Finding The Right Expense Management Solution For Your Company

In recent times, initiatives such as the Sarbannes Oxley Act in the US have dramatically raised the profile of compliance within the corporate world. As a key element of any corporate compliance policy, expense management has shared some of the limelight. As a result, an Expense Management Solution (EMS) is now critical to any business concerned with corporate compliance. But what is an Expense Management Solution (EMS)? Does your company need one? And where do you find a good one? Just as importantly, how do you successfully implement and integrate an Expense Management Solution (EMS) into your corporate environment. This article sheds some light on these issues.

What is an Expense Management Solution (EMS)?

The term 揺xpense management solution?has been used to describe quite different commercial products and services. In the context of this article, an expense management solution is defined as a technology based system that processes:

(i) transaction records received from a credit card issuer (detailing employee use of corporate credit cards0; and

(ii) cash reimbursement claims originated by an employee.

In practice the target application is Travel and Entertainment expenditure. A robust Expense Management Solution (EMS) will also support procurement (pCard) activities as part of a broader strategy of effectively managing lower value, high volume business-to-business transactions.

The three core steps of any expense management process are:

1. the acceptance/input of validated source data;
2. the application of predetermined rules of handling expense records; and
3. the posting of transactions to a corporate repository such as an ERP system.

What is the purpose of an Expense Management Solution (EMS)?

The objectives of an expense management solution implementation should include the following:

1. to automate the preparation, submission, approval, and auditing of travel & entertainment claims, thus improving the productivity of account holders and reducing the time and cost of accounts staff;

2. to support the implementation of a standardized best practice method of managing high volume expenses through the use of corporate credit cards; and

3. to increase the transparency and enhance the governance of financial transactions conducted on behalf of the enterprise.

Sources of Expense Management Solutions

Australian and international organizations now have access to a range of quality expense management solutions which are well suited to driving down administration cost whilst meeting corporate compliance requirements. There are essentially three sources of 揺xpense management solutions?

1. ERP systems;
2. systems offered by card issuers; and
3. best-of-breed solutions.

Each will have their own merits and will suit organizations in different circumstances.

Enterprise Resource Planning (ERP) Systems

ERP sourced expense management has the attraction of being fully integrated within the financial suite of software, therefore offering a standard look and feel to all users of the ERP. With ERP sourced expense management functionality, the ERP supplies the core software, and the enterprise needs to customize and configure the system to reflect its own structures and rules regarding the management of staff expenses. If you're considering the option of using their ERP for expense management, you need to be conscious of a number of factors, including:

?the actual functionality available within their specific installed ERP system;
?the backlog of work on the ERP system accumulated for the IT department; and
?the deployment time and the cost of the project (which will usually be substantial).
License costs can be an issue if an enterprise if your company has not paid a license fee that will cover all card account holders and cash claimants.

Card Issuer Systems

Some card issuers promote 揺xpense management?solutions which can range from a computer generated report through to an online system with some embedded workflow concepts. The attraction of card issuer expense management solutions is that they are offered as part of a card deal, sometimes (apparently) for free. If you're considering a card issuer expense management solution, you need to know:

?will you be 'locked in' to the card issuer?; and
?will you be able to configure the expense management solution to adequately reflect internal requirements?

Best-of-Breed Solutions

Best-of-breed expense management solutions from specialist providers can be relatively seamlessly interfaced to an organization's internal systems such as HR and ERP, but will not present a common look and feel to the ERP system. You would usually choose a best-of-breed expense management solution if you want:

1. your company to be independent of a particular card issuer;
2. to achieve a fast implementation; and/or
3. to configure the solution to its own unique rules and policies of expense administration.

Best-of-breed expense management solutions are typically deployed as either an ASP (Application Service Provider) or self hosted solution. Although exceptions are common, small to medium enterprises tend to appreciate the lower up-front cost of an ASP expense management solution, and larger enterprises are attracted to the control available through a self-hosted expense management solution. ASP expense management solutions are typically paid for on a per statement per month basis, and self-hosted expense management solutions have a range of options available from up-front license fees to monthly license rentals.

