T&E Plus

Video: 4 Secrets of Card Payments

Corporate Credit Cards, Procurement Cards, Meeting Cards and Ghost Cards have become a common payment method in the travel and meeting industry. And, rightly so, because paying for products or services via a Card vs. the traditional Accounts Payable method saves an organization an average of $63* per transaction.

(CLICK on GRAPHIC to go to VIDEO).

Secret #1 – Spend itemization is GREAT when using a Card compared to Accounts Payable traditional methods.  When Suppliers populate the various levels of data, a Card will provide you with detailed spend information.  Whereas an invoice may be itemized by General Ledger codes, the process may be time consuming vs. obtaining the data through a Card. (See the Video for detailed information)

 

2.  Secret #2 - It is a good practice to use a division of responsibilities to prevent fraud when paying by card or check request.  Best practice organizations will divide the responsibilities among the meeting planner, a Card Administrator, and Accounts Payable. When one industry consultant failed to recommend this Division of Responsibilities to a client, the client experienced significant fraud and went back to using purchase orders and checks.  Unfortunate for this Organization, because the Card fraud risk could have been mitigated.  (See the Video for a Division of Responsibilities)

3. Secret #3 – There are savings / cost avoidance opportunities by using a Meeting Card or P-Card in organizations that allow their employees to collect Membership Rewards.  When Corporate Cards accrue Membership Rewards, and those cards are used to pay for meetings, your organization may be losing valuable rebate money. (See the Video for an example calculation).

4. Secret #4 - Learn to Calculate your Surcharge Fees - and Improve your Contract Language.  With the new allowable Surcharge in 40 states, it is important to rewrite your contract language and calculate the potential fees. These surcharges have been allowed in other countries, but only became allowable in the U.S. as of January 27, 2013.  (See the Video for an example calculation). 

And, don't forget to ask your Credit Card company the following questions:

In response to the additional surcharge that establishments may charge, is the Credit Card company prepared to:

a) identify, in advance, which establishments will charge the fee?
b) report fees immediately after they are incurred?   And, report fees monthly?
c) begin creating a database of the establishments that are charging the fees?  And, communicate this information monthly to your clients?

Using a Meeting or P-Card is the best way to pay for your meetings, events and other products / services.  Interesting tidbit for you...The American Express Meeting Card was developed when PricewaterhouseCoopers (PwC) meetings leaders recognized that hotel payments were often delayed through the onerous accounts payable process.  Those leaders meet with their financial card company, American Express, in the hopes of identifying a new payment solution for meetings.  It was the PwC payment needs and ideas given to American Express that launched the meeting industry's widely acclaimed Meeting Card.  The Meeting Card has evolved over the years and has been a successful meetings payment method for hundreds of organizations. 

Be sure to watch the Video to learn more about these 4 Secrets of Card Payments.

Scholar Consulting Group provides with you with the most tools and templates to manage your T&E or  Meetings program.

Available for download, three industry firsts!

• Download 12 Ways to Improve your Meetings Program Launch by Debi
• Link to the industry's first standard Strategic  Meetings Management Request for Proposal for Services
• Download Meeting Management Technology RFP

We hope you have a lovable February, lead with your heart, and live by one of my mottos:  Make it FUN and WIN!

Debi Scholar

*National Association of Purchasing Card Professionals

Develop a Compliance Strategy

Travel, meeting and expense policies that are well-defined and frequently communicated provide a robust foundation for adherence to legal and regulatory compliance requirements. Compliance in travel, meetings and expense management is primarily itemized into a) policy compliance and b) legal and regulatory compliance. Before an organization can monitor and manage compliance, it must identity the proactive behaviors and processes, and communicate the expectations preemptively before the behavior or process occurs. 

Consider these conundrums: 

• A client wants to ensure that senior vice presidents or leaders with titles above that level sign all contracts. Yet, the reluctant procurement leaders prefer not to mandate their meeting policy nor communicate it thoroughly because these activities may deter employee morale.
  
  
• A client needs to monitor travel costs and identify traveler whereabouts. Yet, the leaders allow unrestrained travel bookings through unmonitored processes because the leaders do not want to dissuade creativity through imaginary boundaries.

Dichotomy set aside of these true stories, some organizations do not believe that travel and meetings should be compliance-driven as part of its responsibility to maintain financial controls and manage risks. Curiously, leaders of cash cow organizations tend to abolish the proper management of indirect spend categories that seem to operate fine "as is." 

For those leaders and organizations that recognize that T&E spend and meetings requires policies and compliance to maintain financial controls, consider the use of the SCG C6-step© process to develop your compliance strategy:

1.  Identify and Categorize compliance requirements:  What behavior, process, or risk do you want to monitor and manage compliance to? Are there risks that could be exposed without the compliance?  Brainstorm the risk exposure to non-compliance in the SCG© seven risk categories of strategy, reputation, operations, regulatory/legal, information technology, market position, and financial impact.  

