Sherry Hibbs, VP Sales & Relationship Management BMO Harris Bank

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

BRINGING ROI TO YOUR BOTTOM LINE: COMMERCIAL CARD SOLUTIONS & TECHNOLOGY

CHROME RIVER EXPENSE MANAGEMENT

Agenda Overview

Commercial Card Best PracticesSherry Hibbs – Featuring Statistical Information on Payment Solutions

Expense Management Technology Best PracticesRobin Hanselman & Stephen White – Featuring Technology Solutions

Q & A Round TableSherry Hibbs, Robin Hanselman & Stephen White

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Commercial Card Best Practices


IntroductionSherry Hibbs, VP Sales & Relationship 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

• 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

Page 6

*Sources: Glenbrook Commercial Card Sizing, 2012; MasterCard Analysis, 2013

25%

20%

15%

10%

5%

0%

-5%

-10%

2007 2008 2009 2010 2011 2012 2013 2014 2015

Commercial Card GDP Growth


The untapped Commercial Card opportunity is tremendous in the U.S. and Canada

Sources:1D&B, 2013; 2B2B International SME research, 2011; 3Nilson, 2012 & MasterCard Analysis, 2012; 4Kaiser Associates, 2012 & MasterCard Analysis, 2013

Total Spend Estimate

Cardable Opportunity

Carded Volume

Only 1.6% of total Middle Market spend is

currently captured on card

March 19, 2013

Only 1.2% of total Middle Market spend is

currently captured on card

Canadian Middle Market SegmentU.S. Middle Market Segment

$180B4

$1.0T4

$11B4

$7.8T1

$1.9T2

$121B3


Enhanced Spend Analysis – Realign Forms of Payment

Source: First Annapolis Consulting / Commercial Card Market Landscape February 2012


Working Capital Management


Travel & Entertainment Card Best Practices

• Benchmarking Peer Groups

• Payment Method Analysis

• Air /Hotel /Car Rental Price Audit

• Rewards/Rebates

• Compliance

• Technology Usage


The Value of P-Card vs. Traditional Purchase Order Process

Using a P-Card vs. a traditional Purchase Order process saves almost $74 per transaction

Source: RPMG, 2012

$90.77

$73.53saved

$17.24


Breakdown of the Value of P-Card vs. Traditional Purchase Order Process

Breakdown of Value of P-Card vs. PO Process

Using a P-Card generates savings during the sourcing, procurement, and invoice/payment/reconciliation process

Source: RPMG, 2012


Strong Card Acceptance

• 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)

Customer Service

• 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

Rewards • Points to miles on major airlines• Customized reward capability• Unlimited redemption options

Fraud Coverage • Included in cardmember and contractual agreements

Travel Accident Insurance

• Comprehensive insurance to meet Business Travelers needs

• Insurance that delivers value.

RebateOpportunities

• Financial considerations that will vary between types of card accounts implemented.

• Payment terms, annualized charge volume, and rewards participation factors in calculations.

Baggage Insurance

• 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

What can you expect from your card provider? Card Benefits and Features


MCC Restrictions

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.

Specific Supplier Blocking

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.

Card Controls


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 ofthese 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 recognizesthe commercial card type, and evaluates the transaction against any organizationcard 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.

Card Validation

Card Blocking &Controls

Early Fraud DetectionEvaluation

All attempts to authorize a transaction on a card product pass through four distinct processes:

PhysicalEvaluation

Commercial Cards provide significantly less risk than other methods of payment than an organization may have in place today.

Protecting Against Fraud & Misuse


Data Enables Efficiency

Enhanced data brings

significant efficiency to

your expense reporting

system.

17:00

20:00

11:00

28:00

7:00

8:006:00

14:00

76:00 Minutes

35:00 MinutesOverall Savings: 54%

Paper Based Electronic Pre-populated

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

Time for traveler/cardholder to fill out an expense report

Source: RPMG 2013


Expense Management Technology Best Practices


Introducing Robin Hanselman Director Sales US West Chrome River

• 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 WhiteDirector Corporate Sales Chrome River

• 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

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Simple and Intuitive to Use

– User-focused design

– Completely configurable

Business rules engine

– Most powerful workflow

– Highly flexible policy configurations

Ease of Integration

– Financial Systems – enterprise data exchg

– Billing systems, Payroll, Projects

Broad Accounts Payable Automation Platform

– EXPENSE, INVOICE, PO, ANALYTICS


Expense Management Technology Best Practice #1: Automate Expense Capture


The Argument Against “Free”

• 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


Simplify Receipt Capture

Snap and Send


Expense Management Technology Best Practice #2: Have an Accountable Plan


What is it and why is it important?

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

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

• 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


Expense Management Technology Best Practice #3: Automate Policy Enforcement


Business Rules Engine

Configurable Expense Policies

Configurable Approval Routing Rules

Configurable Tax Rules, etc.


Example - Built in Compliance Rules


Example - Client Specific Compliance Rules


Expense Management Technology Best Practice #4: Have a Clear Approval Process


Suggestions for Approval Process

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

• 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!


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


Other Benefits

• Cost savings

– No more paper checks and manual processes = savings

• Efficiency

• More timely payments

• Enhanced Compliance


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



• Analyze Expenses by Client or Project

BENEFIT – Determines the ROI of a fixed fee project.



• 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


Q & ARound Table


THANK YOU!Sherry Hibbs, BMO Diners Club/MasterCard

Robin Hanselman, Chrome River Technologies

Stephen White, Chrome River Technologies

Documents

Sherry Hibbs, VP Sales & Relationship Management BMO Harris Bank