTN editors. Participants were Larry Bolsch, director of expense processing for the Americas region for Credit Suisse First Boston; Nacion Colly-Triplett, T&E accounting manager for Georgia-Pacific; Robert Mendence, finance manager, and Suzen Moye, senior travel manager, both with Applera.

BTN: What efficiencies has expense reporting automation helped you achieve?

Nacion Colly-Triplett: Automation improved our turnaround time in processing alone because the paper trail has been eliminated. Receipts aren't stuck at a manager's desk before going to a check-request process. When we had a paper-based system, it would take up to 12 days to process an expense report. Today, with the automated process, it's less than one day. Because we have the electronic prepopulated data and the automated workflow, an employee can file an expense report and within 10 minutes the manager can approve and load it to the database for payment. It's sped up the time required to process. Automation also helped to reduce headcount. We went from 15 full-time employees when we were fully manual to six. You still need auditors, you still need your administrator. Automation also has helped improve customer satisfaction, compliance and mandate issues. It's been a benefit to the company and a benefit to our customers. It's the only system used enterprisewide, by every traveler throughout the country. We take great pride in that.

Robert Mendence: There's been a lot of improvement from automation. Some, never in our wildest dreams did we think we'd come to. When we rolled it out, I asked for 30 field-based employees to be part of the beta test group and about another 30 from office locations. I ended up with about 120 field people, because they told a friend who told a friend and so forth. They started telling us what rules were good. After a week, they wanted to use it right away. People who worked out of their house or in the field told me they used to wait up to eight weeks before they were reimbursed. They saw that this speeds it up. Needless to say, very rarely did we achieve a rebate with our previous system. Now, our rebates are on target because of this automation. We have the credit card data prepopulated. We see all the charges. Our policy is to submit for processing within three weeks of the charge being incurred. After 14 days, we send a mass e-mail for those with any charge that has not been submitted. We would not be able to have that without automation. At the end of the month, we get the statement with all delinquencies, but, by then, it's too late. You need to do something beforehand to prevent delinquency.

Larry Bolsch: At Credit Suisse First Boston, we've been using the Concur System for about seven years, which replaced a paper-based T&E voucher reimbursement system. It's helped us tremendously in cost-cutting initiatives, reducing headcount, streamlining the workflow. We've seen headcount reductions across the board, not only in the accounts payable function, but also in business units where people were preparing claims on paper vouchers. I still have a challenge, since we do a lot of global travel, with value-added tax reclaim. You still need the original receipt for your VAT reclaim company to reclaim that money. It has really improved not only turnaround time—going from a 10-to-30-day process to two to five days to prepare, submit, approve and pay the claim. It's helped on the return process—when returns and rejected claims need to go back with an out-of-policy submittal. It's not being mailed all over the place. It's all online.

We tie in our Concur system to direct feeds from American Express, and also, on the back end, we use Business Objects to do some of the audits. We were very successful with Sarbanes-Oxley as well. I take pride in saying I've fared well with internal audit, which is sometimes a challenge. We've passed our past couple of internal audits. It's helped on every one of those things as well.

BTN: Has reduced headcount taken a toll on the auditing process?

Bolsch: As we've reduced headcount, the system has been modified so that the flags are there. The employees now are trained properly. We audit if a flag appears, whether that be a dollar threshold or something like that. Because of that, we've been able to reduce our audit sample. Over the past three or four years, I've gone from a 75 percent audit down to anywhere between 40 percent and 60 percent. If we increase the threshold and reduce the population, we still find the same error rate. We're able to justify reduced headcount and reduced auditing by the fact that we're finding the same dollar amounts.

Mendence: We only audit 10 percent, and they find very little in the 10 percent. They find more by going outside and looking for it. For example, anything classified as miscellaneous over $50, we take a look at whether it's been flagged for audit or not. If you look at the report, the description and what's on there, you can decide whether it's questionable and whether to kick it back. We have about three pages in a Word document for return scripts—our standard scripts for why we send it back. Since we were consolidating five business units into one, it took about 18 months to fully roll out. What they did in one area was different in another. We had seven people processing in a manual Excel format in SAP. We didn't reduce headcount, we realigned. I have one full-time, one part-time processor working on expense reports. The others were assigned to something else. I have one person who does nothing but audit: our compliance officer—and, yes, he is an officer, a sheriff—does the auditing and sends out the "friendly reminders" to employees.

