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© 2016 PayStream Advisors, Inc | www.paystreamadvisors.com | [email protected]

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2016 Expense Reporting for Professional Services

Increasing Productivity and Professional Services Success with Expense Reporting Software

Q4 2016 | Featuring insights on... » Current Expense Reporting Trends in the Professional

Services Industry

» P2P Automation for Professional Services Organizations

» Software Adoption Best Practices for Professionals

Services

» A Leading Expense Reporting Software Provider with

Professional Services Experience

Q4 2016 © 2016 PayStream Advisors, Inc | www.paystreamadvisors.com | [email protected]

Introduction 3

Survey Results 4

Expense Reporting Solutions for Professional Services 10

Adopting a Professional Services-Focused Solution 13

Conclusion 15

ImageTag 16

About PayStream Advisors 19

Contents


Introduction When it comes to improving control over company spend, automating the expense management process is one of the most effective ways to increase efficiency, visibility, and savings. This automation can also go a long way towards improving employee satisfaction and productivity, which is especially important for the more client-focused, creative-minded companies in the professional services industry. Maintaining efficient expense reporting processes can be a challenge in fast-paced, varying business environments like those in the industry—without automation, professional services organizations suffer from slow approval times, lengthy reimbursement cycles, and other processing pains.

PayStream Advisors has found that many professional services companies hesitate to adopt expense reporting software because of a lack of awareness of the available solutions. This lack of education is not unique to this industry; many organizations across a wide range of market segments and industries do not take the time to learn about the benefits of automation. However, these benefits are numerous—expense reporting solutions help professional services companies gain transparency into processes, manage spend across a wide range of projects and teams, and greatly improve expense report approval and employee reimbursement times. In all, expense reporting automation supports the unique qualities of the industry through control and visibility, and improves the satisfaction—and output—of the industry’s talented professionals.

This report seeks to highlight the value of expense reporting software specifically for the professional services industry by analyzing recent trends in expense reporting management among these companies. It includes a guide to leading expense reporting solutions that tailor their solutions specifically to the professional services industry. It also offers a profile of an expense reporting solution provider with extensive experience in the professional services sphere.


Survey ResultsIn order to gauge the current state of expense reporting trends among professional services organizations, PayStream Advisors has extracted data from the 2016 Travel and Expense Management (TEM) market survey of several hundred North American professionals from a variety of industries. This data reflects the trends of professional services companies in particular, and covers the following subverticals:

» Accounting » Architecture » Engineering » Financial Services » Consulting (IT, Management, etc.) » Legal » Advertising, Marketing, and PR

PayStream Advisors’ survey and industry benchmarking research shows several trends across many types of professional services companies, and in a variety of back-office processes. For example, professional services organizations tend to fit in small and mid-sized market segments, and their products are often intangible. For these reasons, professional services companies often process fewer POs and invoices per month than is typical in other industries, such as manufacturing or healthcare companies that are typically larger and have more suppliers. The same tendencies are reflected in expense management; survey results show that over half of surveyed professional services companies send fewer than 500 expense reports per month, see Figure 1.

EXPENSE REPORTS PROCESSED PER MONTH

51%

20%17%

7% 5%

Less than 500

More than 10,000

500–2,500 2,500–5,000 5,000–10,000

Figure 1

Most Professional Services Organizations

Send Less than 500 Expense Reports Each

Month

“How many expense reports does your

organization process per month?”


Despite relatively few expense reports, research shows the industry has moderate levels of expense reporting automation adoption, Figure 2. In any industry, higher adoption rates typically reflect a more progressive attitude towards technology. This attitude is also reflected in above-average adoption rates for invoice receipt and purchasing software adoption among professional services organizations, as found in PayStream’s 2016 P2P for Professional Services report.

Although adoption is relatively high, Figure 2 shows that many organizations are still operating with manual processes. A sizable group (20 percent) of organizations have at least some automation, but this could simply mean their employees use a business travel company to book business trips—it does not necessarily mean that all of their processing needs are met. In fact, PayStream has found that although professional services companies are likely to have at least partial automation, they still tend to use inefficient strategies in other areas of processing.

