The Impact of Effective Expense Management

Announcer  00:29

Okay, well welcome everyone to today’s webinar titled The Impact of Effective Expense Management. This is Brian from Strategic Treasurer. And we’re pleased you could join us as we consider the costs and challenges of inadequate expense management, as well as proven strategies for implementing streamline processes. But before I introduce today’s speakers, I have just a few quick announcements. Zoom offers several different ways for us to interact today. If you would like to post comments or questions viewable by all attendees, please use the chat icon in the toolbar. If you’d like to ask your question to just the presenters, please use the q&a icon in the toolbar. You can ask your questions at any time during the presentation and we’ll try to get to as many as we can. But if we don’t get to your question, someone from our team will gladly follow up with you. They’ll also be a few polling questions throughout today’s webinar, where you’ll be able to select your response from a list of multiple choices, you will need to click the submit button on the polling questions to have your response recorded. If you are here for CPE credits, you will need to answer at least three polls today. And last, please ensure that your zoom display name includes both your first and last name, so we’ll know to whom we should send the credits. Our speakers for today are Danny Martucci, General Manager of commercial card and expense at Corpay. Rakesh Fifadra, Director of Product Management at Corpay, and Craig Jeffery, Founder and Managing Partner of Strategic Treasurer, welcome to Danny, Rakesh, and Craig, and I’ll now turn the presentation over to you.

 

Craig Jeffery  02:16

Thank you so much, Brian. And it’s good to have everybody join in the morning or the afternoon, wherever you’re from. Thanks for taking some time out of your day. Danny and Rakesh. I think this is our first webinar together. I’m delighted to have to be able to share the floor with both of you.

 

Danny Martucci  02:34

Yeah, thanks for having us. Great.

 

Craig Jeffery  02:38

Well, let’s let’s get started. What are we going to cover today? Brian already gave a readout of the overall content. From a descriptors standpoint, here’s our agenda. So what are we talking about? So making purchases, the reality of business? What are we talking about there? This is the necessity of, you know, of everything related to making payments and being expense minded. So there’s a variety of options of handling the payables process and doing it in an effective, efficient manner. And that involves more than just the payment process or more than just the approvement process. It’s looking at things comprehensively. As we move over to expense management, what are the responsibilities and the ideals. So expense management has everything from budgeting, approval of expenses, the payment process, and nobody is an island unto themselves. There are there are connections to efficiency, which impacts an organization’s ability to scale. There’s the overall cost, there are implications for liquidity, and capital, which is near and dear to the Treasury. People on the calls heart so it touches many areas of an organization, then we’ll look at efficiency and effectiveness. What are the consequences? This is that topic or that ripple effect of, of efficiency, capital impact. inefficiency, creates or manual processes in particular, create inefficiencies or defects does create challenges in the process. Efficiency automation straight through processing improves communication throughout the process and the use of capital. Now we’ll look at strategies and points to consider so we’ll look at automation end to end processing. In particular, looking at the user experience, both partners and how, how you can go about assessing automation solution. So look at the comprehensiveness of the solution. The financial strength of the partner, the user experience that you get in working with particular vendors, and then the key takeaways, Danny and Rakesh will cover for four key topics that will summarize elements related to effectiveness, efficiency, how you evaluate companies, and then the concept of future proofing? I think we’ve heard that for a number of years, but this idea of how to create a scalable environment. So a number of a number of good elements to cover. That’s your agenda for today. And we’ll get Danny involved right from the start. So, Danny, maybe you could give us a review on? What’s the scope that we’re talking about here on expense management. I’ll turn it over to you. And again, welcome. Excellent.

 