2.  Chart and rank compliance requirements:  What level of risk is estimated for each of the identified risks? Is the compliance requirement a high risk with a high likelihood of occurrence? Medium or low risk? Create a risk impact graph to map and rank the risk exposure which will provide you with the roadmap to risk mitigation and compliance plans.  For example, an organization may recognize that there is a high risk and high likelihood that unmanaged meeting contracts do not include the organization's required business terms. Legally, this could affect the outcome of litigation should an incident occur.

3.  Create proactive Controls:  What can be put in place to proactively mitigate risks so that compliance will be achieved?  What policies need to be developed or improved? For example, if standard contracts or addendums include the organization's business terms, put policies and processes in place so that sourcing and contracting activities use the standard contracts or addendums without allowing for misdirected contracts.

4.  Use Change management to drive adoption to policies and processes:  What types of change management, education and communication activities are required to bring awareness to the compliance requirements?  For example, use numerous communications mediums to educate everyone on using the standard contracts or addendums.

5.  Collect data before and after the meeting for thorough reporting:  What types of data intelligence do you have? From what systems or processes?  How can data be collected before non-compliance occurs?  For example, is it possible to obtain forecasts of upcoming meetings and ensure that the standard contract or addendum is used which would reduce risk exposure?  How can data be collected after the meeting occurs?  For example, is it possible to poll suppliers and/or budget holders for meetings that have been held that did not use the standard contract?  Is it possible to use this data to report non-compliance to business leaders? Data intelligence, through metrics, provides reactive policy monitoring such as highlighting the employees who failed to use the online booking tool, spent more than what is deemed "normal" in restaurant expenses, or ignored the lowest airfare.

6.  Determine Consequences for non-compliance:  What will be the consequences for non-compliance?  Are fees imposed for regulatory non-compliance?  For example, if a meeting budget holder does not use the standard contract or addendum, will the issue be escalated?  Are there tiered consequences for repeat offenders? Consequences for non-compliance may include warnings, non-payment of expenses, or termination.  

For example, if an organization wants to:

• Ensure that employees use the preferred travel booking method, then it could communicate these expectations, enforce the travel policy, audit expenses, and impose consequences for non-compliance; and/or
• Limit its spend per day, per person, per meeting, then it could communicate these expectations, enforce the meeting policy, audit meeting spend, impose consequences for non-compliance, and add controls to its meeting management technology to alert meeting planners when the costs exceed a predefined amount.

Codes, Codes, Codes…

Selecting suppliers fairly through the use of request for proposals and evaluation scorecards fulfills some of the Sarbanes-Oxley guidelines.  In the pharmaceutical and medical devices industry, additional requirements are necessary so that the organizations abide by the PhRMA or AdvaMed code or other codes based on country requirements. The Physician Payments Sunshine Act reporting requirements will begin soon.

In the financial and insurance industry, additional requirements may be necessary based on the Dodd-Frank Wall Street Reform report and the Consumer Protection Act.  The report came out and recommended that uniform fiduciary standards are appropriate for the industry but they have not been passed yet. However, organizations are preparing by getting their meeting/event strategy, processes, and technology in order now.

If you and your organization need to create, update or audit your compliance strategy, contact me.   Look for the upcoming BTE November article on compliance, with interviews with key leaders, at Business Travel Executive.  For other BTE articles on Strategic Meetings Management, search for "Scholar" in the site-wide search box.

A BIG THANK YOU to all of the meetings and travel leaders who continue to support me through the T&E blog, LinkedIn groups, client engagements and most important, your friendship.

Thank you for visiting the T&E Plus Blog on expense management, travel management, business meetings, events, incentives, strategic meetings management, entertainment, virtual meetings, tickets, hotels, airlines, ground transportation plus more...

Debi Scholar, GLP, CMM, CMP, SSGB, CTE, CTT

•           Author, Strategic Meetings Management: The Strategy Quick Reference Guide (2011)
•           Meetings Management Mover and Shaker as selected by Corporate and Incentive Travel Magazine (2010)
•           Top 20 Changemaker who influenced the meetings management industry by Corporate Meetings and Incentives (2008)
•           Best Meeting Practitioner as selected by Business Travel News (2007)

*Debi is proud to be a regular contributor to Business Travel Executive Magazine.
*Debi is proud to be one of only seven 2011 Editorial Board members for Hotel Business Review at http://www.hotelexecutive.com/ for Conferences & Meetings.
*Debi created two LinkedIn groups (GBTA SMM and T&E Plus) that now claim over 2,000 worldwide members combined.

Visit me at one of my upcoming speaking engagements; Topics vary per conference

Some sessions include components of SMM Bootcamp© and/or SMM Challenge© 

November 9 – NJBTA and ISM joint meeting
December 1 – EMC Venue’s MEET
January – PCMA
March – Meetings Technology Expo

Reclaim your Value Added Taxes

If you had a rebate coming to you, would you claim it?  Most likely, right?  In today’s economy, we need all the cash that we can get.  Yet, may organizations leave thousands of dollars (and other currencies) unclaimed.  How? Organizations fail to reclaim Value Added Taxes.   Learn from an expert, Mark Houtzager, how to reclaim the Value Added Taxes for your organization.