TEM PROCESS AUTOMATION ADOPTION

29%

27%

20%

15%

5%

4%

We are fully automated anduse a single/integrated system

Our process is entirely manual

We are fully automated butuse disparate systems

We are planning to implementan automated solution

within the next 6 months

We use a third-partyoutsourcing provider

We have some automation

Figure 2

The Majority of Professional Services Companies Surveyed are Fully Automated

“Which of the following statements best describes

the extent of automation in your TEM process?”


For example, PayStream’s 2016 P2P for Professional Services report shows that many professional services organizations manually enter data from business documents into their financial systems , even if they receive those documents via email. TEM survey results show that organizations without an expense management system typically fill out spreadsheets for their expense reports, attach receipts, and submit them for approval, or they mail paper receipts to their AP department, see Figure 3. This means that not only are employees manually compiling and submitting their own expenses, the AP department is likely manually entering expense and receipt data into their financial systems. Manual data entry consistently leads to lengthy expense report approval times and reimbursement cycles.

EXPENSE RECEIPT SUBMISSION METHODS

46%

28%

24%

2%

0%

Employees scan and attachreceipts to expense reports

in an automation solution

Employees scan and attachreceipts to spreadsheet reports

Paper receipts are mailedto the AP department

Fax

Paper receipts are mailedto our outsourcing provider

Figure 3

Most Professional Services Employees

Scan and Attach or Mail Receipts for Approval

“Which of the following methods do your

employees use to submit expense receipts? (Check all

that apply)”


The professional services industry suffers from lengthy approval cycles and the resulting process pains in many areas of back-office processes. When professional services organizations were asked about their greatest pain points in expense management, most reported process inefficiency, a lack of visibility into spend, and lengthy reimbursement cycles, see Figure 4.

By pinpointing the industry’s process pains, PayStream has also identified key characteristics for an expense reporting solution to meet the efficiency needs of professional services organizations. One necessity is a solution’s ability to meet the industry’s complex business structure requirements. Professional services organizations often have many small departments routing back-office documents by hand or email across multiple teams and locations, and the business processes can be complex and changing. Professional services organizations also vary widely in how their employees work and the ways in which they provide services for their clients; these companies’ operations often run on a project-based structure, with one or more account managers and a team of creative professionals assigned to each project. The associated costs can be very complex—and possibly stretched over a long period of time. In all, this requires a great deal of control and visibility in order to maintain efficiency throughout an engagement.

For example, for organizations in consulting or advertising, expenses could consist not only of travel costs, but also services and materials bought while on a client’s site that ultimately go into production costs

BIGGEST EXPENSE MANAGEMENT CHALLENGES

34%

23%

18%

15%

6%

4%

Manual data entry andinefficient processes

Lack of visibility into spend

Inability to enforcecorporate travel policies

High cost of processingan expense report

Increase in overall T&E expenses

Lengthy reimbursement cycles

Figure 4

Professional Services Organizations Suffer

from Inefficiency, Poor Visibility, and Lengthy

Reimbursement Times

“What are the biggest challenges your

organization faces in the expense management process? (Select up to

three.)”


of the final delivery. Properly reporting all incurred costs requires careful effort and accuracy in order to ensure compliance with budgets and complete, timely reimbursement.

The expense reporting solution must also be able to comply with and support the industry’s people-orientated business focus, and the unique work culture within many professional services companies. Professional services companies’ creative teams are often among their most valuable assets, and these employees often rely on high levels of ingenuity and energy to provide the best services. These services require more in-depth interaction with clients, as a professional services company’s business success is based on customer satisfaction to a much higher degree than an industry like manufacturing, which tends to operate higher up in the supply chain. In turn, professional services companies realize the close connection employee satisfaction around work environments and tasks has with output. This creates a greater focus on people in these companies, driving them to ensure that their workforce feels supported.

When professional services organizations are unable to manage their back-office processes efficiently, it can have can have a direct impact on their employees’ happiness, productivity, and output. In contrast, organizations that adopt expense reporting automation experience improvements in these areas, and list employee satisfaction among the most important benefits they have achieved, see Figure 5.