Danny Martucci  05:32

Thank you, Craig, and hello to everyone out there. So really nice to be with you. But yeah, this is, you know, Corpay, this is how we think about kind of expense management, it’s kind of the framework we apply to, to when we’re advising clients on on how to effectively and efficiently manage their expenses. And it really starts with the Expense Types. So, you know, no, no, no surprise for most of the folks on this call, but but hey, the, the big categories that that need to be managed are really direct expenses, which are those that, you know, would typically hit the cogs line item on the on the p&l, but those are that are more direct and providing a good or service to your customers. So tools, materials, supplies. And then on the indirect side, labor is one that could kind of cross both categories, but But typically, especially for for, you know, product based business more on the indirect side, sales, administrative type type of things, right, it or or facilities, right, those that are not directly involved in the production of the of the the end product. So this, both of these are really key categories for expense management. And then the the other kind of lens we like to look at it through is, is kind of the process in which things are bought. So for any of these Expense Types, those can be purchased in a more centralized way, or decentralized way. And so what do we mean by centralized? Well, that’s typically spend that would be invoiced, it would come through an AP department, there would be typically a more limited set of core suppliers, and there be folks within the business that are centrally managing that that vendor relationship or that, that, you know, invoice type of spend, and there might be, you know, processes around that approval processes, workflows, to make sure that spend is approved and gets booked in the right way that we have budgets to support it, so on and so forth. And then the decentralized space is often a little bit trickier, right? Because the, the decision making is also decentralized. And so some categories that fallen in typically fall in the decentralized scope would be things like fuel, so if you have drivers that are that are moving goods, they need a fuel up on the road, right travel where you might have, you know, more white collar type of employees that are that are making decisions on what hotel to stay at, and what airline to fly and what restaurant to eat at. Right. And then subscriptions are specially in the software world we live in now there’s more and more functions of the business or are subscribing the software or different publications to be able to do their job. And this is really, for just speaking for Corpay, we play across both of those spaces. So in the decentralized space, it’s more we have we have card products and software that allows decentralized employees to submit their expenses for approval, capture receipts get booked in the right place on the GL. And then same on the centralized space, we have AP automation solutions that that make that a more efficient process and more more efficient and more effective and then can also add some controls and fraud prevention into the process to to help from that perspective also. So anyways, that’s that’s kind of the main framework we use. We want to just start the presentation with that. And then on the next page we wanted to just point out like hey, each each of these areas, payments is really critical to to you know, it’s really the lifeblood of, of how a business runs right without Without payments, both coming into your business and going out of your business, things wouldn’t operate. Right. And so this is kind of what we call the Jekyll and Hyde, if you will, of payments, where on one hand, they’re super strategic, right? For what, for what I just mentioned. It’s, it’s, we can’t we can’t operate without making payments and receiving payments. But on the other hand, they can be painful, right? It’s it’s administrative, it’s, it’s not really core to serving a customer or retaining an employee or growing revenue, right? It’s, it’s kind of just a, it’s got to be there kind of thing. So that’s the kind of dichotomy here and so. So we wanted to just point that out that, that, hey, it’s something like strategic and like necessary to get right. But we also know it can be painful, right? There’s all kinds of defects and errors and fraud is becoming more and more of a problem. And so, so yeah, so we, you know, as a treasury function, you got to try to manage those, those kind of competing realities of payments in your world.

 

Craig Jeffery  11:20

Yeah, thanks for that. I know, some people have problems with the viewing how much is zoomed in or zoomed out, if you still have issues, please type in the chat box, if you use the regular zoom adjustment feature, or ctrl minus or Ctrl plus, that will increase or decrease the size of what’s showing. Other than that, you know, logging back, logging out logging back in might resolve whatever anomalies happening? But yeah, thanks. Thanks so much, Danny. And then we shift over to managing payments with what Danny’s built on, will bring refresh the question to to discuss these different responsibilities that usually touch on multiple areas from funding to payment execution. So thank you for joining us for cash.

 

Rakesh Fifadra  12:07

Yeah, thanks, Craig. So um, so yeah, just as Danny mentioned about different types of expenses or purchases, right. We we also feel like it’s very crucial like to manage payments for like base healthy financial right for any any organization. So there’s effective communication and planning between the Treasury Department and also the AP department, it helps in making sure there are enough funds right available to pay vendors as well as suppliers. So when we when we talk about funding right, basically Treasury responsibilities to make sure they correctly forecast organization’s cash flow and make sure there’s enough liquidity right to cover all the payment obligations. And when we look at on the AP side right like they they basically define all the processing red around how an invoice is coming in, what are the approval workflows, how do they maintain how to maintain data integrity as well as all the documentation. So, when we talk about invoice right like basically making sure that invoice is received properly like make sure it matches in matches to the PIO as well as validate all the goods and services which are received and once that is done basically initiate the approval workflow. So basically route the invoice right to to the relevant department or individual based upon like predefined authorization levels as well as budgetary constraints. And it also helps in making sure that amount set within within invoices are aligning right with what the food budget was. So, make sure the expenditures they they remain within the allocated allocated limits. Like I feel it is also very important to maintain data integrity. So make sure all the vendor information right is correct that all the payment terms are correct, as well as all the invoice details are maintained properly in order to avoid any kind of errors or delays throughout throughout the payment process. And finally, when it comes to when it comes to execution, right, it’s basically making sure what are the payment methods like what are the different payment methods available, as well as eventually initiating the payment right so, so this is basically calibration right between treasury and AP department to make sure they have the right payment methods be to check ACH like a commercial card or even like the payables solution such as like a virtual card. And then based upon the payment terms and whatever has been negotiated with the vendors in basically initiating the payment and making sure all the data and everything gets reconciled accordingly. In order for the internal system, so I’m so in a nutshell right now between treasury and AP, I feel like they go hand in hand in making sure like all the funding or the processes or the aggregations of payments is like it’s like done in a right manner.