Mark and I worked side-by-side to help our clients uncover Value Added Tax opportunities at PricewaterhouseCoopers.  Specifically, I remember the unfortunate situations when our clients had lost thousands of dollars on expired Value Added Taxes.  Thank you to Mark for writing this guest blog on Value Added Taxes for T&E Plus.

Following content is by Mark Houtzager, US-VAT

Value-Added Tax (“VAT”) is a broad-based sales tax that is levied in almost every country outside the U.S. - it also goes by the name of Goods and Services Tax (“GST”). It is not for the squeamish – typical rates are around 20% (in the UK, for example), and anyone who is responsible for overseas supplier management should understand what the impact of VAT can be on their bottom line.

VAT is charged on pretty much every supply – be it goods or services. The VAT rules in the 27 member states of European Union are centrally regulated – they are all based on a European Directive. This Directive has been simplified over the past couple of years, and with some exceptions all services that are provided to non-resident businesses are now free of local VAT.

The exceptions, unfortunately, include catering and lodging, as well as various local expenses, such as transportation and admission fees. These services will continue to attract local VAT in the country where they are provided.

The good news is that a number of countries provide the opportunity to obtain a refund of these VAT charges. There are many boutique firms that can help you with these filings – I work with Corporate VAT Management (www.autovat.com), because they apply a smart process to analyze the credit-card or p-card data. With many small charges for many individual travelers it is easy to overlook refund opportunities, and this data analysis ensures that every charge that appears on the credit card is included in the refund request.

Even though there is still a need for dealing with VAT, the new European VAT rules have significantly simplified the tax position for event organizers and attendees. Filing and compliance requirements have been minimized, and the number of services that attract VAT has been decimated.

If you want to know more about VAT, please read Mark's website and blog: www.us-vat.com, or e-mail him at [email protected].

Visit Debi at one of her upcoming speaking engagements:
Topics vary per conference
Some sessions include components of SMM Bootcamp^© and/or SMM Challenge^© 

March 17 – MPI SCC Educational Tradeshow and Conference
March 18 – EMC Venue’s Annual Buyer Supplier Summit – SMM Bootcamp^©
March 31 – ISM’s Conference on Managing in Times of Uncertainty
April 10-12 – ACTE Global Education Conference
May 20 – MPI Orange County’s 6^th Annual Education Conference and Expo
May 25 – Financial and Insurance Meeting Planners Conference
June 30 – EMC Venue’s MEET
August 2 – Georgia BTA
Sept 7 – HSMAI Affordable Meetings
December 1 – EMC Venue’s MEET

Thank you for visiting the T&E Plus Blog on expense management, travel management, business meetings, events, incentives, strategic meetings management, entertainment, virtual meetings, tickets, hotels, airlines, ground transportation, T&E policy, plus more...

Debi Scholar, GLP, CMM, CMP, CTE, CTT, Six Sigma Green Belt

• Meetings Management Mover and Shaker as selected by Corporate and Incentive Travel Magazine (2010)
• Top 20 Changemaker who influenced the meetings management industry by Corporate Meetings and Incentives (2008)
• Best Meeting Practitioner as selected by Business Travel News (2007)

The Scholar Consulting Group LLC
[email protected]
908-304-4954
Benchmark your Strategic Meetings Management Program:  http://www.smmbenchmark.com

Debi has the following designations:

• Wharton Aresty Executive Education/National Business Travel Association (NBTA) Global Leadership Professional (GLP)
• Meeting Professionals International Certificate in Meetings Management (CMM)
• Convention Industry Council Certified Meeting Professional (CMP)
• NBTA Corporate Travel Expert (CTE)
• Six Sigma Green Belt
• Chauncey Certified Technical Trainer (CTT)

The Frugal Leader’s Travel and Meeting Policy

An updated T&E Plus rerun and some fun as we move into 4^th of July and the summer travel season ....  enjoy the long weekend.

New Travel, Entertainment and Meeting Policy

1. All travel must be approved by your manager, the manager’s director, the managing director, the operations leader, the shared services vice president, the chief financial officer and the chief executive officer.  Please submit all travel requests four months in advance.
   
   
2. All large and small meetings, events, conferences or other gatherings of 2 or more people must be registered on the portal which is located at the home page.  Click on the link called meetings/events, then click on “register meeting,” then click on “why I want to have this meeting,” then click on “the return on investment” link to ensure your meeting returns value to the company, then click on “provide business case” as to why your meeting is important, then click on the link called, “why Las Vegas cannot be your destination for your meeting,” then click on the link called “how to save money on your meeting,” then fill out the registration page.  If you have any more questions on meetings, please read numbers 9 and 10 below.
   
