BRINGING ROI TO YOUR BOTTOM
LINE: COMMERCIAL CARD
SOLUTIONS & TECHNOLOGY
Sherry Hibbs, VP Sales & Relationship Management BMO Harris Bank
Robin Hanselman, Director Sales US West Chrome River
Stephen White, Director Corporate Sales Chrome River
September , 2014
Agenda Overview
1
CHROME RIVER EXPENSE MANAGEMENT
Commercial Card Best Practices
Sherry Hibbs – Featuring Statistical Information on Payment Solutions
2
Expense Management Technology Best Practices
Robin Hanselman & Stephen White – Featuring Technology Solutions
3
Q & A Round Table
Sherry Hibbs, Robin Hanselman & Stephen White
CHROME RIVER EXPENSE MANAGEMENT
Commercial Card Best Practices
Introduction
Sherry Hibbs, VP Sales & Relationship
CHROME RIVER EXPENSE MANAGEMENT
Management BMO Harris Bank
• Over 25 years of Commercial Card industry experience.
• Professional experience includes senior management
Commercial Card positions for card issuers - Citicorp Diners
Club, US Bank, JPMC/Bank One and Bank of Oklahoma
(BOKF).
• In addition, professional experience includes working as the
VP of Strategic Alliances for WorldTravel Partners/BCD
Travel (3rd largest global travel management company)
driving strategic payment solution alliances.
• Strategic selling and management experience in all
corporate market segments which includes Fortune 500,
large, middle and small market companies.
What are Commercial Payment Solutions
CHROME RIVER EXPENSE MANAGEMENT
• Types of Commercial Charge Cards:
– MasterCard
– Visa
– American Express
– Discover
– Diners Club
– JCB
E-Payables
Event Cards
Declining Balance Cards
Fleet Cards
One Card Solution
Travel & Entertainment Cards
Purchasing Cards
Ghost Accounts
Virtual Cards
Project Cards
Meeting Cards
Accounts Payable Cards
U.S. Commercial Card volumes are projected
to grow significantly faster than GDP
CHROME RIVER EXPENSE MANAGEMENT
25%
20%
15%
10%
5%
0%
2007
2008
2009
2010
2011
2012
2013
2014
2015
-5%
-10%
Commercial Card
GDP Growth
*Sources: Glenbrook Commercial Card Sizing, 2012; MasterCard Analysis, 2013
Page 6
The untapped Commercial Card opportunity
is tremendous in the U.S. and Canada
U.S. Middle Market Segment
CHROME RIVER EXPENSE MANAGEMENT
Canadian Middle Market Segment
Total
Spend
Estimate
$7.8T1
$1.0T4
Cardable
Opportunity
$1.9T2
$180B4
$121B3
$11B4
Only 1.6%
Only 1.2%
Carded Volume
of total Middle Market spend is
currently captured on card
of total Middle Market spend is
currently captured on card
Sources:1D&B, 2013; 2B2B International SME research, 2011; 3Nilson, 2012 & MasterCard Analysis, 2012; 4Kaiser Associates, 2012 & MasterCard Analysis, 2013
March 19, 2013
Enhanced Spend Analysis – Realign Forms of
Payment
Source: First Annapolis Consulting / Commercial Card Market Landscape February 2012
CHROME RIVER EXPENSE MANAGEMENT
Working Capital Management
CHROME RIVER EXPENSE MANAGEMENT
Travel & Entertainment Card
Best Practices
• Benchmarking Peer Groups
• Payment Method Analysis
• Air /Hotel /Car Rental Price Audit
• Rewards/Rebates
• Compliance
• Technology Usage
CHROME RIVER EXPENSE MANAGEMENT
The Value of P-Card vs.
Traditional Purchase Order Process
CHROME RIVER EXPENSE MANAGEMENT
Using a P-Card vs. a traditional Purchase Order process saves
almost $74 per transaction
$90.77
$73.53
saved
$17.24
Source: RPMG, 2012
Breakdown of the Value of P-Card vs.
Traditional Purchase Order Process
CHROME RIVER EXPENSE MANAGEMENT
Using a P-Card generates savings during the sourcing,
procurement, and invoice/payment/reconciliation process
Breakdown of Value of P-Card vs. PO Process
Source: RPMG, 2012
What can you expect from your card
provider? Card Benefits and Features
Strong Card
Acceptance
•
Customer
Service
•
Rewards
CHROME RIVER EXPENSE MANAGEMENT
Travelers and purchasing agents need
strong acceptability to utilize the cards.
Acceptance for B to B transactions.
Payment Terms •
and Liability
Options
Flexible payment and liability options
(individual and corporate)
•
Dedicated personal representatives tied
directly to your account
Customer service agents available 24/7
MCC/Supplier •
Specific Control •
Features
Ability to block and maintain for card usage
Support supply management requirements
•
•
•
Points to miles on major airlines
Customized reward capability
Unlimited redemption options
Fraud Coverage •
Included in cardmember and contractual
agreements
Comprehensive insurance to meet Business
Travelers needs
Insurance that delivers value.
