Futureproofing for Financial Disruption: 3 Things to do Right Now, An SAP Concur Podcast Conversation with TCG Consulting
Having a plan for financial recovery, without sacrificing employee productivity or risk, is paramount for your organization to prepare for the next disruption. We asked Jason Grunin, Senior Value Consultant for the Value Experience Group at SAP Concur, to explore the top three financial considerations that organizations should be evaluating right now with subject matter experts Jim Coufal, Senior Principal and Advisor, and Edward Curtis, Associate Director, of TCG Consulting. Listen to this podcast for tips on how to help your organization both prepare for recovery, as well as be ready to tackle the next disruption.
Hello, I'm Jason Grunin, a Senior Value Consultant in the Value Experience Group here at SAP Concur. I've been here for about two years, and prior to that, I was responsible for efficiency, accounts payable, T&E, and initiatives for a higher education institution.
One of the goals of the team I'm on is to share best practices and help customers maximize their return on investment with their employee-initiated spend program. Today, I have with me Jim and Edward from our partner, TCG Consulting. Jim and Edward, would you like to introduce yourselves?
Sure, Jason. My name is Edward Curtis and I'm the Associate Director for TCG's Expense and Invoice practice. I've been with TCG Consulting for almost two years now and prior to TCG, I worked for two of the largest expense management systems software suppliers in enterprise implementations. So today, I manage our team of global certified implementation resources, who help our customers implement, optimize and manage their SAP Concur systems. I'm joined by my colleague, Jim Coufal. Jim, would you please introduce yourself?
Sure, thanks, Edward. Hi, my name is Jim Coufal, I'm a Senior Principal and Advisor for TCG in the areas of travel meetings, payment, and expense with an emphasis in spend management. I provide subject matter support for integration of payment systems and expense managements with the goal of really minimizing total cost of ownership for travel meetings, payment, and expense.
I've acquired most of my knowledge over the 30 years in the industry supporting our global clients in over 110 countries and many different market verticals. I'm looking forward to our discussion today and excited to talk about employee-initiated spend and how the spend management solutions can help manage that.
One of the areas is the miscellaneous category and I think everyone who is probably listening to this [podcast] cringes when they hear that "miscellaneous." Because we know that if a traveler can't find the expense, or a non-traveler and non-traveler type expenses, they'll book it into the miscellaneous.
And then the other happens, if you don't have a “miscellaneous” they're going to put it somewhere that looks like it might be the right category and it might get misclassified. So, the challenge around that is to really find that balance and how do you get to that.
The other portion of this applicable to the purpose of the podcast is, and what can be done in the next 90 days or the near future in terms of managing some of these types of expenses. And as we get into the holidays, one of the big ones is around spend categories where gift cards might tend to increase. And so, from an audit perspective, where would you look for that and how would you do that? Some of the areas that tend to creep up over the holidays are for example, Amazon charges getting booked to office supplies, postage, Starbucks cards into meals, Best Buy cards for office equipment.
A lot of airfare possibly during the holidays, is that really business or potentially some personal travel accommodate to be mixed in there. Accommodations over the weekends and holidays. Rental cars in your holidays, personal mileage, air for hotel and rental cars.
The way that auditing and what you're looking for may need to adapt during these periods of time. There's the payment system, corporate card reports that could be reviewed. You could look at age transactions also to make sure that everything's being put through before the year-end. As well as we mentioned there in the expense solution, you could see Saturday night stays as well on corporate card programs and then any department store or jewelry purchases.
And so how do you manage that? So, taking a review of your policy, but also of your expense types and categories in the solution or in the spend management solution. Do you have the right balance and how do you review that? Part of it will depend on the type of spend.
So, for example, starting with the P-Card non-travel expenses, those typically would have more granularity to them in terms of how they're categorized in an organization. Also, the type of user who has those P-Cards for example, are usually someone in a capacity that would understand the categories from a procurement perspective, for example, or an accounting or office management where they're more trained in the use of those and therefore the level and the number of expense types for that tend to be and can be a little bit higher to get more granularity.
But on the contrary, when you get over to the travel side and you have your employee base that's traveling and they're not accountants, and you're really wanting to be able to categorize their spend and account for it accurately, that balance there would tend to be fewer expense types, but enough that you don't have them putting it in inaccurate categories.
And there's that ever-surrounding question about that miscellaneous, do you have it, or do you not? And so, the idea behind that would be to monitor an expense category such as miscellaneous to understand what's actually being booked to that. And that will help you determine if you need to be adding more expense types.
So, if you're seeing constantly, for example, some at home office expenses that are being booked in there now under the new COVID, that might be time for you to actually add those as expense types. And maybe you have an expense type called "home office expense," and you have a policy that revolves around that.