   
3. All travel must be booked by finding the lowest fare such as using the online booking tool, the airline webfares, the travel agency, your sister’s travel agency, the newspapers ads, or the online travel aggregator sites.  We recognize that this may take you three or more hours, but if you can find a fare that is cheaper, you must take the time to search in order to save money.
   
   
4. Please stay with relatives or friends to reduce your expenses.  While you’re there, please raid their refrigerator to eliminate meal expenses.  If you are traveling to a location without relatives or friends, please make new friends online using Twitter.   If that fails, please retrieve the reusable tentage from the local office.
   
   
5. Laundry expenses are not reimbursable. Please use your relative’s or friend’s washer and dryer.
   
   
6. Ground transportation must be provided by your favorite shoe manufacturer and your feet.  If your journey is more than five miles, please be sure to carry maps of the local bus or subway route with you.  You will not be reimbursed for these expenses because you should be willing to walk as our Health Benefit costs are increasing and you need to lose weight.
   
   
7. Allowable client entertainment includes volunteering, going to the park or taking advantage of free events. 
   
   
8. The T&E corporate card must be used for all reimbursable expenses.  Our company has no reimbursable expenses.   Any accrued points must be turned over to your manager, the manager’s director, the managing director or the chief financial officer so that they may use to buy valuable products, such as soap and toilet paper for our company bathrooms because we have cut all janitorial supplies from our budget.
   
   
9. Internal meetings and events can only be conducted by virtual mediums. The approved virtual mediums include your personal cell phones, your personal computer and webcams.
   
   
10. External business development meetings and events can be held at the local park.  In the case of inclement weather, please use parks with gazebos, canopies or buildings.  If you require client entertainment, please bring a deck of cards.  No gambling is allowed. If you require bug spray, please purchase at your own expense.
    
    
11. All audiovisual and production requirements must be supplied by using flashlights, hand shadows and drawings on the back of the napkin.
    
    
12. All travelers and meeting attendees must bring travel sleep sacks, pillows, blankets and energy bars on all trips because you never know when a volcano will erupt, a storm will ensue, or a crisis will occur.  Dealing with the unexpected increases your tolerance for adverse situations so that you can adapt to our working environment.
    
13. All travelers should go to the local grocery store and eat from their "sample platters" to reduce food expenses.  Meeting planners should plan to have meetings in hotels that host weddings and bar/bat mitzvahs so that meeting attendees can snitch food from other guests in order to reduce food and beverage expenses.

 

Any violations or noncompliance to this policy will be reported by our data metrics, from the ERP, the OBT, the TMC, the EMS, and the SMM technology, that we build, analyze, preview, revise, reproduce, report and validate a few times each day.

Debi Scholar, CMM, CMP, CTE, CTT

Thank you for visiting the T&E Plus Blog on expense management, travel management, business meetings, events, incentives, strategic meetings management, entertainment, virtual meetings, tickets, hotels, airlines, ground transportation plus more...

Follow me on Twitter at:  http://twitter.com/debi001or at LinkedIN at http://www.linkedin.com/in/dscholar

Debi Scholar, GLP, CMM, CMP, CTE, CTT, Six Sigma Green Belt

Thank you for visiting the T&E Plus Blog on expense management, travel management, business meetings, events, incentives, strategic meetings management, entertainment, virtual meetings, tickets, hotels, airlines, ground transportation, T&E policy, plus more...

Debi has the following designations:

·     Wharton Aresty Executive Education/National Business Travel Association (NBTA) Global Leadership Professional (GLP)

·     Meeting Professionals International Certificate in Meetings Management (CMM)

·     Convention Industry Council Certified Meeting Professional (CMP)

·     NBTA Corporate Travel Expert (CTE)

·     Six Sigma Green Belt

·     Chauncey Certified Technical Trainer (CTT)

Debi was selected as:

• Meetings Management  Mover and Shaker by Corporate and Incentive Travel Magazine (2010)
• Top 20 Changemaker who influenced the meetings management industry by Corporate Meetings and Incentives (2008)
• Best Meeting Practitioner by Business Travel News (2007)

  

Follow me on Twitter ...http://www.twitter.com/debischolar  and on LinkedIN at http://www.linkedin.com/in/dscholar

The Un-CFO

As if there were springs in his Edward Green black leather split toe shoes, the Armani Black Suit hurriedly positioned himself in the northern most head seat, the one with the invisible CEO/CFO initials inscribed on the back like a director's chair, in the Executive Boardroom on the 34^th floor in lower Manhattan.  His Blackberry, permanently attached to his right hand, provided instant updates and irritating interruptions. 

He declared, “Our T&E expenses are under control; our meetings have been cut so I don’t believe there is a need for consulting services.” 