Overcoming the Cultural Resistance to Expense Management Solutions

Some Finance Directors still have an aversion to corporate credit cards. It's not uncommon to hear a finance director say 搃f I give everyone a card, they'll spend us broke!?

However, the benefits of an Expense Management Solution are apparent as soon as the Finance Director considers the difficulties of controlling the expenditure behavior of thousands of employees using a manual system of reimbursements which is largely based around a set of uncoordinated spreadsheets. Basic activities such as enforcing travel policies, calculating tax implications, reconciling, posting to a chart of accounts at a detailed level and auditing, are so difficult as to be more honored in the breach than the observance...

Viewed from a different perspective, a company with revenues of $700m $50m in EBITDA, and $20m in annual employee business expenses, can make a dramatic impact on its bottom line using an expense management solution without increasing revenue. If automation reduces these expenses by only five per cent in the first year, the savings alone have the same impact on the bottom line as $14m in new revenue. It isn抰 surprising that the return on investment of an expense management project is often achieved within its first 12 months of operation.

Expense Management Solutions also play a vital role in Fraud Control. 揊raud?in this context takes many guises, not all of which are the sort that land perpetrators in court. Information taken from our own customer experience and from publications of the USA Association of Certified Fraud Examiners identify the top four categories of fraud:

1. Mischaracterized expenses
2. Overstated (exaggerated) payments
3. Fictitious expenses
4. Multiple reimbursements

Research in the USA has pointed to as much as 1% of company revenues being lost to employee expense mismanagement. Expense Management Systems will not, in their own right, eliminate this but they are a vital tool in creating an environment that drives down the level of mismanagement.

Conclusion

Over the past 18 months, our company has observed a change in motivation for expense management projects. Whereas formerly expense management solutions were an exercise solely in the reduction of administration costs, now governance is equally a driver to implement technology based controls around high volume expenditure. The Sarbannes Oxley (SOX) act in the USA has captured the attention of any enterprise active in the USA. However, inside or outside the USA, the senior executives must warrant that their company has implemented adequate financial controls that prevent fraud and give a true and correct record of the enterprise抯 financial activities. As a result, the Corporate Travel Manager who pitches a proposal on expense management to the senior executive team currently finds a willing audience.

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Employee Performance Management

Fixation of compensation or wage rates for different categories of employees in a company is an important task of management. The employees are not only concerned with the wages received but also concerned with the level wages received by same level of employees in similar organizations. Hence wage structure may be considered very important. The relative wage-rules must be fixed carefully, because they have implications for promotion, transfer, seniority and other important personnel matters.

Wage plan should possess certain fundamental characteristics if the long term interests of the worker, management and the consumer are to be served. The wage plan must be linked with the productivity of the workers. Unless higher pay scales of workers are linked in some way to the productivity of workers, a wage plan will not be fair either to the management or to the consumers.

Basic wage for each job classification should be related to skill job requirements of job. Due consideration should be given to such factors as skill, length of time required in learning, versatility required and working conditions. In all fairness to management, the plan should usually result in a reduction of unit cost of manufacture, making possible lower prices and higher profits.

In all fairness to the consumers a share of higher efficiency should be passed on to them by way of lower price. This will be possible when there is reduction in cost due to higher efficiency. Thus the wage plan must ensure that all participate share the gains of higher productivity. The wage plan should include an incentive system for the efficient workers. The system should ensure higher pay to the workers who perform work at higher level of efficiency. The wage plan should guarantee minimum wage to protect the interest of workers against conditions over which they have no control.

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Set an Action Plan in Time Management

Do you have an action plan in your time management scheme? Last night while writing these articles, I had to check myself. The last thing I want to do is tell the readers how to manage time and be a hypocrite. The writing of these articles is rewarding since I realized that managing your time includes using your intelligence and skills, as well as putting an action plan into play. Action plans are lists of responsibilities that instruct a person 搕o carry out to achieve an objective.?