BIGGEST BENEFITS OF TEM PROCESS AUTOMATION

29%

21%

18%

15%

10%

4%

Quicker reimbursement ofemployee expenses

Improved employee satisfaction

Lower processing costs

Better ability to enforcetravel policies

Better compliance with regulatoryrequirements (SOX, FASB)

Improved visibility over spend

Increased corporate cardusage and rebates 3%

Figure 5

Professional Services’ Top Expense

Reporting Automation Benefits are Expense

Reimbursement Improvement and

Employee Satisfactions

“What are the greatest benefits you have achieved

by automating your TEM process? (Select up to

three.)”


Organizations also highly rank process improvements around approvals and visibility when indicating their most valued expense reporting tools, see Figure 6. Other important tools for this industry include reporting and analytics support, which can greatly help improve control over spend and identify process weak spots, and mobile applications, which aligns with the more progressive nature of professional service organizations. The following section explores the features and value of these tools and others offered by today’s leading expense management solutions.

BIGGEST BENEFITS OF TEM PROCESS AUTOMATION

24%

21%

16%

11%

10%

9%

Expense reporting approvalworkflow and management tools

Expense report creation tools

Mobile application

Pre-trip travel booking

Employee reimbursement support

Expense report analyticsand reporting

Expense report auditing tools 7%

6%Pre-trip plans approval workflow

Figure 6

Professional Services Organizations Highly

Value Approval Workflow and Expense Report Creation Tools

“Which of the following TEM features does your

company most value? (Select up to three.)”


Expense Reporting Solutions for Professional Services Expense reporting solutions provide users with a wide range of tools and features. When these solutions are integrated with a booking tool, traveling employees can submit travel plans for approval prior to a trip and arrange quality transportation and accommodations at competitive prices. All employees can take pictures of receipts and submit them for processing using OCR data capture technology, eliminating the need for manual data entry. The software allows users to allocate expenses to cost centers, explain non-compliant spend, and attach credit card transactions to reports. After completing those steps, employees can submit expense reports from their mobile device or desktop at any time, and they have full visibility into the status of their pending reimbursements. Approvers and auditors can see all out-of-policy spend, and can approve parts of reports and reject others. In all, expense reporting solutions give organizations more power—with less effort—than they could ever achieve with manual procedures.

Expense reporting software for professional services improves efficiency through flexible report creation tools and customizable approval workflows, reducing cycle times and providing much-needed visibility into spend. These solutions also adapt to the diverse and creative nature of professional services employees’ daily work with features that are easy to use, configurable, and visually appealing.

The following list highlights the benefits professional services organizations gain from today’s leading expense management solutions.

» Paperless Processes – Expense reporting software allows professional services organizations to eliminate paper receipts and expense reports, as well as all the data entry related to manually-driven processes, such as filling out spreadsheets. With OCR data capture technology, employees can easily enter paper receipts into the system, and through integration with corporate cards, employees can create expense items and assemble reports within minutes. This not only creates more control and visibility into expenses, it save professional services staff valuable time and allows them to stay focused on more value-added, strategic tasks.


» Dynamic, Configurable Workflow – Improving workflow approval efficiency is one of the greatest goals for professional services organizations. Expense reporting solutions allow organizations to route expense reports for approval through a variety of approval stages and departments, as well as set up dynamic escalation and forwarding controls to maintain timely approvals and employee reimbursements.

» Process Visibility – Expense reporting solutions alert users to compliance issues, giving them opportunities to adjust or explain out-of-policy entries. They also clearly identify non-compliant expense reports, allowing approvers and auditors to automatically send the reports back to users for correction. These controls span many departments and offices; they also bring value to professional services operations by giving managers real-time insight into project or departmental budgets so that employees have less risk of overspending. Many solutions also offer reporting and auditing tools to help pinpoint inefficient spend strategies and spenders who are frequently incorrect or possibly fraudulent.

» Improved Cycle Times – The combination of paperless processes, approval workflow automation, integrated policy controls, and transparency into spend all work towards improving one of the most troublesome problems for expense reporting—lengthy reimbursement times. Expense reporting providers work with organizations to reimburse their employees in the way the organizations prefer. These options include direct deposit, which research shows is the most popular method for reimbursement, see Figure 7.

EMPLOYEE EXPENSE REIMBURSEMENT METHODS

Paper check

27%

47%

26% Direct deposit toemployee bank account(outside payroll run)

Part of payroll transaction

Figure 7

Direct Deposit is Professional

Services Companies’ Preferred Method of

Reimbursement

“Which of the following methods do you use

to reimburse employee expenses? (Check all that

apply.)”