 

Craig Jeffery  15:21

All excellent. Thanks. Thanks Rakesh. And that brings us to our first poll question. This is a single choice poll question, gauging where people are today. So the our expense management process is highly automated, mostly automated, some heavy manual aspect to it, it’s mostly manual, or I am unsure. So go ahead and select one of those and submit it. And that will be a good way to put that in there. After you’ve completed that point, cure, attention over to the chat. Follow Corpay on LinkedIn. If you haven’t followed CTMfile LinkedIn, please go do that today. That’s a media site that we have. And then of course, you can follow strategic treasure. So those three, that would be awesome if you click and follow those on LinkedIn after you’ve submitted your poll response. Now, I will say before, as people continue to take the poll, before we share what that is, and I will ask, I will ask our panelists, Danny, and Rakesh to comment on any of the responses. But if if in the chat box, if you type the word, Corpay, or poll, but let’s say Corpay. And we get, let’s just see, let’s just say 125, Corpay or polls in there, we’ll send out the results of all the poll questions to the to the audience. So Corpay will work, and or Hannah, you want to type in H A N N A H, that would work as well. And you don’t get extra credit if you type two words compounded in there. So thank you. All right. And this is good, because Brian has to count all those up. All right. So I’m not sure who would like to comment first, but you we can clearly see mostly automated is the most common, it’s 43%. heavy manual aspects are mostly mean, is 27% with another 10%. And annoying. So I think this is this, this indicates quite a bit of room for solutions, like Corpay. But what are you seeing here? Is this is this reflective of the general market, or anything? Anything else that we’d like to say?

 

Danny Martucci  17:45

Yeah, I’ll jump in Craig. I mean, I think I think yeah, this, this would be generally what we see in the market, maybe even a little bit more advanced, I’d say that in the market. So so. So you kudos to the folks here for for really being ahead of the curve. But yeah, something like probably, we’d see like, half the market is probably using some some kind of solution in this space. Here, I’d say like, you know, maybe 60 or 70% of the attendees. And I think it’s, it’s helpful to think of it for kind of automation and the going back to kind of what we were saying about centralized versus decentralized, where, for employees or folks in the field and whatnot. I’m curious how many of how many of you all are thinking about it from that perspective, where, you know, say, hey, to capture receipts and, and approve expense reports and manage reimbursement that you were thinking about it from that aspect, versus the more centralized side of it, if booking things to the GL and coding effectively, and making sure that things are closed out to close the monthly bucks, those types of things. So we see, we see that, you know, there is there is still I think, more on the latter side a little bit more of a gap even. But, but anyways, yeah, this is this is generally I think, a little bit ahead of the curve.

 

Rakesh Fifadra  19:15

If I can I can also add a comment right now I feel that we look at different company sizes, or what because like, we see a lot more automation on the larger market or larger organizations versus like small, mid sized organizations. And that’s what we’re seeing now. There’s a growing trend with Verizon, smaller or mid size organizations are looking to automate right whole bunch of internal manual processes. Because if we like because most of the expense management right or accounts payable, they technically fall under the b2b category, right? And when we look on the consumer side, where we have our personal credit cards, like there’s so much innovation with regards to mobile capabilities, Omni channel experience, like everything being real time, I feel like all our admins All the, like everybody working with an AP tragedie. everybody’s expecting like a similar experience on the b2b side as well, where they want to make sure everything is more mobile more real time or omni channel so, so that travelers we see we’re seeing that there’s a lot more demand with regards to automation. And now like there are companies looking for like solutions, which can digitalize, like a whole bunch of processes.

 

Craig Jeffery  20:24

Well, yeah, thanks. Thanks Rakesh, and we’ll close the survey out and thank everybody for responding we have more polls coming up and Rakesh, you’re you’re back on the goals of expense management, how do you how should we think about or how do companies think about the goals they have and their objectives around expense management?

 