The list centers on the goals immediately needing achievement on demand. The list or action plan enables you to center your attention on the specific obligations required of you. The marketplace has several software programs that help those of us that have busy schedules and time management is a struggle. The software抯 available provide tools for storing names, addresses, SS# and other important information in a secure filing cabinet.

Many of the large companies are wise to invest in this type of software, since it is a source for managing time. However if you own a smaller company, the software programs are often expensive so you might want to resort to some of the software programs that offer similar tools for organizing, such as Microsoft Outlook, to manage your time. Microsoft Outlook has book organizers, address books, and other tools sufficient enough to help smaller businesses manage their business.

If you are storing files on your computer, be sure to backup your data so nothing is lost. Backups are essential for protecting important documents, and if spares you headaches if your hard drive fails, and your data is lost. If you are, storing data on discs or other storage mediums be sure to include a file name that you will remember. For example, if you are storing birth certificates or identifications in a file, name the file accordingly. This will help you stay organized, and ahead of the game. File extensions are connecting files to a particular file.

Therefore, if you have outdated files, you might want to add a few extensions and label the file accordingly. This will help you get right to the important documents, and have the piece of mind you need if the outdated documents require reopening. If you have documents, lying around or in your computer that you no longer need, make sure this is true and toss them in the garbage. Why hang on to something that you will not need again?

Wasted documents take up time and space in the sense that if you are searching for a document and continue to stumble on papers you no longer need, it is a waste of time. Most business requires maximum speed on computers. Moreover, when you are storing outdated files, your action in time management plan is out of socket. Getting ahead is organizing and tossing what is wasting space. Getting the ball rolling is an action plan that results with time management.

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Seven Must Have Features of Contract Management Software

Contract Management Software allows you to manage contracts, automate contract management and much more. However, the details involved within the varying contract management software solutions can become confusing. This article is dedicated to providing seven solid features you can and should expect before you spend any dime.

Here is a list of features we will examine in this article:

1. Contract Endorsement
2. Contract Creation
3. Contract Storage
4. Contract Management
5. Contract Examination
6. Contract Negotiation
7. Contract Payment Services

Although there are many other features in contract management software solutions, this article is only intended to provide an overview for any one considering purchasing this type of software. This article will also allow any individual interested in learning more about contract management software to get a good idea of what to contract management software is. I really hope this helps you out!

Let抯 get to it.

Contract Management

Contract management is the managing of all aspects and phases of any and all contractual agreements including the creation of certified, professional contracts that meet legal directives, supply categorization and systematization in contracts, etc. Contract management software facilitates management and the automation of tracking and reporting of contract processes.


Contract Creation

Contract creation involves the drafting of contracts from idea and discussion to completion Contract management software will allow the user to automate this process into legal/binding agreements and contract modifications in the form of amendments if necessary.

This is important! Having the wrong contract management software may cause you unnecessary stress due to legal problems with improperly outlined contracts. The reason it may be necessary to have contract management software is that it often will have templates and proper wording in order to assure that the agreement is clearly documented and explained.

Contract Storage

Contract storage is pretty self explanatory. The user can collect, gather, and store all contracts in one system. Contract management software provides the system to save contracts for proper record keeping.

Having a storage system for your contracts with customers allows electronic copies of agreements made, modifications, amendments, etc. to be kept securely in one place. This prevents common accidental spills, loss, and damage to hard copy contracts.

Contract Payment Services

Contract payment services involve the negotiation of payment terms, establishing of compensation methods, and payment tracking from contract initiation to conclusion of payment. Contract management software supports uninterrupted services around the implementation of expenditures owed to partners throughout the life of the contract.

Having one place to discuss and document all payment negations is invaluable. In the event of legal ramifications or discrepancies in contract negotiations, both you and your customer can use contract management software to automate and document all financial compensation methods.