The Wall Street Journal recently reported that the conglomerate’s credit rating was downgraded by S&P, invoices were in arrears, and leaders were indifferent to questionable ethical behaviors.  One executive allegedly accepted a family vacation from a major hotel chain in exchange for sourcing a large company meeting at their venue.  Further, complimentary golf, spa and other free amenities were allegedly requested by organizers and leaders. In hotel hearsay, the company recently held numerous lavish events at 5-star properties with budget thresholds ignored.  The company’s board of directors demanded an immediate investigative cost reduction initiative for all direct and indirect spend categories to uncover expense anomalies and unethical behaviors. 

“We monitor our T&E spend carefully,” the CFO announced, “there is no reason for us to presume that travel or meeting spend is excessive. Besides, we cut almost all travel and meetings in 2009.” 

Travel and Entertainment expenses (“T&E”) are the second or third largest indirect expense in most organizations, yet many leaders overlook this compilation of costs because it is partitioned in numerous general ledger codes and over forty standard industrial and merchant category codes.  Like a skilled hog searching for truffles, it takes tenured professionals to detect the assorted charges through accounts payable, credit cards and expense management systems.  Often, covert organizers conceal and divide the costs across multiple budget holders to avoid exposure. The leaders have a legal and moral financial responsibility to their shareholders to reduce these and other indirect costs through process improvement and supply chain management. Yet, many fail to manage T&E expenses because leaders are:

1. unaware of the T&E spend impact;
2. uneducated as to how to control T&E;
3. unauthorized as T&E may be out of their control; or
4. uninterested due to a sense of entitlement of travel, rewards and amenities.

”We have a moratorium on new IT initiatives and do not believe that an expense management or meeting management technology is necessary in this environment” the CFO admits.  

According to A.T. Kearney, non-automated expense claims cost $42.98, which is 50 percent more than the $21.86 for a fully automated expense claim.  With 1,000 travelers in a month, the savings could accumulate up to $21K in processing costs.  Moreover, a meeting management technology would provide visibility into the actual quantity and costs of large and small meetings while improving the overall process. 

Squirming in the mahogany executive chair and fidgeting with his perfectly straight tie, he continued “I’m confident that there is minimal fraud in our organization, therefore, it isn’t necessary to search or track something that really doesn’t exist.”  

Expense reimbursement fraud is one of the nine subcategories of asset misappropriation fraud.  In a study of 959 occupational fraud cases conducted by the Association of Fraud Examiners in 2008, 13.2% were expense related with an average loss of $25K. 

Interjecting his opinion over sound leading practices, the CFO regressed, “Our organization does not require T&E consulting. Thank you for your time today.” 

As a dichotomy between fact and the CFO’s perception, the most recent annual report highlights a higher than projected Selling, General and Administrative (“SG&A”) expense, of which T&E expenses are a part, compared to a lower than forecasted revenue on their income statement. 

 

Debi Scholar, GLP, CMM, CMP, CTE, CTT

Thank you for visiting the T&E Plus Blog on expense management, travel management, business meetings, events, incentives, strategic meetings management, entertainment, virtual meetings, tickets, hotels, airlines, ground transportation, T&E policy, plus more...

Debi has the following designations:

· Wharton Aresty Executive Education/National Business Travel Association (NBTA) Global Leadership Professional (GLP)

· Meeting Professionals International Certificate in Meetings Management (CMM)

· Convention Industry Council Certified Meeting Professional (CMP)

· NBTA Corporate Travel Expert (CTE)

· Six Sigma Green Belt

· Chauncey Certified Technical Trainer (CTT)

Follow me on Twitter ...http://www.twitter.com/debischolar  and on LinkedIN at http://www.linkedin.com/in/dscholar

The information contained in this Web site is provided for informational purposes only, and should not be construed as legal advice on any matter. This information does not represent the opinions of any other party other than the author.  The links to other publicly available Web sites are provided as a convenience; we make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information provided.

 

Negotiate your Corporate Card Terms

Large, mid-size and small organizations with any kind of spend, in the U.S. or globally, should use enterprise-wide corporate cards to pay for everything from travel and entertainment expenses to legal services in order to increase the card rebate, gain visibility into expenses, decrease fraud and reduce accounts payable cycle time.   Although the move to an enterprise corporate card system feels like a complex initiative, the implementation produces a streamlined business process.   Even organizations that have already implemented a corporate card may question how to negotiate with behemoth financial institutions. 

There are fees, there are rebates, there are services.  All these, and there are different products.  When corporate card contract knowledge is mastered through education, comparison and calculations an organization will gain the most benefits.  Lets start with the fees.

Fees, like a bee sting, may come unexpectedly, hurt and put the most congenial in a foul mood.  Fees for cash advances, foreign currency exchanges, delinquencies, premium cards, technology integration and others not mentioned here are all negotiable.  The most complex calculation is the negotiable client held days or the quantity of days before a charge is considered delinquent.  Don’t let them bamboozle you…this is negotiable by some institutions although they often hold court with only the biggest spenders. Still another complex calculation...the basis points used to calculate the hard earned incentive.  