Rebate
Opportunities
•
Travel Accident •
Insurance
•
• Financial considerations that will vary between
types of card accounts implemented.
• Payment terms, annualized charge volume, and
rewards participation factors in calculations.
•
Insurance that covers checked, carry –on,
and delayed baggage
ATM Access
•
ATM locations worldwide
CDW Insurance •
Free Primary Collision Damage Insurance
for car rentals
Delinquency
and late fees
•
Vary by card issuers
Airport Lounges •
Free access to Airport Lounges around the
world
Client
Relationship
Management
•
High touch field based service organization
Baggage
Insurance
Card Controls
MCC
Restrictions
Specific
Supplier Blocking
CHROME RIVER EXPENSE MANAGEMENT
This feature provides the ability to limit or block Cardholder
purchases made by Merchant Category Codes (MCC). This
feature has the option of restricting card usage to specific
merchant types such as hotels, restaurants or office supplies.
Ability to limit purchases to specific vendors and locations
or block expenditures by specific supplier and location. This
feature was developed at the request of corporate clients
wanting to maximize arrangements on blanket orders and to
allow high value transaction purchasing.
Protecting Against Fraud & Misuse
CHROME RIVER EXPENSE MANAGEMENT
All attempts to authorize a transaction on a card product pass through four distinct processes:
Card Validation
Physical
Evaluation
Card Blocking &
Controls
Early Fraud Detection
Evaluation
Card number and expiry passed through authorization system for accuracy, Card
Validation Code (CVC) is passed and evaluated, status of card (open, closed,
suspended) and available credit is checked. The authorization will be denied if any of
these evaluations fail and merchant may be asked to retain card.
Merchant requests Cardholder to provide identification to validate
authenticity
If authorization successfully passes card validation, authorization system recognizes
the commercial card type, and evaluates the transaction against any organization
card controls. The authorization will be denied if the transaction evaluation fails
any of the pre-set controls.
Authorizations undergo sophisticated review for indications of possible fraudulent use.
Many fraud systems are a stand-alone platform which receives
and stores real-time feed of transactional authorization responses and submits each
incoming transactional authorization to a comprehensive evaluation process.
Commercial Cards provide significantly less risk than other methods of payment
than an organization may have in place today.
CHROME RIVER EXPENSE MANAGEMENT
Data Enables Efficiency
76:00 Minutes
Enhanced data brings
significant efficiency to
your expense reporting
system.
17:00
35:00 Minutes
Overall Savings: 54%
20:00
7:00
11:00
8:00
6:00
28:00
Paper Based
Source: RPMG 2013
Time for clerical/accounting
personnel to reimburse expense
report and reconcile payment to
bank data
Time for clerical employees to
process and prepare an expense
report for payment
Time for supervisors to review
an expense report submitted
14:00
Electronic
Pre-populated
Time for traveler/cardholder to
fill out an expense report
CHROME RIVER EXPENSE MANAGEMENT
Expense Management Technology
Best Practices
Introducing Robin Hanselman
Director Sales US West Chrome River
CHROME RIVER EXPENSE MANAGEMENT
• Robin’s background is in Finance and Accounting where she
spent a number of years working as a CPA.
• After finding out how much easier the right financial
programs and technology can make life, she has spent the
last 15 years consulting and selling financial technology
solutions
• Technology platforms have included everything from ERP to
Investment Accounting and Accounts Payable automation
• Robin has worked across many different industries and is
currently specializing in Professional Services organizations
such as accounting, architecture, consulting, engineering,
and law firms here at Chrome River
Introducing Stephen White
Director Corporate Sales Chrome River
CHROME RIVER EXPENSE MANAGEMENT
• Stephen has over ten years in the spend management
space.
• Technology platforms delivered include Concur and Chrome
River.
• Customers such as Celanese, Waste Management, The
Staubach Company, Oxea, JC Penney and HQ Global.
• Stephen was hired by Chrome River in 2012 to help drive
Corporate sales growth. He currently resides in Phoenix,
AZ yet is ready to get back to his home state of Texas.
Best Practices Technology Differentiators
1
2
Simple and Intuitive to Use
3
4
Ease of Integration
CHROME RIVER EXPENSE MANAGEMENT
– User-focused design
– Completely configurable
Business rules engine
– Most powerful workflow
– Highly flexible policy configurations
– Financial Systems – enterprise data exchg
– Billing systems, Payroll, Projects
Broad Accounts Payable Automation Platform
– EXPENSE, INVOICE, PO, ANALYTICS
CHROME RIVER EXPENSE MANAGEMENT
Expense Management Technology Best
Practice #1: Automate Expense Capture
The Argument Against “Free”
CHROME RIVER EXPENSE MANAGEMENT
• A manual expense report costs between $20.18 - $51.35 to process
• An optimally automated expense report is significantly less to
process, ranging between $6.25 - $7.60
• A manual invoice process is between $14.04 - $16.67 per invoice
• An automated invoice is again significantly less
ranging between $3.34 - $8.32
Partially automated processes provide some cost savings but
significantly less than optimally automated processes
Source = PayStream
Advisors
Automatic Expense Capture - Example
CHROME RIVER EXPENSE MANAGEMENT
Simplify Receipt Capture
Snap and Send
CHROME RIVER EXPENSE MANAGEMENT
CHROME RIVER EXPENSE MANAGEMENT
Expense Management Technology Best
Practice #2: Have an Accountable Plan
What is it and why is it important?