Contract Negotiation

Contract negotiation entails authentication completion, evaluation and establishing of payments due according to the specifics in the negotiation for each party. Contract management software will allow the user to authorize and authenticate chargeback claims for each contract partner.

As mentioned above, with contract management software the entire negotiation process can be done in one system. This ensures that all parties involved with the contractual agreement have clearly documented claims stated in the proper format.

Contract Endorsement

Contract endorsement involves scheduled approvals based on changes made and milestones reached in contract negotiations. Often these contracts are online allowing both parties to evaluate objective goals and submit approval.

At any point in the negotiation process or amendment of prior agreements, contract management software will allow each party to approve or deny any part of the contractual goals of the other partner. This is important because nothing can be finalized in the contract without prior approval from both parties.

Contract Examination

Contract examination entails the analysis and investigation of the varying contract-based relationships over the history of the contract. Contract management software allows the detailed scrutiny of the contractual agreements, financial analysis, and quality of contract implementation strategies for each customer according to individual demographics.

Knowing what implementation strategies were effective and which ones were ineffective allows for optimization of future strategies. In plain English, this means that knowing what worked and what didn抰 helps you do what worked more. If you don抰 evaluate your processes, you may be in danger of repeating poor business practices and losing money.

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For more information on contract management software or other types of management software, visit Management Software Review (http://managementsoftwarereview.org). Your SOURCE for management software info.

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Extracting Real Benefits From Travel & Expense Management

For your company to truly reap the rewards of a structured corporate travel policy, it must focus on one thing above all else: compliance. Unfortunately, while the explosion in convenient Self Booking Tools gives you a lot more freedom of choice, it also makes compliance a great deal more challenging. Any technology that supports an increase in compliance to policy has merit; it will save your company money and bring back the benefits of corporate travel.

Today's diversity of choice in self booking tools makes compliance through denial of access a very difficult protocol to enforce. What you really need is a funnel through which 100% of your company's travel activity must pass. In the corporate world, the only viable funnel is the payment mechanism ?getting paid is the ultimate leveler. If you use a corporate credit card as the payment mechanism, supported by an expense management solution, and suppliers who can report back to you a reasonable level of data, you stand a very good chance of supporting the compliance objective.

A compliance-friendly Expense Management Solution (EMS)
An expense management solution which processes card transactions (and possesses decent workflow) requires the traveler to personally justify all deviations from policy to their supervisor ?on a transaction by transaction basis. Just as importantly, the warehoused individual transactions give the corporate travel manager the opportunity to conduct spend analysis and examine individual and aggregate behaviors.

You might argue that this is after the act, but it still encourages compliance. As per all card based procurement systems, if an employee consistently deviates from company policy, they may be penalized (e.g. card withdrawal, official warning, employment termination, etc.). The threat of negative repercussions acts as a deterrent to card misuse, thereby increasing the level of compliance.

The benefits of policy compliance

80% of the business case benefits of corporate travel will come from travel policy compliance. This requires:

?Sound policy and procedures;
?A comprehensive communication strategy;
?A gate through which all activity can be channeled (the card and the expense management solution); and
?Tools to monitor and measure compliance.

There will also be some peripheral benefits to be gained from an expense management solution in the pre-trip phase:

For instance:

?The traveler can use the work flow component of an expense management solution to create travel request and approval records rather than using something less structured like emails.

?Using the expense management solution, the traveler can create a 揷ommitment?record at the time of booking for subsequent matching of the credit card transaction when it comes through.

?You can obtain a download of trip data from your TMC, and travelers can seek to match that against trip card transactions, thus reducing the quantity of manual entries required of the travel coordinator.

?The expense management solution provides travelers with a real-time log of commitments beyond what might be recorded in a personal diary.

How does it apply to your company?