So point to really this is, there is a balance that you will eventually feel is correct for your organization, but our recommendation would be that you err on the side of simplification because the more categories you have, the harder it will be for employees to actually accurately identify these expenses, but yet you want to balance it with the controls and compliance that you need from an organizational perspective, to manage the spend and to maintain the compliance based on policies.
Jim, you made a great point. I recently worked with a customer who has a global presence and they started evaluating their gift card spend. And ran some reporting in their travel and expense program and looked for the "gift" or "card" in any of the comments. And what they identified was over $150,000 in spend across 12 different expense types.
And once they started looking into that, they realized that their employees were really confused as far as where gift cards should be charged, if it was even appropriate at all. And making sure that attendees were being required for those expense types where they are appropriate. And so, again coming back as we think about coming towards the holidays with get togethers being more limited, take a look at your program. What are your employees faced with if they were trying to expense the gift card and where would they put it?
Thank you. Final comment on that would be the configuration of the spend management solution. So, on certain types of expenses and I'm going to go back to that "miscellaneous" require a comment. So that you do have that ability to mine some of that data later, like you just described and some other areas. Take a review to see if you've got attendees attached to the right expense category. Sometimes they might be inappropriate as well. So, it's also is a good time to take that review, especially post-COVID as we'll anticipate volumes to increase. Now is the opportunity to actually make those changes while you can manage that and then be ready for hopefully the return of our travel and our spend.
Thanks, Jim. Our next topic is around mobile adoption and employee experience. And I'm sure many of you listening in are probably listening from your iPhone or your Android, perhaps even your work computer. But nowadays, as you think about the business traveler, the business employee who does not have a smart phone? Everyone is really, in some ways, good and bad, attached to the hip more so than the old days where you wore a Blackberry.
But if you about that and think about your organization, how would implement mobile-first approach? How do you make the tools and technology that your organization adopts in the hands of your fingertips of the employees that are using it on a daily basis?
Some of that really revolves around having integrated platforms. Thinking about how many different applications and mobile apps do users want to load on their phone? They really don't want tens of pages of apps. They want simple, simplistic apps that do the job that they need in the amount that is less time-consuming and they can get off their phone as quick as possible.
So that mobile-first approach really thinks about an integrated platform. Having simple-to-use expense types. Balancing back what Jim was just talking about. You want to have the appropriate amount. What is a number that works for your organization? Does your tool book it all? Does your tool do it all? Can you request pre-approval for your trip? Can you book your trip? Expense your trip, manage your card expenses and then confirm that you received reimbursement for that item?
When platforms are disconnected, it requires multiple apps. It requires more training. It requires more engagement with internal customers which can be time consuming and leading to a poor employee experience. Thinking about that from an approver perspective, same thing. What is the role of the approver from a mobile and from an employee experience perspective?
Are they your trained auditor? Are they there to simply say, yes, Jason took this trip and it's authorized? Are they there to be reviewing the cost and accounting sub strings attached to that trip? If so, that's probably not something that the user is going to be able to do easily on mobile. And you want to have those clear and separate boundaries for what your personas are on the mobile application.
The other thing to consider in your organization is, do mobile phones, are they available to all classes of employees? Is it fair and reasonable and even potentially regulated? State and federal regulations may even dictate or require the employer to provide a mobile device to that employee if they're using it for a work benefit. Thinking about HR, tax implications and fairness to all classes of employees.
Does everyone who travels have a bring your own device policy? What is your mobile reimbursement policy for employees? I know as running an organization prior to joining Concur, my employees were expected to have a mobile phone. It was part of the job. It was part of their on-call status. And in that case are their compliance in HR policies that need to be considered?
Jason, do you see a difference in an organization across different types of users? For example, let's use the newer, younger employees that are coming in versus some of the more established employees who have been with the organization longer?
Yeah, definitely. That makes a tremendous difference on the expectation of coming in. So, an employee coming in just fresh out of college or in the tech industry is going to expect to be able to do everything on their mobile phone. They're going to want to be able to take a picture of their receipt, match it straight to their expense report and not even think about it again. The idea that they even take a printed receipt.
So, looking at application partners where my Uber receipt can flow straight into my expense report and I don't even have to forward it or take a picture, it's become an expectation in some generations because they don't want the paper receipt, they walk away without it. And then all of a sudden now you're faced with an audit problem in certain environments. Did that transaction really happen? How can I encourage my mobile users to just snap a picture and then walk away from the transaction?
Yeah. Jason, that's a good point especially with the mobile, but in general you mentioned about the auditing and the employee responsibility. What's the threshold or the trigger level, for example that you would think or want to recommend organizations to consider?