Quicker reimbursement not only improves a company’s spend management, it also boosts employee morale, which can go a long way towards improving productivity and business success for professional services companies.

» Employee Focus – In order to support the creative and strategic mindset of professional services employees, it is important that the expense reporting process is easy and fast. Expense reporting solutions for professional services feature modern, visually appealing interfaces that are intuitive and easy to learn, requiring little to no training. These solutions allow employees to quickly complete and submit reports without sacrificing accuracy or compliance. Just as with quicker reimbursement cycles, the benefits of improved employee satisfaction through an employee-focused solution help improve output.

» Mobility – Many of today’s expense reporting solutions offer their tools through mobile applications, either in a native app or with web-based, responsive design that allows the app to function uniformly across every device. Mobile applications further streamline the expense reporting process by enabling employees to submit receipts, assemble and submit expense reports, and keep track of report statuses and reimbursement using their phone. Mobile apps also help speed up approval times by allowing managers to review, re-route, and approve expense reports on the go at any time.


Adopting a Professional Services-Focused Solution When choosing an expense reporting solution, it is important that professional services organizations take into account more than just a solution provider’s product set. They must also look at the provider’s services, experience, and applicability, and compare these factors with their own professional services requirements.

Below are a few items that professional services should look for when choosing a solution:

» Cloud-Based Infrastructure – Because professional services organizations typically have a more progressive attitude towards technology, it is important that they carefully consider the advantages of cloud-based, SaaS technology over on-premise systems. Not only are cloud solutions more versatile, configurable, and easier to integrate, they also tend to be a better choice for small and mid-sized organizations in terms of price range and scalability.

» Scalability – The ability to scale a solution to a company’s growing internal requirements is especially important for professional services organizations with smaller budgets and more widespread processes. A company with many locations may not be able to implement the solution across all areas right away, but with the right solution, it can move towards more holistic adoption over time. In addition, many expense reporting solutions offer different components of their product set separately, allowing professional services companies to adopt the system at their own pace and in accordance with their budget.

» Integration Support – Due to their size and varying business operations, many professional services companies cannot spare the time or money for a large-scale software implementation. In order to keep long-term costs and IT issues down, it is important that professional services organizations evaluate a solution’s back-end applicability just as carefully as its front-end functionalities. That is why these companies should look for a provider that has extensive implementation support services, and that offers a solution that is easy to integrate with existing systems. Cloud-based solutions are also good options for maintaining low IT cost, as they are updated regularly and maintained by the provider.


» Professional Services Tools – Beyond the general professional services-focused tools in many expense reporting solutions, some providers go a step further and incorporate tools that are specifically tailored to the industry. For example, some solutions offer a project-based expense reporting module specifically designed to support the operations of many professional services organizations. Companies should discuss all of the available tools with the solution provider, and determine if that provider is willing to configure existing tools to fit with the company’s needs.


ConclusionFor professional services organizations, it is important to create an internal environment for success in expense reporting. This is accomplished by correcting inefficient processes, controlling spend, maintaining a progressive attitude towards technology, and supporting employees—all of which can be achieved by adopting a dynamic expense reporting tool. With the benefits of automated expense reporting processes, professional services companies have the potential to improve not only productivity and company morale, but also the value of their final services.

The following profile highlights the features of a leading expense reporting solution provider with years of experience working with professional services companies.


ImageTagImageTag is as a document management and business process automation solution provider for the mid-market. The company first offered its ECM solution in 1997, later adding ERP system integration and workflow automation to its core capture platform, KwikTag. Today, KwikTag provides ImageTag customers with a holistic system for managing document processes across their entire organization. The KwikTag solution includes several advanced workflow tools, known as KwikApps, for a variety of document management processes including expense management, accounts payable automation, HR forms automation, and onboarding management. One KwikApp, KwikExpense, automates the expense management process by accelerating receipt capture, automatic expense report creation, and back-office reconciliation.