Rakesh Fifadra  20:51

When we may see talk about goals write down those are easily like objectives or targets which are set by organizations to effectively control monitor and optimize their spending right and their financial resources. So, this these goals are basically designed to ensure that whatever organizations are spending right that it aligns with their strategic priorities, their operational needs as well as internal financial constraints, right. So, the first one is definitely like scalable growth right, how can we grow but it also also managing expenses, so, I feel if expenses aligned with the growth ambitions and this can definitely be achieved. And as long as expense expenses are structured as well as their right tools in place, they can definitely help an organization grow while also maintaining or controlling any expenses are spending when we look at optimizing liquidity, right, or working capital, like like I will, this is a given right? If it’s a healthy doesn’t help the liquidity and working capital, it’s like good for any any business right? So, if an organization let’s say is using, like various b2b solutions, such as commercial cards or E payables, it be either for employee 20 or even for vendor payments, it can definitely help improve their working capital with regards to the billing terms the payment terms, the rebates which are offered by various financial institutions. They efficient payment process so if there’s a streamline payment process, it can basically benefit everyone involved, right, be it purchaser or vendor. So by embracing payment methods like such as let’s say virtual card, or even by centralizing payment functions, I feel organizations can like enhance our transparencies, they can reduce error, as well as they can expedite and make the entire payment process more more efficient. When we look at like strong relationship management, right, so I find this not only on the vendor or supplier side, but also internally with your employees. So if there’s a good expense management process, I feel it can help build, like good trust, right, and collaboration with your vendor as well as it can improve internal, like employee satisfaction, right? If there’s like a streamlined simple experiment and process where they don’t have to submit any kind of paperwork and they can do everything online. And like in very simple simple steps, comprehensive security and control right. So, again, I fill this in today’s day and age, this is like a non negotiable requirement right? It is it is a must. So if there are spent management platforms or expense management platforms such as the one like which we have right at corporate, it comes with a lot of built in, like security and controls. And not only around like pre authorization, but also post authorizations. So when I say pre authorization, the controls could be around making sure they’re right limits in place, making sure there are like different velocity controls such as how much an employee can spend on a daily weekly or monthly basis as well as like merchant control saying you can only use this card at a specific merchant location and then post authorization would be more around expense reports and like making sure they’re right receipts make sure all the expenses are coded properly and whatnot. And lastly, cost effective process so, so again, if we if we look at what are the current processes involved, and identify any kind of improvements like more from more manual to automated process, it can it can bring in a lot of cost saving opportunities and make make the entire expense management process more more cost effective.

 

Craig Jeffery  25:00

And so there’s there’s a lot on, there’s a lot on this slide a lot of a lot of good comments. And that’s this is this is really a touches on that comprehensive approach that that you’ve been hearing about the whole webinar. So thanks for covering that. And a lot of people are saying when it’s the next poll question, and we’ve got one right here for you, this is a multiple choice, you can select 1, 2, 3, or 4. If you don’t use any of them, we didn’t give you an option for that. So we’ll see how that goes. So which payment methods do you use for expense management, and making payments to any card, virtual card, a ghost card, and multicart or one card. So vCard stands for virtual card in this particular instance. So those are the four you can go ahead and select those. For those who were haven’t responded in the chat, either Corpay, poll, or Hannah, you can still do that. If you haven’t done that we needed. We need 30 more to see, I saw that Hannah typed in him. So that’s awesome. So we’ll see how that goes. And then on this one, we’ll look maybe when those things come in your cache, I don’t know if you want to start first standard convention up because Danny wants to go into the the next slide after that, if that works for the two of you. All right. So virtual cards, pretty good ghost cards, pretty limited. Any any thoughts on either these numbers or how people are thinking about the payment methods that they use for expense management?

 

Rakesh Fifadra  26:52

David allow for most, but this does align with our thinking as well. Because only when we think about expense management, right, for most part it is employ like tnd, or what Danny was calling the decentralized right expenses. And tianni perfectly fits into into that picture. So having an employee like who, who travels frequently have a card assigned to them so that all the all the spend can be captured within within one card and it can be properly expensing allocated. So the card would come depends how we define virtual cards because that can be like a single use virtual card or they can also be multi use virtual card. So scenarios where we see the card being used on a single purchase would be let’s say you have somebody coming for an interview or there’s a contractor who doesn’t, who’s not like full time employee, you can issue them like a digital virtual card and they can use it for for like one or two, two expenses. And ghost card is more more like a centralized card right where it is launched with with a TMC or like a travel management company or even with a vendor, and they can incur a recurring purchases on a ghost card, and all the spend can be centralized within one card so that they’re not allowed for a bunch of cards. And that can be that needs to be managed. So yeah.

 

Craig Jeffery  28:20

Okay. Danny, any, any, any additional comments about like, which ones of these are growing most rapidly? In the market? Generally?

 

Danny Martucci  28:32

Yeah, I mean, I agree with I agree with Rakesh that, that, hey, the T and E card is really the best practice here, especially, especially for decentralized expenses. You know, Craig, on your question, it really be the, the virtual card is probably growing the fastest. Right? This is where, you know, really, technology is kind of changing the game there were, you know, as recache mentioned, there’s the kind of typical use case of, oh, you know, let’s say, you know, Craig, your, your, your, you have to travel for a job interview or for a, you know, to visit a client. And you know, that that company could provide just a one time use card to book your flight, for example, would be a typical virtual card use case. And then also in the AP space, virtual card is growing quite quickly, as a way to pay vendors and typically have a faster way with with better data and less fraud risk than, than, say a paper check or an ACH. So that’s, that’s really the the primary growth area and, you know, admittedly, we’re, you know, as Corpay, we’re the number one MasterCard b2b issuer in the space and so we’re very card focused, but probably we to be comprehensive, we could have included check in and bank transfer and um, wires as other ways that that that are still predominant in the market. But But this, Hey, that 75% of you are using, using a teeny card is really, really I think, again leading edge and the best practice.