So, it really depends on the payment type. So, if your organization has a corporate card platform and depending on this locale of where your organization is based. Whether you follow the US Internal Revenue Service Policy of all expenses greater than $75 must have a substantiation, some organizations I've still seen have the $0. You have to have a receipt for everything.
And at what cost to your organization in reviewing a $5 taxi receipt, does that really add value to that person's time? And really, it's a form of payment, expense type thresholds, whether it's a invoiceable expense report, all of those things should factor into your policy on whether a receipt is being required and how the user can then streamline that process.
Our next topic is regarding new behaviors in spend. And are we listening, in our organization, to our employees? Are we connected in our industry and are we doing it right? How do know if we're in touch with our community? And I think COVID has been a good reminder for us to maintain that type of relationship in our organization. And to be cognizant of our employees and their behaviors. And the changes that are occurring in those behaviors.
Prior to COVID, we've had other disruptions in the industry. As I mentioned in my introduction, I've been doing this for a while now. And I can recall like September 11th, we had the volcano over the North Atlantic that shut down all the travel over the North Atlantic. We've got COVID now.
So, have we learned from these previous disruptions? I think we have, but going forward, especially from COVID, I think there's changes that are coming in the industry around duty of care, watching quickly and being able to shift according to travel regulations especially at least now in our COVID scenarios where every day borders are opening and closing. And how do you keep track of that? How do you stay on top of that? So as our travelers in the next three months hopefully start to travel again, are we ready? And are we able to help manage that for them?
So, listening to what they need or staying current in the industry to actually be able to provide tools for them to be able to know what those requirements are if they're traveling internationally, for example and they're going between two countries, because it's a very complicated combination.
If you take all the countries combined with all the other countries, they're all very different. And so managing that is essential going forward and helping our travelers understand that. But what's the financial impact as well? And how are we manage that? I think with COVID we found a lot of unused tickets all of a sudden. And for companies who may have learned from the volcano or September 11th, they were hopefully being able to manage and track these through the spend management solution or the online booking tool to be able to identify these and reapply them or request refunds for some of this travel as well.
And then how sustainable is this going forward? Are we ready and able to provide this on an ongoing basis and are we building this into new policies and procedures for example? And our recommendation is if you haven't done that, there's still time.
As we see today with the new Omicron variant, just as we think we're coming out of it, we're going back in again. So, it may be a little bit longer before we start getting our normal travel patterns back. So, our recommendation is using this time. If there's a created time in your scheduling to be able to really focus on the structure of the program; reaching out to your peers in the industry, but also within your own organization, making sure that you have a stakeholder team that's involved in the different components of the travel meetings, payment and expense, and that you have that structure and infrastructure in place that allows and empowers these different areas to basically make decisions at the time of these events and that the company can then be proactive and not as reactive when some of these occur. And there will be the next one, whatever that is. Our goal would be to be able to minimize any disruption and any costs to the organization.
So, Jim absolutely relevant. So many of those events just bring back so many memories of frustration and panic. So how can we be ready for and insulated from the next disruption that comes our way?
I wish we had a crystal ball, we don't. But what we do have is planning and proactive reaction to what we've learned from other events. And as I mentioned, for example, the North Atlantic shutdown or September 11th, we learned things then that we applied now for COVID. So same with COVID, being able to take what we've learned and make sure we apply it into our program because you'll never be completely ready. Because you don't know what that next disruption is going to be.
But at least you can minimize the impact to the organization by having that infrastructure in place and a plan, just like any other disaster recovery in the event of any kind of disruption. With that, I'm going to move this onto the next topic that Edward's is going to take, which is future proofing our travel program from disruption. How do we prepare for future disruptions, so we don't have that great of an impact?
Great. Thanks, Jim. So, as you look at, how do we prevent having as massive disruption in the future when hopefully nothing like COVID happens again, but if there is something else that does happen, how does it not have as great of an impact? And I think the first thing to realize is that many of the changes in travel and expense for companies that came about during COVID will actually be permanent, and they're not just temporary.
So COVID brought to light many deficiencies within organizations especially around process and workflow. As we hopefully reach the light at the end of this COVID tunnel, it's important we future proof our travel and expense programs from these future disruptions, no matter what type, whether it be a September 11th tragedy or a volcano explosion or some type of disease. It's important to note that we might be living with COVID for the foreseeable feature. It's not something that's just going to go away. It's just going to be something that we have to manage and live with.
So, keeping all of this in mind, your company will need to take a hard look at whether or not travel bypass will be allowed from your program. The risk of not knowing where your travelers are and the consequences of them, say being sick and needing care, or bringing an illness back to the office and that causing a massive disruption in that particular location that would need to be shut down and cease operations, really cannot be overstated.
And also, for financial reasons. For many of the reasons that Jason and Jim both spoke to earlier, it's important to have all your travel spend within one location to drive your airline, or hotel discounts and to help with these future contract negotiations. Your company will also need to evaluate the new working normal. So, will employees be allowed to work remotely full time?