 

Rebates, incentives and signing bonuses are like birthday presents for the CFO.  Yet, many organizations lose valuable monies because membership rewards and delinquency fees may be deducted from the incentive, and results in a lesser financial prize.  Two ways that organizations can mitigate the loss are to restrict personal spend on the corporate card and pay the financial institution directly.  Contract signing bonuses should take the entire contract length into consideration and if the contract is cancelled, include a prorated pay-back clause.

For Ritz quality regardless of spend, mutually agreed upon service level agreements (“SLA”) may aid in service quality and timeliness for card issuance and replacement, statement delivery methods, call resolutions, and standard and custom reports.  Just as SLAs elevate performance expectations, the quarterly supplier meetings measure the financial institution’s execution.

The number of card products and suppliers continue to expand, just like America’s waistline.  From procurement cards, to corporate cards, to meeting cards, to fuel cards, to fleet cards, to Airplus cards–all have unique functionality and benefits.  Compare the costs, rebates, services and features before selecting a card product and supplier.  And, to answer my client’s corporate card questions from yesterday … yes, there IS a difference and I’m here to help you.

Thank you for visiting the T&E Plus Blog on expense management, travel management, business meetings, events, incentives, strategic meetings management, entertainment, virtual meetings, tickets, hotels, airlines, ground transportation, T&E policy, plus more...

Debi has the following designations:

· Wharton Aresty Executive Education/National Business Travel Association (NBTA) Global Leadership Professional (GLP)

· Meeting Professionals International Certificate in Meetings Management (CMM)

· Convention Industry Council Certified Meeting Professional (CMP)

· NBTA Corporate Travel Expert (CTE)

· Six Sigma Green Belt

· Chauncey Certified Technical Trainer (CTT)

Follow me on Twitter ...http://www.twitter.com/debischolar  and on LinkedIN at http://www.linkedin.com/in/dscholar

The information contained in this Web site is provided for informational purposes only, and should not be construed as legal advice on any matter. This information does not represent the opinions of any other party other than the author.  The links to other publicly available Web sites are provided as a convenience; we make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information provided.

T&E Fraud and the Impact on Your Business

Fraud costs organizations millions of dollars, causes employee embarrassment, damages corporate image, and intensifies legal and regulatory liabilities. Because many employees have the ability to charge Travel and Entertainment ("T&E") expenses, and the opportunity exists, T&E fraud is an unknown epidemic in many organizations. Let's look through a magnifying glass into T&E fraud triggered by employees and understand who may be the perpetrators, why the fraud occurs, what type of fraudulent actions are common, how much it costs, and how to control it.

 

Employees who feel disenchanted with their job, or may need extra money, are not the only offenders of T&E fraud. In the Occupational Fraud and Abuse Classification System,* conflicts of interests and bribery are categorized as corruption.  In fact, some unethical behaviors that may be deemed a conflict of interest, such as personally redeeming meeting planner points that result from organization spend, and belong to the organization, may appear rational unless the company policy states that the points should be used to benefit the organization, not the individual.  If the action appears sensible, the difference between fraud and unethical behavior often lies within the company policies and guidelines.  Too often, fraud may result purposely by employees who know their wrongdoings, or innocently by employees who do not know about or understand company policy. Countless types of T&E fraud and unethical behavior occurs everyday in organizations.

 

The following examples do not represent an all-inclusive list of T&E fraudulent activities.  Fraud or unethical behavior results from employees who:

1.    create fictitious hotel bills or other bills and expense it

2.    copy, and reclaim, receipts in a future expense report

3.    expense false "below the line" expenses when receipts are not required

4.    overstate charges by expensing more than the actual costs

5.    take friends and family for meals, to entertainment venues, or on trips and expense the charges erroneously

6.    pay for products or services that are wholly or partially used for personal use

7.    collect hotel or vendor commissions that are due to the company

8.    collect and personally use meeting planner points (which are different than individual hotel rewards points) for placing meetings and events at properties

9.    use their corporate cards for personal use in order to collect rewards points that cost the organization more money for the contract with the financial services company

10.  use meeting and event suppliers that may provide something personal in return such as free trips, room nights, spa service, car service, floral service, entertainment, extra rewards points, or other amenities

11.  book company-expensed airline tickets, cancel the trip, and use the unused credit for personal travel

 

 

According to a recent survey asset misappropriation represents 88% of all fraud and corruption and bribery represents 16% of fraud.  Many organizations use internal audits as their primary investigative method; yet, many internal audit teams do not know how to find, monitor or value the fraud listed in numbers 7 through 11 above.   

 

Without a managed travel, meetings and entertainment program in place that aids in pre-empting these fraudulent practices, companies are vulnerable.  Seven percent of an organization's annual revenues are lost to fraud according to the Association of Certified Fraud Examiners 2008 Report to the Nation on Occupational Fraud & Abuse.  How much is your organization losing because of T&E fraud? And, how can you reduce it?