BTN: Do you have one global process for expense reporting?

Bolsch: We do use our system globally. We have a couple of pockets of smaller offices in the Asia/Pacific region and some of our European countries where it's not in place yet, because the PeopleSoft system accounts payable system and the total ledger package is not in place. We want to put that in place before we roll out the entire expense package. We're live with Concur as our tool in probably 85 percent of our environments. We use PeopleSoft as a general ledger package and the accounts payable module is connected to that as well.

Mendence: We just handle U.S. T&E. We're working on global right now, but that's been put on the back burner for another five or six months. We use Concur in the U.S. for our T&E cards, procurement cards, meetings and ghost cards and we just added Canada. We have the full package: the credit card prepop, which automatically creates the expense report and brings the charges in and maps it to the correct expense type. They fax in their receipts and it's electronically imaged. We're proud of our SOX testing. Our auditors spent an hour and a half and they found no exceptions.

Colly-Triplett: We've been using that system since about 1998. We've given a lot of feedback and input to get the product where it is today. We just kicked off a global reporting system pilot. We're scheduled to begin the global rollout in 2006. The reason for upgrading is to capture global cardholder data and have more integrated expense system data. I manage the expense reporting side and the corporate card side.

BTN: What projects are you working on right now?

Colly-Triplett: We're looking into receipt imaging to move into a paperless expense reporting system. We envision that this will also reduce delinquency payments with the card. Employees will have access, as will auditors and internal managers. We've been testing and retesting since June.

Mendence: We just finished rolling out three new databases to accept card data into the system. T&E is kind of stable now—we've seen good results from employee education. The next project is accounts payable automation, so that vendors can use an optical character reader to read an invoice and know to which business unit it goes, assign the cost center and automate processing so the vendor can see the status of their invoices. That would stop the phone calls.

Bolsch: We're going through an upgrade to streamline the workflow and eliminate paper. We're working with the travel department on e-invoicing and electronic hotel folio packages, which will help cut down on paper. We are rolling out in five or six different locations AP, GL and the Concur module so we can eliminate paper.

BTN: What is the relationship in your organization between those who handle expense management and those in the travel department?

Suzen Moye: I'm the travel manager for Applera. Three years ago, I was asked to put together a program through purchasing for airline and hotel. They had card in place and agency in place. When we reviewed the agency and card, my charge was to put together an integrated program using as much technology as we could.

That's when I met Bob, a great help on the technology end of it and a fabulous project leader. We wanted to add the expense reimbursement system. We had online booking at that time, too. Bob put together the expense piece and we integrated the whole program and launched it all together nationwide online, called TravelSmart.

There wasn't really a formal travel manager or T&E expense manager prior to that. I've found that T&E compliance makes my job easier. We had those rabble-rousers in the beginning who worked around the system and Bob took care of them simply by telling them they won't be reimbursed. The expense reimbursement system certainly helped the travel program. When I walked in, we had about 40 percent to 45 percent compliance. We had a great travel policy, but we needed compliance. The addition of online expense brought it up to 99 percent compliance.

Bolsch: My department handles the corporate card program, and the rebates that we achieve stem from managing delinquencies. My team likes to watch closely to make sure people are paying their bill on time. We've become very compliant—99 percent of the spend goes through in policy. Eighty percent or so is through the corporate card, with the remaining spend being maybe cash for tips or late night meals or whatnot. We've been able to very closely report through Concur and Business Objects what the travel team needs to negotiate for hotel, airlines and the rental car.

Colly-Triplett: We work very closely with travel. We provide all the statistical reports that travel utilizes when negotiating. We also provide the monthly compliance report. That includes use of the card, which we mandate for car, hotel and air travel. We have about a 90 percent compliance rate. It may have improved some over the years because our previous bank issuer provided a lot of the reports for vendor negotiations and compliance. Now, we have the opportunity to provide that in-house.

