November 12-14, 2017

Bellagio Resort & Casino, Las Vegas

Corporate Travel & Accounts Payable: Meritor Case Study

Jack Reynaert: Manager, Global Travel, Financial Shared Services

Dominic Calderone: Manager, Accounts Payable Site Integrations, Financial Shared Services

Meritor Inc.

• Meritor, Inc. is a global supplier of a broad portfolio of axle, brake and suspension solutions to original equipment manufacturers and the aftermarket for the transportation and industrial sectors. We serve commercial truck, trailer, bus and coach and off-highway machinery manufacturers, in addition to defense contractors.

• Operations in 18 countries, 5 continents, 60 locations with over 8000 employees

Global Footprint

Why Manage Travel?

• Travel management is a specialized business function that balances employee needs with corporate goals, financial and otherwise.

• Balances service and value with key suppliers, providing clear communication and direction to corporate travelers to drive compliance to established processes.

Why Manage Travel?

• Fulfill risk management, Duty of Care, to render assistance to travelers when global situations arise.

• Consolidate services impacting a significant controllable expenses.

• Travel Booking Processes and Selection (Air/Ground/Accommodations)

Why Manage Travel?

• Establishes controls to help ensure cost tracking and reporting, thus facilitating adherence to Corporate financial policies.

• Travel Expense Controls/Reporting

• Corporate Credit Card T&E Controls

• Meetings Management / Corporate Jet/Charters

• Implement & maintain technology interface over multiple platforms

Meritor’s Corporate Travel Department

• Rent-a-Plate with own ARC# - Global Deployed on Galileo/API

• 2016 Travel Expenses – Air: $5.1M (7,859 Transactions)

– Corp Jet: $278K (213 trips)

• Hotel: $3.9M (13.5k bookings /

28.1k nts.)

• Car: $500K (4k rentals / 12.2k days)

• Supporting / Staff: - Travel Booking – 1.5 on-site

agent(s)

- Expense, Audit, Reporting – 1 analyst

- Corp. Card, Risk Mgmt. – 1 Sr. analyst

- Meetings Mgmt. – 1 on-site agent

- Corp. Jet - .5 on-site agent

- Dept. & Vendor Mgmt. – 1 Manager

Global Travel Services

Collaboration within Finance

• Integrated within FSS - P2P ~ Expense Report Payables Process - Expanded to encompass – Travel Booking, Credit Card, Meetings, Corp. Jet

- Work with Payables team on reconciliation of Ghost Air Cards, cash reimbursement to employees not on PeopleSoft payroll, Credit Card Work Flow into Accounting, and we “red-flag” check requests for Travel & Meeting expenses, etc.

- Established controls for elimination of all duplicate payments

• Treasury - Transitioned Corp. Credit Card & Corp. Jet - Aligning processes to single service point related to Travel

Collaboration within Finance

• FP&A - Expense Detail & Spend Analysis Reporting – Budget

• Accounting – Accrual Capture / Reporting

• Internal Audit – Trained & Granted Complete Access to Expense Detail

• Tax – Payment via Corp. Card & Concur Expense Controls - Concur Expense Access & Receipt Reconciliation

- Global T&E VAT Reclaim Third/Party Management

Future Service & Savings

• FY17 & Beyond - Concur Expense Launched in: Australia, China, Singapore (FY17)

- India/Japan coming soon, to complete our global expense solution

• Expanded Travel Vendor Discounts - Enterprise/National Rental Car (10% greater avg. discount) eff. 5/1/2017

- Lufthansa Airlines (5% to 20% discounts) eff. 7/1/2017

- Aero Mexico Airlines (5% to 30% discounts) eff. 7/15/2017

- Expanded Airlines/Airfare offerings via Concur Direct Interface eff. 7/15/2017

- 5x more Hotel offerings in Concur, soon to incorporate Airbnb options later this year

Meritor’s Global Travel Program

Where Are We Going?