 

Craig Jeffery  30:19

Excellent. Thanks for the comments. And by way of notice that poll questions, we have enough responses in the chat box, so no need to type anymore. And that’s awesome. Thank you for paying attention. And then back back to you. Dan, about inefficient expense process. So here’s here’s a model of an expense. Sorry, inefficient expense process. I’d love to hear your comments.

 

Danny Martucci  30:51

Yeah, this, I mean, this is just kind of like making the potential inefficiency come alive. For you all, like, which, which, you know, is nothing new, I’m sure, especially if, you know, your treasury department has responsibility for AP, you know, you know, the right side here pretty well, or, or just as a, you know, a travel or an employee you get you get the the left side, but it’s just, we just wanted to paint a picture of just like, the inefficiency that that can be involved in this process. Did you see my request? Which requests like, you know, is it approved? You know, just like the back and forth that can be created here? Right? Did did you attach a receipt? Oh, the policy is, you know, anything under $50, you don’t have to attach a receipt, like you attach the wrong, like, all of that back and forth is, is can be super painful. And, and, you know, solutions like ours can can solve that. And then there’s the whole, like, you know, this, this little dialog is just really the kind of expense approval part, there’s the upstream aspects of this of, you know, am I approved to travel or not, you know, what is the policy? What, you know, where can I stay those types of things? And then all the downstream stuff also of all right, where does this get booked? Is it whose budget it is? And under does it get booked to this, you know, this conference, budget line item, or to general Travel and Expense, like, you all know, all the downstream aspects also of this. So it’s really, I think, you know, the best practice here is to have a solution that, that automates a lot of that allows you to set the right policies, and right controls, and then automates the approval process and the, the accounting process downstream.

 

Craig Jeffery  32:46

You know, Danny, you know, is, as I look at this slide, and heard you describe it, there’s like, death by a million touch points. And it’s, it’s like, if you’re ever in a text chat group, and all of a sudden, like, three people are bored, and they’re like, typing tons of stuff in there, like, almost renders you, your phone useless, because there’s just so many touch points, as opposed to let’s have a conversation on a particular topic. And, and this this inefficiency of back and forth, it’s just, you know, we always have to think about that and every process, certainly, certainly an expense expense management, but in really every financial processor, how can we more effectively communicate, streamline the process? Less touchpoints more automation? In that guy, just kind of continuing there. On the discussion, I’ll let you continue the dialogue on ineffective processes.

 

Danny Martucci  33:48

Yeah, yeah. So so on the previous page, we were talking about just the, the, you know, the, the impact on folks time, which is, you know, super critical to, to running an efficient business but, but there’s other impacts also, hey, you lose accurate visibility and you know, cash balances or payment, payment timing, which can impact your liquidity and cash flow for scheduling of CapEx like hey, for those big purchases, that are you know, that that may not be typically predictable on a monthly basis or whatnot. Like those can be chunky things that can that can cause problems, scheduling and communication. So, so, you know, again, understanding where where cash flows are going to, to hit on it from a timing perspective, and communicating effectively around those is is challenging, and then just managing your, your payables and your, your DPO can get thrown out of whack, right. You can have big, big variances there or or just not really have take effect. Take The use of of your supplier financing effectively, right by extending your, your DPO. And using that as a often a relatively cost efficient way to finance your operations. So, all of these these downstream impacts, like, beyond just just being a suck on folks time within the organization are, are super critical to solve.

 

Craig Jeffery  35:32

Yeah, just just double clicking into the poor scheduling of CapEx, that’s a, you know, it’s an interesting scenario, you know, the, the interplay, particularly there with, with Treasury, cash flow and liquidity planning, you know, the you, you budget capex spending in a certain period of time in the year it plugs into a month, there’s an expectation there, that shift forward or it shifts backwards, you know, two months or three or four months, sometimes that communication doesn’t exist very well. And from an accounting standpoint, it’s like, okay, we’re, we’re amortized in this, or depreciating this over 60 months or 72 months, whatever the asset happens to be. And so the amount per month from an expense standpoint, from an accounting expense standpoint isn’t very great. But if you’re acquiring very significant piece of software equipment, that moving two or three months has a very much outsized, impact on your liquidity moving up or down, impact on expenses is smaller, the shift can can create some havoc there. So while not necessarily tied into the effectiveness and effectiveness, that impact across the organization, certainly matter. So each of these areas, we we realized or have to realize that the this is a process that touches multiple areas, the impact is more broad than our own particular stovepipe or silo, depending what part of the country you’re from, there is a connection, there’s an end to end result. So lots of lots of consequences there to think about. Now, as we’ve, as Danny primarily laid out some of the inefficiencies and the problems, now we have to turn to a cache to how do we move from inefficient to, or ineffective to effective?