In looking at the business case for this exercise, you do need to closely examine a number of factors to determine the benefits you will actually realize:

?There are no industry-wide standards, and the market tends to work as a series of isolated closed provider loops ?your efficiencies will be greatest if can conduct your business entirely within one closed loop. It is up to you to determine if you can obtain maximum purchasing power in this environment.

?The importance you place on understanding the cumulative value of travel booked but not yet paid.

?The extent to which you can source the data you require from your travelers via a TMC data feed and, consequently, the keystroke savings you can achieve for those travelers.

?The productivity gains you will obtain for your travelers by virtue of them setting up trip details in your Expense Management Solution (EMS) at time of booking rather than at time of arrival of the card transaction.

The combination of Electronic Travel Management and Expense Management is an important subset of eProcurement, and it is subject to the same challenges facing all eProcurement initiatives over the past 10 years ?industry standards, supplier participation, and a seamless marketplace. Until these elements are all in place, greatest advantage will be gained by companies that focus on the big picture of where they can achieve maximum purchasing value with reasonable purchasing productivity ?usually based on being able to perform an analysis of spend patterns and behavior.

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Finding A Document Management Solution - In-House vs. Hosted Solutions

Before we get started, some of you may be asking what is document management?

Document Management is the ability to manage all of your paper documents in an electronic format. Let's define "paper documents in electronic format".

Basically, there are two types of document management systems, either an in-house solution, or an outsourced hosted solution.

So,which one will best suit your needs? Good question. Most companies base their decision on available staff to maintain these systems, and the technical abilities of those staff members. Cost of a solution is also a deciding factor. While the cost of an in-house solution is higher up front, having the technical staff to support it, it typically pays off in the long run due to the calculated Return On Investment (ROI). The lower cost of a hosted solution is appealing to many companies because this solution puts the technical responsibilities on the solution provider. It's also beneficial in that most of these solutions are web-based. While some companies can truly benefit from the hosted solution, many can't due to confidentiality of the information contained within their organization.

Finding a solution to fit your company's needs can be a time consuming venture. We recommend you first determine what solution fits your organization best, then shop for a solution with the features best suited to your business needs.

How much office space can I save? Good question. It depends on the amount of paper files you have taking up your valuable office space.

In most offices, there are filing cabinets everywhere. We've become attached and dependant on our paper files. Since most companies are mandated to hold their records from 3 to 7 years, that adds up to an exhaustive amount of paper needed to be maintained and stored. Where do you store it? In your office? A records storage company? What are those costs? All these questions lead this topic in a new direction. Why are you keeping these records in paper format? Why not an electronic format?

OK, let's look at some statistics. But before we do that, let's set the standard office environment so we have a reference point to start from. Now for the breakdown:

A typical filing cabinet drawer holds about 3000 pages when full.
So a full 4 drawer cabinet holds about 12000 pages.

A lateral file drawer holds about twice or 50% more files.
So a full 2 drawer lateral cabinet holds about 12000 pages.

The Simple Math

Ok, now that we know what we have in the space of our filing cabinets, let's look at space on storage media.

A standard 8 1/2 x 11 page scanned at 200x200 DPI (dots per inch) is about 50k in size (average)
There is 1024k in 1 megabyte of space.
There are 700 megabytes of space on a CD.
There are 4,700 megabytes of space on a DVD.

Ok, here's the simple math.

1,024k (1 megabyte) divided by 50k (standard scanned document) = 20.48 documents per megabyte
700 megabytes (1 CD) x 20 (scanned images per megabyte) = 14,000 documents per CD
4,700 megabytes (1 DVD) x 20 (scanned images per megabyte) = 94,000 documents per DVD

So here are the facts.

1 CD = 1 filing cabinet full of paper documents (12,000 documents)
1 DVD = 7 filing cabinets full of paper documents (84,000 documents)

Once these documents are scanned and placed on a CD or DVD (write once only media) they become legal documents that can be archived and retrieved later in the event you would like to print, fax, or email them.

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