• Corporate Credit Card Change

• Concur User Experience Update

• Expand on T&E Reporting

• Hotel Groups/Meeting Tool

Integration Strategy

Transition travel process into automated Concur process - Documented and clear approvals - Automated expense processing & payment - Improved process controls - Reduced risk of errors & fraud - Efficiency gains translated to personnel reduction or reallocation

Shared Services – Accounts Payable

• Key drivers - Process standardization

- Reengineering

- Common, automation software

- Centralization (conversion from two AP centers to one)

Evolution of AP Shared Services 2008 Today

Personnel XX ~50%

Site personnel 28 0

Annual invoices processed ~130,000 ~175,000

Sites integrated 4 12

Shared Services – Accounts Payable

Personnel reductions/reallocations

Process controls - Segregation of Duties - Accounting accuracy - Eliminate risk of duplicate payments

Improved supplier relations

- Pricing - Issue resolution

Common process for vendors

- Payment terms - Invoice processing - Central point of contact

Shared Services – Accounts Payable

Headquarters in Troy, MI

Locations serviced: 21 - North America: 16 sites - Europe: 5 sites

AP Responsibilities

- Invoice processing - Process Reengineering - Payment processing - Vendor Maintenance & Purchase Order administration - Internal & external AP “help desks” for invoice and payment inquiries

Continuing to integrate additional locations into the Shared Service

model - Asia-Pac - South America - India

Shared Services – Accounts Payable

Volumes per month - ~15K invoices - ~400 internal/external help desk inquiries

Metrics

- Percentage of invoices on hold - Percentage of electronic invoices - Percentage of on-time payments - Purchase order compliance - Electronic payments - PO Price accuracy

Electronic invoice processing

- ~ 60% of total invoice volume - Evaluated Receipt Settlement (~80% of North America productive suppliers - Employee Expense Reports, EDI and Pay on Consumption (POC)

Shared Services – Accounts Payable

Paperless Processing

On-Time Payments

On

Tim

e P

aym

ents

by

Loca

tio

n Location # of Invoices Paid

On Time Payments %

Total 22,695 88.7%

Region 1

Region 2

Region 3

Region 4

Region 6

Region 5

16,577

2,920

992

38

1,625

543

90.3%

89.2%

86.8%

68.4%

76.6%

75.7%

Pap

erle

ss P

roce

ssin

g b

y Lo

cati

on

Location Electronic

Payments % Electronic Invoices %

Total 94.6% 64.2%

92.9%

100%

100%

100%

100%

100%

75.1%

39.0%

0.3%

98.4%

1.5%

0.0%

87.1%

82.2%

87.9%

87.0%

88.6%

77.2%

86.6% 85.2% 85.9% 86.7% 86.9% 87.2% 88.7%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Aug-16 Nov-16 Feb-17 May-17 Aug-17

# of Invoice Payments

On Time Payment %

Goal

Goal

94.3% 95.8%

93.5% 96.3% 96.9%

93.3% 95.4% 94.8% 93.7%

95.3% 95.3% 94.9% 94.6%

63.3%

56.8%

61.2% 61.2% 60.3% 58.0%

63.2%

57.7% 59.4%

62.6%

58.5% 60.7%

64.2%

40%

50%

60%

70%

80%

90%

100%

Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17

Electronic Payments %

Electronic Invoices %

Goal

Region 1

Region 2

Region 3

Region 4

Region 6

Region 5

Shared Services – Accounts Payable

Purchase Order Compliance

Invoices on Hold at Month End (OCR)

7.3%

4.1%

6.0%

7.4%

12.0%

5.8%

11.7%

10.0%

8.5%

11.2%

7.2%

4.9%

5.7%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Aug-16 Nov-16 Feb-17 May-17 Aug-17

Monthly Scan VolumeOn Hold as % of Monthly Scan Volume

Goal

Invo

ices

on

Ho

ld b

y Lo

cati

on

Location Monthly Scan

Volume % of Invoices

on Hold

Total 13,500 5.7%

7,897

2,059

684

70

1,938

852

4.1%

8.2%

4.8%

2.9%

6.9%

12.9%

PO

Co

mp

lian

ce b

y Lo

cati

on

Location PO Price

Accuracy % PO

Timeliness %

89.5% 89.2% 88.8% 90.8%

90.1%

87.7%

84.9%

87.3% 86.9%

88.2%

87.8% 86.9%

87.5%

89.7%

85.9%

94.9%

93.2%

95.4% 94.9% 96.2% 96.1%

95.2% 95.1% 95.5% 95.3%

94.8%

75%

80%

85%

90%

95%

100%

Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17

PO Price Accuracy %PO Timeliness %

Total 87.5% 94.8%

99.8%

50.5%

83.2%

100%

75.6%

57.1%

93.4%

99.0%

97.2%

80.6%

89.9%

84.8%

Region 1

Region 2

Region 3

Region 4

Region 6

Region 5

Region 1

Region 2

Region 3

Region 6

Region 5

Region 4