 

Rakesh Fifadra  37:30

Yeah, so like, if we look here, like basically, we have, like few use cases, or like few improvements around how, like we can eliminate right ineffective tasks and make make them more more effective. So the first one is basically delayed expense approval. So this basically happens when when they’re not like automated processes, or when there are a lot of manual processes and a lot of back and forth with regards to the who the approval is, what are the requirements with regards to submitting expenses or whatnot. So in order to make this effective red, it definitely helps if there are automated processes with regards to approvals, where as a cardholder, I can just submit an expense report and it automatically goes to my approver, who can review and quickly approve it. Or sometimes you can even even built in automated approvals. And like that say you can have some dollar limits saying any any transaction less than $10 doesn’t require approval or whatnot. Second is slow, or manual reimbursements. And in order to make this more, I would say faster reimbursement or definitely through automation. But it it also helps if this is built in within your expense management solution, where as a cardholder or an employee who’s submitting a reimbursement request, you already have that payment information within the application and once it is approved, you can automatically pay pay the employee right and there are also real time payment options now available in the market where where the employees get reimbursed instantly as soon as an expense reimbursement is approved. What we also see commonly is integration with ERP so having an expense management solution that integrates with your current ERP software. So as you get any any information right around reimbursement, it’s it can plug into your ERP or into your HRIS systems, where you have all the employee payment and bank information in order to basically send all the other reimbursements out so it can it can help and like removing all the slow manual processes. They gives you leverage, like such an automated processes with the expense management providers. The next like inefficient reporting rate and And definitely real time reporting helps to make it more more effective. As I was talking about, like all the innovations we’re seeing on the consumer space where like, even on the b2b side, there’s a lot of real time options now where you can get real time, transaction authorization declined information, you can see what is the total spending, what is the outstanding balance, and it can help make like decisions like it can help with all the internal approvals or making sure there’s good transparency and clarity around where the spend spenders been too many surfaces to attack and like in order to make it effective, like full visibility right of the payment process. So again, having having solutions where you can do complete end to end right like on the on the AP side, if you have a tool where you can do from procure to pay, as well as on the DND side where you can do your booking as well as approval as well as expense management and reimbursement. It definitely helps in making making those expense management processes more more effective. Then, if you have manual matching of expense and transaction, definitely just automated receipt to Transaction Matching. So what automated receipt to transaction is like there’s OCR or Optical Character Recognition or technology which is in the market where as soon as a receipt is uploaded or attached, the OCR can extract all the information from the receipt like transaction amount, merchant information, what is the transaction date, and once the transaction is loaded, or imported, it automatically matches based upon those parameters like it compares the transaction information versus the information from the receipt and automatically matches. So it removes the manual task of somebody attaching a receipt to a transaction when when they’re doing the expense management, then keeping track of receipts. So again, this can be very cumbersome, right? Like if I’m traveling as an employee, I’d have so many receipts, like from my breakfast, for my fuel for my lunch, dinner, as well as any kind of digital receipts as well. Like, if you’re taking over like or if your hotel receipts, it’s it helps to have a more digital solution where you can immediate capture a receipt and then forget about it, right I buy a coffee, I take a picture, and the receipt is stored on into my app. And then I don’t have to worry worry about the receipt. After that because the receipt is there in the app, it will automatically match to the transaction. And I can I can easily do my expense expense reports. And lastly, like the spending and lack of the lack of spending controls, then it it can cause problems and with regards to visibility with regards to reporting as well as there is increased risk of fraud as well. So if there’s spending amounts or controls built in, it definitely helps in making that process more more effective with regards to controls on the card, as well as on the expense side by categorizing all the expenses accordingly. So it can help with the accounting process and the reconciliation process as well as.

 

Craig Jeffery  43:27

Excellent. So that brings us Rakesh to our final poll question. And this is a multiple choice again. So you can see. You can select multiple options. So we look at payments and the payment process as a cost center, a profit center, an area ripe for fraud requiring improving security, a key component in our management of liquidity, just another finance area. Other and I am unsure. So I’d love to see what see what you think about that. Now if you can’t see the question, there’ll be some notes in the chat box that shows ways that may be appearing on another screen. Or if you have a screen off it can sometimes sit behind that. Yeah, hopefully that’ll work.

 

Danny Martucci  44:38

Maybe while we’re waiting on that I wanted to answer Benjamin’s question about he was asking about our virtual cards can how you can track individual cards for an airline flight and so there’s there’s two two main ways virtual cards are used in that space. So one is just there might be a company virtual card that’s in your travel portal. And all, all flights are booked on the same card effectively, I think that might be what Benjamin is referring to. The other way that that allows for better tracking and approvals and accounting on the back end is the way our solution works where every employee has, has a login to the software, and then upon request, they can be issued a virtual card that’s linked to their, to their kind of personal login. And then that card is used as a one time use card typically, and can be used to book that flight and then goes through the same expense report or approval process that any other expense would. So that’s that’s kind of our our recommendation and best practice there. For virtual card for for travel.