BTN: How important is linking your expense system to accounts payable, HR or booking systems?

Colly-Triplett: We've definitely integrated with the payables system. The whole electronic process feeds into the accounts payable system, which in turn feeds into the general ledger system, creates the output files for payroll reimbursement as well as the payment to the bank. We're already integrated with HR in that we use payroll. We're also integrated with the online booking tool but that's very simple.

Bolsch: We're not linked hand-in-hand to the HR systems, but we are linked from Concur to PeopleSoft to accounts payable, so that process is straight through from end to end. Every employee has an HR ID number. We have 20,000 employees globally, about 10,000 here in the States. We do get feeds from HR to dump into AP, Concur and travel booking systems. Not all feeds are automated. There is some intervention, but it is very important that HR, travel and AP and Concur all use all the same employee data in our roles. This enables us to report between our groups when required.

If an employee decides to leave or is terminated, we have an HR process where I'm notified. I also see if there's any money due back to CSFB for airline credits, because our airline credit report is linked to the Concur system. We've reduced our write-offs by about $200,000 over a period of three or four years. Now, we're down to $5,000 in write-offs and, again, that stems from the guarantee we have to pay when someone decides to leave. We go out and seek reimbursements from employees. They may have a credit on their Amex for a trip they didn't take but vouched for it through Concur before the trip was taken or a leg of it had changed.

Mendence: Every Thursday night, we take a feed out of our SAP system into Concur and CTO and we'll update for approving manager changes, cost-center changes, adding new employees, reissued credit cards. We take that information and update those systems. We also feed back to our ADP payroll system on a weekly basis and through the bankcard to pay weekly and then back into SAP general ledger system. Everything is all linked. If someone is terminated today, SAP sends out an automated notification to all the managers in the corporate services department so we can shut their cards down, shut off their access to CTO, to the expense system. We look at their account online to see if they have an outstanding balance and we advise payroll to deduct that from their final check. We have no more delinquencies for termed employees. It took a while to get that through.

BTN: What is your dollar threshold for when receipts are required?

Mendence: Twenty-five dollars is the limit regardless of the form of payment, I don't care if it's on the corporate card or not.

There are a couple employees who have certain limits because of past trends. They need to fax all receipts, even under $25. It's amazing how a $20 cash lunch all of a sudden becomes $7 or $8 on a corporate card.

Bolsch: We are $20 per individual item, but $100 per claim. If you have five items at $20 per claim, you're going to need to have all the receipts. You can't have $100 in non-receipted claims on a report. Then, people will send in five different reports for $19.

Colly-Triplett: We only require receipts for hotels over $75. For travel meals, ground transportation and other expenses, we do not require receipts. However, if you use cash, we require all receipts. My auditor sent me an e-mail last week about areas where people file just under that threshold because a receipt is not required. We're looking to select expenses for post-audit review. We audit 30 percent on a prepayment basis. On post-audit, we do about 4 percent. This is the post-auditor who brought this to my attention.

BTN: Imaged receipt systems have become more common in recent years. Are you using that?

Mendence: We do have the Concur imaging and the IRS says the best available copy is the official copy. We had to advise people to throw away their receipt except for foreign travel for the value-added tax reclamation.

We also have a customized field in the system where the employee indicates if they have traveled to a foreign country. At the end of the month, we run a report of the all foreign travel and contact employees to remind them to send in receipts for value-added tax reclamation. When travelers click to submit their report, another message comes up to print their bar code and fax their receipts. Receipt imaging has worked wonderfully. Although in the beginning, when one receipt was missing you would have to refax the whole shebang. Concur customers told them to add an append feature because people are faxing 40 pages and some people have fax machines that limit them to 10 pages. They added the append feature and now people are able to fax in.

Bolsch: We're upgrading Concur as we speak. We're looking to customize it a bit more with imaging, scanning and better workflow.