Lexmark 201: Solutions Selling Horizontal: Travel & Expense

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1 Synopsis Traditionally accounting and finance departments have also been responsible for: Expense Report Processing P-Card Statement Processing Expense Report Processing Virtually every company has travel and expense report processing needs. Expenses can be incurred directly by the employee using their own personal credit or cash, or they can be incurred through use of a company issued credit card. In either case, the employee incurring the expense is required by their employer to prepare an expense report detailing out all of the expenses (by categorizing them; i.e., hotel, meals, car rental, taxi, airfare, etc.) and attaching all supporting receipts. The report and attached receipts are submitted for approval and then go to Accounting for processing. Most companies have an electronic means for entering, printing and submitting expense reports; however, some still use an Excel spreadsheet, Word document or paper form to prepare the expense report. It is common practice to have a set of expense guidelines that outline the limitations and what travel expenses are acceptable. For those companies handling expense reporting via a manual means, these guidelines can only be enforced via manual intervention. Depending on the volume of activity, this may mean that someone reviews and audits every expense report, but often only spot audits are done. This is a primary reason why many organizations will install an expense reporting solution like Concur or Necho that can capture, route for approval, and enforce the guidelines. In addition to the reconciliation and guideline auditing of expense reports, another challenge facing accounting departments is making sure that all receipts (as required by the IRS or other taxing authority for EMEA) are collected and attached to the expense report. P-Card Statement Processing To save on the invoice processing cost of smaller Non-PO purchases, many organizations have implemented a Purchasing or Procurement Card (also called P-Card) program for purchases under a certain amount. Usually this type of program is instituted for purchases under $1,000, but the dollar limit can vary wildly depending on the organization. Some have a limit of $500 while others may have a limit of $3,000. The P-Card is essentially the same as a corporate issued credit card with the exception that the P- Card will have a spending limit. More than one type of limit can be applied to these cards including daily limits, per transaction limits, and monthly limits. P-Cards are intended to be used for departmental expenses such as office supplies and general expenses. Every organization that has a P-Card program will have a policy that outlines the limitations and provisions around the use of the card. Employee fraud and improper usage can be a big issue with P-Cards requiring the organization to implement a rigid audit policy. Certain P-Card programs can enforce specific policies based on the charges. Each vendor who accepts credit cards has to set up a merchant card code with their bank. This merchant code tells you what kind of business the vendor has. These codes can be used within the organization s P-Card program to accept or reject specific charges. By limiting the merchant code the P-Cards can be used for, it allows the organization to be proactive in determining appropriate charges. Ghost card is a term you may hear when discussing P-Cards with customers. A ghost card is a card used for one specific vendor. There may not be an actual card associated with it, but just an account number to use which is where the term ghost card comes from. When one vendor is sourced as the only provider of a good or service, a ghost account number may be given to the vendor and that account number is charged regardless of the individual within the organization making the purchase.

2 For the most part, the processing of P-Card transactions is done in bulk (i.e., everything being charged to a general department expense account). The cardholder typically prints out their monthly P-Card statement, attaches receipts, and submits them for processing. One particular challenge for Accounting is with identifying specific transactions for 1099 reporting purposes, since some may be related to suppliers where 1099 s are required. From a tax compliance perspective, the organization needs to maintain good records of P-Card expenses related to 1099 reported suppliers/vendors. Another challenge for Accounting is making sure that all receipts (as required by the IRS or other taxing authority for EMEA) are collected and attached to the P-Card statement. Market Drivers Pain Points Travel & Expense and Procurement Card (P-Card) transactions (departmental purchasing) are continual processes affecting virtually every company Taxing authorities and internal controls require receipts for almost all expense processing reimbursement of employees and vendors Receipts are sent from widely distributed points to central AP for processing Both Travel & Expense submissions and P-Cards must be tightly reviewed and audited due to the potential for fraud Even organizations that have implemented expense systems (ex. Concur, Necho, SAP) for approval may use traditional mail and manual files for receipts, resulting in slow, poor receipt tracking Mailing of receipts adds significant cost and delay to the reimbursement process AP departments are looking for solutions to simplify and speed the reconciliation and auditing of expense reports Many companies have systems like ERP or accounting applications already in place, so they want complementary solutions that enhance,not replace existing investments. Faxing receipts can be cumbersome and time consuming, and often times, will still require delivery of hardcopy documents due to poor image quality. Inefficient processing of receipts may result in excessive late fees and damaged credit. Paper-based receipt storage results in higher storage cost and longer, more costly audits. Faxing receipts often times involves long distance telephone charges as well as monthly analog phone line charges.

3 Who to Call On Decision Makers Head of Finance Head of IT AP Manager Owner / CEO Influencers Branch location managers AP Supervisor Treasurer Users Employees submitting travel or expense receipts Managers of traveling employees Accounts Payable Company procurement card users Key Questions to Ask Benefits How are expense reimbursements processed today? (i.e. fax or scan) Do you know the approximate time involved when an expense is incurred to when it is paid? Do you know the approximate time to process expense reports once received at HQ? Approximately, how many expense reports are submitted per month? Do you know the cost of processing, including fax/transportation costs? Reduced costs by eliminating the mailing, copying and storing of paper documents. Intuitive etask prompts users for key index information and guides them through the proper scanning process Capture and process expense receipts regardless of source or location Minimize the potential for lost, misplaced, destroyed or orphaned receipts Make information captured from Lexmark MFPs available for ERP, financial applications and other technologies like Microsoft SharePoint Cut processing time with single-click access to all receipts

4 Example User Scenarios Nationwide Manufacturer Employees in offices/plants across the nation scan reports and receipts from Lexmark MFPs making the document image available for the company T&E system. Documents are immediately accessible, enabling process tracking and faster reimbursement. By eliminating mailing of documents, the company reduces shipping costs and eliminates backup paper copies. Branch or Storefront Location managers across the nation use P-Cards for local non-po purchases of office supplies and similar items under $500. By scanning the receipts to Accounts Payable using Lexmark MFPs, the company avoids late fees on the credit card. Education School employees can have a complete audit trail of expense receipt submissions from the time they scan at the Lexmark MFP, so they can focus on education rather than keeping up with lost documents. Healthcare Healthcare facilities already burdened by paper can immediately submit expenses without pushing more paper which could potentially be lost. Prompts from the etask ensure that fast-moving employees properly scan the documents.

5 Lexmark Solutions for Invoice Processing Potential Workflow Scan to Network Premium: Captures and routes to pre-determined location with prompts for new hire information saved as XML metadata. Expense Claim Submission / Capture 1. The employee selects Expense Claim on Lexmark MFP 2. The employee is prompted at the Lexmark etask interface to place the barcode coversheet from their expense system on the scanner then hit next. 3. The solution will scan the barcode (capturing the metadata contained within) and prompt for the user to scan receipts by placing them on the scanner glass 4. The user will be prompted with the option to scan multiple pages of receipts as required or to select Finished when all receipts are scanned. 5. The user will receive a confirmation on the screen that the scan was completed and transferred. Confirmation 1. The solution delivers confirmation to the employee instructing on how to store documentation locally 2. The solution sends an alert containing the information captured in the barcode, the employee name, and a date/time stamp to the appropriate Accounting / Finance processor confirming expense claim