 

Craig Jeffery  45:54

Thanks for the answer, Danny. Thanks, Benjamin for the question as well. And I’m not sure which one wants to handle it, we have a pretty dominant view of of the payments and payment processes a cost center over profit center. Yeah, just any comments on on these, these responses or, or implications of how we look at payment payment areas, the payment process in particular?

 

Danny Martucci  46:25

Well, I’ll jump in. I mean, it’s Yeah, multiple of these things can be true, of course, as looks like many of you, you noted, where it’s certainly I think, just looking at the the comeback to the cost center versus profit center thing, but but on, hey, it’s a key component in management of liquidity, absolutely. And an area ripe for fraud, we’re definitely seeing that in the market. And so it’s really important to have a partner that can help manage that, and also even insure against that, in some ways. As far as a cost center versus profit center. I see most of you mentioned cost center where, you know, certainly there’s, there’s costs associated with with running payments and staffing that that function and whatnot. But what we’re seeing with some of our clients where they can really turn it into a profit center, how do they do that? Well, through typically through rebates associated with card payments, right, where, you know, say, with our virtual card solutions, for AP or for other card solutions, like T and D card, often that rebate can be so significant that, that it really covers the costs of the of that group and, and turns that group into a profit center. So that’s something really, really, you know, you all should think about, and we’re happy to help with on. Yeah, how do we how do we change that, that paradigm and the thinking around an AP or Treasury Department with the use of card products? Rakesh, any other comments?

 

Rakesh Fifadra  48:12

Well, I’d say Danny’s fine on the profit center. I think it can also help like, depending upon the payment type you’re using, if you’re using card or like virtual payments, it can also help with the working capital. So let’s say the invoice is due on 30 days and with your card, you have 30 days billing terms, you technically get 60 days right to repay to repay or pay that invoice so so it can definitely help in improving the working capital there. And also with regards to any kind of supplier negotiations or discounts or like if you’re making early payments, by by using like cards or E tables, it can definitely help in having some kind of a discount or negotiations because it is helping supplier reduce their DSO right? So so yeah, definitely, it’d be good to see that number increase where more and more people are looking at payments is also a profit center and not only cost centers.

 

Craig Jeffery  49:15

Excellent. Well done. Thanks, everybody, for responding to the poll questions. We always find it interesting. I know a lot of you do because we went way over our 125 people typing Corpay, poll, or Hannah. But how do you go about evaluating the solutions? And what are some of the key considerations? You know, a couple of questions here are laid out for your for your thought and evaluation. You know, one of the biggest challenges in any type of tech implementation and finances, getting things up and running. So what type of support what level of support is provided? When you’re onboarding when a when you’re being on boarded to a particular platform? This This is particularly important because one of the areas where companies have the biggest roadblock is the amount of time the and the level of capability of it or is they tend to be very, very jammed up. And that tends to be the biggest area that pushes off projects as if they’re the heavier their involvement, the harder it is to get projects through and onboard. So what type of support is offered to get things up and running? Second is when you evaluate solutions, if inefficiency comes from defects and defects generally come from either a poorly designed process, or manual processes, right manual processes, create a higher level of defects. It’s hard to get above three, it’s really hard to achieve three sigma, have limited errors in a manual process, that’s almost impossible. And you can get the five Sigma quality with automated processes if they’re designed, right. So really, how will this system relieve the organization manual tasks, since that’s one of the key drivers for inefficiencies. And so that’s everything from mouse clicks to handoffs, you know, that the level of complexity How does it reduce that conversation? Or as I talked about the text chats that that seemed to get out of control? How are those? How are those conversations reduced? How are the handoffs between functions and operations manage? And then the other aspect is, does the situation, there’s a situation that we have, will that scale and grow? Like will we increase our volumes? If that’s the case? How will your the solution you require, or by reducing that complexity, make things less complex? And instead of, you know, if you double? Do you have to double your staff, that obviously, when they were very efficient, if you can add 50%, you can handle with your same staff, oh, that sounds sounds extremely efficient, enabling you to scale, you don’t want to be the gating item for growth is, you know, cost center area, as people will think of it, but we’re not going to be the area that creates a delay. And then with all of the new payment types, and the focus on fraud and security against fraud, using new payment types that might be enriched with other information, new payment file formats that are necessary to support those. Will this help the communication with your trading partners, so that they don’t create a defect by calling back and say, What are you paying for it because we don’t know what you send this money for? We have a lot of, you know, we have a lot of things we’re paying for, we need to know and have that information because we have a system as to you, the payer, and the payee both have to have a communication, that’s the end to end view. And the other the other question is when you evaluate solutions as a support multiple payment types, does it address a range of need needs? Or is it just highly highly focused, and it’s fine to use highly highly focused systems, if your need is pretty intensive in that particular area. But again, as we think about the end to end of the process, the end to end to the needs that exist, thinking about these together, tends to be a on the path towards the most like the greatest likelihood of success. So just think about the partners, these are crucial elements as you evaluate solutions. And that has brought us almost to the end of our hour, but there are some key final thoughts and or cash, why don’t you start us off and Danny, if you’ll finish us on the final thoughts.