 

While some organization leaders may be cavalier about the loss of revenue because they do not believe the lost value is excessive, there are more reasons to cauterize fraud.  Organizations may breach competition laws or stimulate SEC scrutiny with even small-value incidents.  One example using the four-step process on how to Prevent, Identify, Mitigate and Educate (PIME) is shown below:

 

 

HOW TO:	Prevent	Identify	Mitigate	Educate
Identify the value of the meeting planner points that are redeemed for personal use	Centrally collect all meeting planner points to use for company business travel, donate to the charity of choice, or disallow all meeting planner points	Review meeting and events contracts with properties and audit the points received for redemption activity	a) Strengthen the strategic meeting management program so that designated staff procure meetings and events b) Centralize all meeting and event processes and procurement through technology to gain visibility into total volume	a) revise policy b) communicate and market that meeting planners points must be used for business use

 

 

Fraud increases during economic downturns. As such, it is more important now than ever before to focus efforts on how to reduce fraud in your organization. If you want help with T&E fraud, please contact me.

 

Debi Scholar, GLP, CMM, CMP, CTE, CTT

 

* Association of Certified Fraud Examiners 2008 Report to the Nation on Occupational Fraud & Abuse

 

Thank you for visiting the T&E Plus Blog on expense management, travel management, business meetings, events, incentives, strategic meetings management, entertainment, virtual meetings, tickets, hotels, airlines, ground transportation, T&E policy, plus more...

 

Debi has the following designations:

· Wharton Aresty Executive Education/National Business Travel Association (NBTA) Global Leadership Professional (GLP)

· Meeting Professionals International Certificate in Meetings Management (CMM)

· Convention Industry Council Certified Meeting Professional (CMP)

· NBTA Corporate Travel Expert (CTE)

· Six Sigma Green Belt

· Chauncey Certified Technical Trainer (CTT)

 

Follow me on Twitter ...http://www.twitter.com/debischolar  and on LinkedIN at http://www.linkedin.com/in/dscholar

The information contained in this Web site is provided for informational purposes only, and should not be construed as legal advice on any matter. This information does not represent the opinions of any other party other than the author.  The links to other publicly available Web sites are provided as a convenience; we make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information provided.

Corporate Social Responsibility in Travel and Meetings

How do you measure your travel and meetings Corporate Social Responsibility ("CSR") program?   What are your CSR priorities?

CSR is a business approach to create long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments according to the Dow Jones Sustainability Index.

The three CSR dimensions, Economic, Environment and Social, include numerous criteria to manage and measure as shown below:

CSR Dimension	Criteria
Economic	· Codes of Conduct/Compliance/Corruption & Bribery · Corporate Governance · Risk & Crisis Management and other industry-specific criteria
Environment	Environmental Reporting which may include: · Greenhouse Gas Emissions ("GHG") · Energy Consumption · Water use · Waste · and other industry-specific criteria
Social	· Corporate Citizenship/Philanthropy · Labor Practice Indicators · Human Capital Development · Social Reporting · Talent Attraction and Retention · and other industry-specific criteria

Using a maturity model approach and scorecard, I help companies create a travel and meetings baseline so that organizations can measure the current status and begin improvements.  In addition to the above criteria, a strategic plan with tactical objectives provides the foundational roadmap for organizations.  

Today, three speakers will be sharing leading practices on CSR in meetings and events as part of the StarCite-sponsored webinar in Virtual Meeting World at 2:00 pm EST.  I will be sharing the maturity model and leading practices on how to best manage this important initiative in your organization.  If you are interested in participating, navigate to www.virtualmeetingworld.com. 

 

If you want more information or help with your CSR program, contact me.

Debi Scholar, GLP, CMM, CMP, CTE, CTT

Thank you for visiting the T&E Plus Blog on expense management, travel management, business meetings, events, incentives, strategic meetings management, entertainment, virtual meetings, tickets, hotels, airlines, ground transportation, T&E policy, plus more...

Debi has the following designations:

· Wharton Aresty Executive Education/National Business Travel Association (NBTA) Global Leadership Professional (GLP)

· Meeting Professionals International Certificate in Meetings Management (CMM)

· Convention Industry Council Certified Meeting Professional (CMP)

· NBTA Corporate Travel Expert (CTE)

· Six Sigma Green Belt

· Chauncey Certified Technical Trainer (CTT)

Follow me on Twitter ...http://www.twitter.com/debischolar  and on LinkedIN at http://www.linkedin.com/in/dscholar

How much did your organization spend on meetings, events, incentives and group travel last year?

If your CFO, or another leader, asked this question, can you provide the answer?  Do you know how many internal and external meeting planning professionals were involved in planning meetings and events? Do you know how many executive assistants, marketing or human resource associates planned meetings?   Do you know how many small and large meetings were held globally across all business units?  Can you answer any of these questions within a matter of an hour?