CHROME RIVER EXPENSE MANAGEMENT
An Accountable Plan is an employee reimbursement allowance arrangement or
method for reimbursing employees for business travel expenses that complies
with IRS regulations.
If you cannot demonstrate that you have an Accountable Plan, expense
reimbursements may be considered taxable income and 1099s must be
provided to the employees incurring the expenses!
Basics of an Accountable Plan
CHROME RIVER EXPENSE MANAGEMENT
According the IRS:
1.The expense must have a business connection
2.Expenses must be submitted in a timely manner
3.Overpayment of expenses must be returned in a timely
manner
Accountable Plan - Further Clarification
CHROME RIVER EXPENSE MANAGEMENT
• An advance received within 30 days of the time the expense is
incurred
• Expenses are adequately accounted for within 60 days after they are
paid or incurred
• Excess reimbursements (anything paid over and above the allowable
amounts) are returned within 120 days
• An employee provides an adequate accounting of outstanding
advances within 120 days of receiving a periodic statement
Accountable Plan - Further Clarification Example
CHROME RIVER EXPENSE MANAGEMENT
CHROME RIVER EXPENSE MANAGEMENT
Expense Management Technology Best
Practice #3: Automate Policy Enforcement
Business Rules Engine
Configurable Expense Policies
Configurable Approval Routing Rules
Configurable Tax Rules, etc.
CHROME RIVER EXPENSE MANAGEMENT
Example - Built in Compliance Rules
CHROME RIVER EXPENSE MANAGEMENT
Example - Client Specific Compliance Rules
CHROME RIVER EXPENSE MANAGEMENT
CHROME RIVER EXPENSE MANAGEMENT
Expense Management Technology Best
Practice #4: Have a Clear Approval Process
Suggestions for Approval Process
CHROME RIVER EXPENSE MANAGEMENT
1. Consider roles and responsibilities
2. Consider how many levels of approval something truly
needs
3. Would some expenses be best suited for Pre-Approvals?
4. Where do you want Finance in the process?
5. Re-think your expense audit practices
6. Let the system do the ‘dirty work’ whenever possible
The Value of Automated Approval Workflow
CHROME RIVER EXPENSE MANAGEMENT
• Remember the Business Rules Engine at work?
• By automating the process, you can now have
approvals that are triggered by specific
compliance issues.
• This eliminates the need to audit 100% of 100%
• A much better use of valuable high-level
approvers’ time.
Consider Mobile Approval Methods
Approval on the go!
CHROME RIVER EXPENSE MANAGEMENT
CHROME RIVER EXPENSE MANAGEMENT
Expense Management Best Practice #5:
Go Green - Eliminate Checks
Streamline your Payment Process
• Direct ACH payments now the norm
– Less potential for fraud and duplicate payments
– More efficient, less work for A/P
• For BOTH employee reimbursements and vendors
CHROME RIVER EXPENSE MANAGEMENT
Other Benefits
CHROME RIVER EXPENSE MANAGEMENT
• Cost savings
– No more paper checks and manual processes = savings
• Efficiency
• More timely payments
• Enhanced Compliance
CHROME RIVER EXPENSE MANAGEMENT
Expense Management Technology Best
Practice #6: “Leverage your Leverage”
Through
Analytics and Reporting
Some Key Reporting Metrics #1
• Analyzing spend by Expense
Category
BENEFIT – negotiate
preferred relationships with
vendors
• Aggregating expenses associated
with Business Development or events
BENEFIT - meaningful insight
to ROI of these activities
CHROME RIVER EXPENSE MANAGEMENT
Some Key Reporting Metrics #2
CHROME RIVER EXPENSE MANAGEMENT
• Analyze Expenses by Client or Project
BENEFIT – Determines the ROI of a fixed fee project.
Some Key Reporting Metrics #3
• KPI’s can be created on Open
Approvals or Aging
BENEFIT – Remedy bottlenecks
in reimbursement cycle time
•
Compliance reporting
BENEFIT – Can help spot
individuals or groups that are
at higher risk for policy
violations
CHROME RIVER EXPENSE MANAGEMENT
CHROME RIVER EXPENSE MANAGEMENT
Q&A
Round Table
CHROME RIVER EXPENSE MANAGEMENT
THANK YOU!
Sherry Hibbs, BMO Diners Club/MasterCard
Robin Hanselman, Chrome River Technologies
Stephen White, Chrome River Technologies