 

Rakesh Fifadra  54:06

Okay. So, as we as we look at this slide, I think it pretty much covers what we discussed today right throughout the session. So as we are thinking about expense management processes or as we are evaluating or looking for new software providers or working with your financial institution, then make sure that it is it is like a focused activity, like make sure you understand what the current processes are, where the gaps are, where do you need improvements, right, where are some of the issues and also make sure the right resources and the right decision makers who are involved throughout the process, so that the whole process can quickly be completed, right. If you don’t have the right parties or the right leadership involved, then it becomes very difficult to get any kind of approvals or to getting any things done differently from OD is one of the key topics right around expense management. So make sure any any solution or any processes, we are implementing that it is helping you reduce any kind of fraud exposure around employee misuse or any kind of data leaks, any kind of like, fraudulent transactions, right. And if if those happens, make sure there are enough safety controls built in, so that you can quickly remediate those issues with regards to blocking of the cards instantly or disputing of the transaction. As soon as you know, there’s there’s like a fraud or an employee employee misuse. Then lastly, like controlling, like controlling spending by budgets, again, I feel this goes without saying, right, make sure there’s proper planning involved into this process, and there’s proper budget allocated, so that there are no downstream issues. And what we often see is that at the beginning of the year, there are no issues because there’s no budget, right? So all the invoices get approved, like there’s there’s no issue, but towards the end of the year, with the year end, that’s when you start seeing questions from your accounting and finance department saying, How are we going to pay this, we don’t have enough budget, budget available. Then efficiency, again, all the automated processes we talked about, right? With manual processes, there are so many steps in all day, that needs to be so many follow ups, there could be so many issues. But if there are automated processes, then there are audits built in, there are controls built in and that everything is more quicker, and more more incinerate visibility of the cash flow. So this goes without like, again, with all the reporting or the real time reporting available. All the dashboards, it helps with having like good visibility around around cash flow. The next one the visibility to recipients. To me like when I think about recipients, I’m thinking about like a CFO or a senior leadership, right, making sure they have visibility into how your organization is performing or managing expenses. Because ultimately, those are the decision makers, right? So having some kind of a dashboard where they can see like a high level overview of what the total spend of the organization is how many cards are issued, right? Where are you spending most amount of money? Like, is there is that with a specific module? And if it is, it’s a specific module, and how can we make sure we get the right pricing or the right discount rate in order to continue having the business with the same merchant or supplier, and then able to scale? Gracefully. So as the organization grows, we want to make sure right, any kind of tools or processes we have, are able to help you scale right with regards to having mixing, making sure card holders are easily onboard and making sure you’re easily able to issue cards to your cardholder. Make sure there’s not enough training required in order for someone to use the tools which you are leveraging. So make sure you take into account like all these other things as you’re thinking about negative right solutions. I don’t know Derek, do you want to take the next tour?

 

Danny Martucci  58:14

Sure, sure. So yeah. And then and then on evaluation. So you know, credit talk through this. But really, some things we advise you to think through or implementation support, how you know, how automated truly will will the solution, make your processes? How comprehensive is the is the solution, right, we, we really advise a more comprehensive spend management approach across the decentralized and in the more centralized AP, which we offer. So that’s a really critical part. So you’re not managing multiple solutions. And then pricing and rebate. So as I mentioned before, you know, I think it’s good to really try to optimize rebate and you know, again, think about how you can turn your your department into a more of a profit center. And then finally being more future proof. So hey, where do we go from here? So we you know, we talked about hey, overfit half of you are already using some some kind of solution here. So that’s good, but but how do you think ahead for where things are going? So really to be, you know, have the right relationships, the right security and controls, be set up from a cost structure perspective and set up processes that are scalable, are all really critical. And then also, it’s finding the right partner solutions that are going to be ahead of the curve innovation wise, right thinking about where the markets going to incorporating new features and new new capabilities. And then just being really positioned to grow and evolve as as things change as we know they will So that’s that’s kind of our advice for, for where to go from here and really, really appreciated the chance to, to share our thoughts with you all today.

 

Craig Jeffery  1:00:09

Thanks, Danny and Rakesh. Thanks, everybody for listening and I’ll turn it back over to Brian. We had a couple more key things he wants to mention as we finish up.

 

Announcer  1:00:19

Thank you, Danny, Rakesh, and Craig and thank you, everyone for joining us today. The CTP credits, today’s webinar slides, and a recording of today’s webinar will be sent to you within five business days. And for more on optimizing accounts payable processes, be sure to register for our upcoming webinar with Corpay on September 26, titled Unlocking the Power of Automation and AP Processes by clicking the link in the chat box. Thank you and we hope you have a good rest of the day.