 

On September 17, five insurance companies will testify before the House Oversight and Government Reform Domestic Policy Subcommittee to explain their business model, expenses and insurance coverage.   Representative Henry Waxman sent a letter last month to 52 health insurance companies and asked the chief executives for detailed data on all "conferences, retreats or other events" held since 2007, in addition to compensation and revenue information for the years 2003 through 2008.

 

According to Mary Ann McNulty, content director at ProMedia.travel LLC,  the committee asked for "a table listing all conferences, retreats or other events held outside company facilities from Jan. 1, 2007, to the present that were paid for, reimbursed or subsidized in whole or in part by your company, as well as the purpose of such events and documents sufficient to show the location, number of participants and all expenses incurred, including transportation, lodging, food, entertainment or gifts."

 

Government rights and protocol aside, all organizations, companies, governments, and non-profits should be able to produce an accounting of spend for their owners, stockholders, constituents or donors.  Meetings and events are necessities to build relationships, improve skills, incentivize behaviors, and sell products and services.  Yet, few organizations oversee the spend, resources and risks of meetings and events. 

 

As I told Mary Ann last week, companies that have a comprehensive strategic meetings management program (SMMP)* in place may be able to meet the data requirements of the committee.  Meeting management technology is the enabler of the SMMP components and has the ability to capture all of the meeting data requirements.   In addition, a mandated policy is required across all business units for small and large meetings. 

 

My advice:  Do not wait for a government inquiry, an internal audit, or the CFO to come knocking at your door.  Instead, conduct a meeting and event spend analysis of all accounts payable, Procurement-card and travel and expense corporate cards NOW. 

 

1. Find the meeting, event and group travel spend;

2. Update the T&E and Meeting/Event Policy; and

3. Create and implement a strategy, process and technology to capture all meeting and event spend

 

A global meeting spend analysis can be completed within days. Be prepared to answer the questions above at any time, for any leader.  Contact me for help with your spend analysis, the meeting strategy, process or technology requirements.

 

http://www.management.travel/news.php?cid=meetings-health-insurance-probe.Sep-09.10

http://domesticpolicy.oversight.house.gov/story.asp?ID=2581

 

*SMMP Components include a meeting and event strategy, policy, registration/tracking of the meeting/event, approvals, procurement/sourcing, planning/execution, payment/expense reconciliation, data analysis/reporting and a meeting management technology as defined by the National Business Travel Association.

 

 

Debi Scholar, GLP, CMM, CMP, CTE, CTT

Thank you for visiting the T&E Plus Blog on expense management, travel management, business meetings, events, incentives, strategic meetings management, entertainment, virtual meetings, tickets, hotels, airlines, ground transportation, T&E policy, plus more...

 

Debi has the following designations:

·         Wharton Aresty Executive Education/National Business Travel Association (NBTA) Global Leadership Professional (GLP)

·         Meeting Professionals International Certificate in Meetings Management (CMM)

·         Convention Industry Council Certified Meeting Professional (CMP)

·         NBTA Corporate Travel Expert (CTE)

·         Six Sigma Green Belt

·         Chauncey Certified Technical Trainer (CTT)

 

Follow me on Twitter ...http://www.twitter.com/debischolar  and on LinkedIN at http://www.linkedin.com/in/dscholar

 

Where do you find T&E spend?

Where do we find T&E spend? What is T&E spend?  Most call it Travel and Entertainment; some call it Travel and Expense.  Regardless of what you call it, most organizations spend millions of dollars on it annually.  And, look beyond corporate card data to truly understand your organization's buying behaviors.

 

When I help our clients manage the T&E spend, it isn't enough to only look through the T&E corporate card data.  Transient, or business, travel is usually found in the T&E spend, yet Accounts Payable includes a fair share of airline, hotel, ground transportation and other ancillary spend data.  Strategic sourcing leverages the total spend.  This diagram helps describe the complexity of this category:

 

 

 

    

A recent Aberdeen Group report shows that out of the top five challenges in managing T&E expenses, "visibility into T&E spend data" was the second greatest concern surpassed by "enforcing policy compliance."  . 

 

We can affect strategic sourcing successes with only T&E corporate card data, although if we have all of the data, we may be more successful in negotiating lower prices by moving market share with a greater volume of spend.

 

Does anyone else get that exhilarating feeling when they open a database that includes all of the spend data, or is it just me?  If you want help corralling your spend, contact me.

For more information on the Aberdeen Group, please visit:  http://www.aberdeen.com/

 

 

Debi Scholar, CMM, CMP, CTE, CTT

Thank you for visiting the T&E Plus Blog on expense management, travel management, business meetings, events, incentives, strategic meetings management, entertainment, virtual meetings, tickets, hotels, airlines, ground transportation, T&E policy, plus more...

Follow me on Twitter ...http://www.twitter.com/debischolar  and on LinkedIN at http://www.linkedin.com/in/dscholar