Will they be returning to the office? Will there be a hybrid approach? So, Jason talked to the need to have constant revisions to your travel and expenses policy especially around the home office approach. So, your policies will need to reflect the direction your company has taken and to make sure your expense management system reflects this new policy.
So, should new expense sites be created to allow for home office expenses? Should certain medical expenses be allowed? All things that you'll need to consider as you build this policy for the future. Another key element of the new normal is how your company views travel as an essential part of your business.
Some travel may never come back. We're constantly asked at TCG consulting, when will travel be back? So, we always like to say, it's not a matter of when it's a matter of how. And part of that how is realizing that some items such as internal meetings that used to take place in-person may no longer be required as people become more comfortable with certain video conferencing tools like a Zoom, like a Microsoft Teams.
And this could actually be a good thing for your organization. It could certainly save from a travel budget standpoint. But certainly, there is going to be some travel that is essential whether it be meeting with customers. If you're in the manufacturing industry ensuring that plants are running correctly. If your competitor is out there traveling and they're winning all the sales deals, you're going to make sure that your people are out on the road so that you also close those deals too and increase the revenue at your company.
But we are sure that your policy clearly defines what travel is and is not allowed. And this will be very important as we work towards the road to recovery. So as look at how we're preparing for future disruptions, so they don't have as great of an impact. The key is automation.
Manual processes are not sustainable in the future work environment. I think we all found out during COVID for the organizations that were still mailing receipts and mailing expense reports how burdensome of a process that really was. Not having a centralized system or automation caused major issues for company as everyone then shifted remotely.
So being able to have centralized systems where employees and administrators can access from anywhere from any device will prevent shifts to a remote working environment as being as impactful as they've been during events such as COVID. Now business will continue to run as usual, and it'll allow your company to be more proactive rather than reactive.
So, I would like to leave everyone and strongly encourage them by saying, spend this time while travel is not yet back to the pre-pandemic levels to truly assess their current systems and all the pain points that they identified pre-COVID that mysteriously went away during COVID as people were not traveling again are going to come back. All the pain points that you identified during COVID; you need to address. And build a strategy around improving these items to develop a more automated and integrated workflow.
So, I'd like to take as back to the two value pillars, which is the control and the compliance as well as employee experience. You've heard us talk about different areas, but there isn't a wrong or right answer for your organization. It's what works for your organization. So, it's the culture. It's the type of employees that you're servicing. It's the industry that you may be in. But I think generally overall the balance, I think even with our health systems, when you hear Dr. Oz, "anything in moderation!" And so similar to this as well is a balance between expense types policy, which really helps you drive towards a strong employee experience as well as being able to maintain those controls and compliance.
Thanks, Jim, great points both of you. SAP believes that organizations of all sizes should be able to prepare for the unexpected while managing employee-initiated discretionary and travel-related spend while reducing risk, saving money and ensuring compliance without sacrificing employee productivity and satisfaction. This belief guides our innovation of SAP Concur solutions and integrations we make available to our customers through our partner ecosystem. Edward, Jim, and I thank you for attending today's podcast and hope that this discussion helps guide your organization in developing the right path to recovery for your business.
As TCG’s Associate Director, Expense & Invoice, Edward is responsible for business development, client relationships, engagement delivery and overall global strategy of the E&I practice. Edward manages a global team of experienced E&I resources that help deliver successful engagements across all industries. He has over 10 years of experience in software sales, SaaS implementation and management consulting. His work with clients spans across all industries both domestic and global.
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Jim is the Senior Principal for Payment, Expense, and Invoice. He has led and successfully completed complex and diverse global engagements for clients across multiple industries and geographies. Jim is responsible for advisory oversight to elevate our PSO and E&I delivery, and actively participates in many of TCG’s highest priority client assignments. With over 29 combined years of experience in corporate travel, finance operations, and business processes, Jim leverages his comprehensive perspective and experience with a thorough understanding of current ERP systems, expense management technologies, decision support models, and integration strategies to deliver optimized solutions for TCG clients.
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Jason Grunin is a Senior Value Delivery Consultant within the Global Value Enablement, Value Experience team with a focus on Public Sector. In this role, Jason assists customers by creating and delivering value-based engagements to help recognize opportunities for optimization and program growth. By mapping business outcomes to solutions, Jason helps organizations discover areas to improve management of employee initiated spend. Outside of the office, Jason, his wife Mary, their daughter Kathleen, and their dog, Jack (an English springer spaniel) are residents of Tulsa, Oklahoma. They enjoy cycling, skiing, and outdoor activities. In addition, they are avid travelers and try to spend time exploring new places!
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