Founded 1997Headquarters Tempe, AZOther Locations Tucson, AZ and Fort Lauderdale, FLNumber of Employees 50Number of Customers 1,000 companies; 120,000+ business users

globallyTarget Verticals Healthcare/Insurance, Financial Service,

Manufacturing, Restaurant and Food Service, Construction, Professional Services, Sports and Entertainment, Education and Government, Non-Profit

Partners / Resellers Tribridge, SBS Group, Socius1, RSMAwards / Recognitions Microsoft Silver Partner, 9 Patents; Microsoft

Partner of the Year Finalist

Solution Overview

KwikTag integrates directly with Microsoft Dynamics GP, NAV, SL, and AX through ImageTag’s ERP connectors, allowing customers to tag, view, search for, and retrieve any document that has been captured by KwikTag from within their own system. The system also integrates with Microsoft Office and Office 365, enabling users to leverage the system for collaborative internal activity. The solution’s ERP integration allows it to automatically create accounting transactions and audit trails associated with project-based and other professional services expenses.


The solution is offered on mobile devices through the KwikTag Anywhere client, a responsive design application. This web-based interface enables quick and easy expense report approval, rejection, or delegation—in whole or at the line-item/receipt level. Approvers can manage, update, or approve expenses from anywhere on any mobile device.

KwikTag provides security at multiple levels, including user authentication, site and drawer level permissions, and file-specific access. All security is maintained through Active Directory-driven control settings and single sign-on Windows authentication at the user level. KwikTag’s security measures are compliant with SOX, HIPAA, and other financial and corporate regulations.

KwikExpense is built on the scalable KwikTag platform, allowing organizations to automate other critical business processes with the same system. The solution is specifically designed to support the business structure of professional services organizations by allowing them to manage expenses across multiple projects. With KwikExpense, each set of costs is uniquely mapped to a project by employee or contractor, and users can easily identify billable and non-billable expenses as they progress through client engagements.

KwikTag’s document management solution features full OCR data capture capability, as well as add-on products and services that perform intelligent capture (Zonal OCR) with auto-learn capabilities.

KwikExpense users can capture travel expenses by snapping pictures of business receipts with their smartphone and emailing them to KwikTag, where users can easily match receipt data to corporate credit card statements. Receipts can also be scanned or uploaded into KwikTag.

Once expenses are in the system, users can create expense reports and send them for approval. Corporate expense policies can be incorporated into the receipt submission process. For example, if an employee or contractor incurs a hotel expense that exceeds the allowable limit for the city, a notification is sent to the manager.

KwikTag Workflow allows customers to route reports across many different departments and roles. The solution supports mobile email approvals to accelerate the process, as well as automatic escalation routing. KwikTag enables users to update workflows in real time with its Workflow Assignment Matrix Management tool. This workflow also applies to pre-trip approval; users can use KwikTag to send travel requests to appropriate approvers.


Back-office corporate credit card reconciliation is easy for accounting professionals, as they can quickly see which receipts are missing by cardholder, while KwikExpense emails those cardholders reminders to submit the missing receipts. Expense reports can be completed for reimbursable expenses in addition to corporate credit cards. The expense report creation, submission and approval process for reimbursements is the same. The entire process is visible to all users and expense management stakeholders, and users can easily view which expense reports have been paid or are in process, as well as approval audit trails.

Reporting and Analytics

KwikTag provides visibility into all professional services projects and their related documentation for additional analysis. All documents and views are secured at the file and/or user level so that only authorized users can see the documents relevant to their role.

Implementation and Pricing

The average implementation of the KwikTag solution typically runs between 2 and 3 months, depending on the customer’s schedule and availability. ImageTag offers hands-on administrator training and video tutorials during implementation, as well as hands-on power user training.

After implementation, customers receive unlimited technical support via a dedicated US-based support team. They also have access to a dedicated Technical Account Manager (TAM) and proactive server maintenance for an additional fee. ImageTag’s pricing structure varies for on-premise and SaaS implementations.


About PayStream AdvisorsPayStream Advisors is a technology research and consulting firm that improves the way companies plan, evaluate, and select emerging technologies to achieve their business objectives. PayStream Advisors assists clients in sorting through the growing complexities of IT applications related to business process automation with the goal of making objective, analytical, and actionable recommendations. Wherever business process automation technology is an issue, PayStream Advisors is there to help. For more information, call (704) 523-7357 or visit us on the web at www.paystreamadvisors.com

http://paystreamadvisors.com/

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