Last November, Treasury Operations announced a variety of changes to achieve annual run rate savings of $750,000 while gathering more data to analyze and leverage with our vendor partners. As part of those changes, the company insourced accounts payable processing, implemented a new expense reimbursement system (PeopleSoft), updated the Business Expense Reimbursement (BER) policy; and mandated the usage of the US Bank corporate credit card. We are pleased to provide an update on these initiatives as well as share what we have learned from employee feedback to help make our processes more efficient.
Initiative Update:
On the whole, we are very pleased with the current projected annual savings of $590,000. Below is an update on each of these initiatives
- We have fully insourced the Accounts Payable (AP) function, generating $200,000 of run rate savings.
- We are also impressed with the adoption of the US Bank corporate credit card. As of October 30, the T&E spend on corporate credit cards has increased from 24% in 2015 to over 80% in 2016, well on our way to 85% target usage. Using the corporate card will generate $92,000 of savings (vs. target of $100,000) in 2016. The slight shortfall is due more to the lower T&E spend/volume vs. card adoption. This compares to a $115 rebate last year. In addition, by mandating the use of the corporate credit card, we are obtaining valuable vendor spend data that we expect to leverage in 2017 and beyond.
- We are a bit disappointed on the rebate generated by paying vendors through US Bank. Although the new systems feeds are working well, our projected e-payable volume of $2.6 million (generating $39,000 of rebates) is well short of the expected $11 million of volume (generating $165,000 of rebate). There are several reasons for the lower-than-expected volume and we continue to work with US Bank to increase this e-purchasing advantage.
- Our expense reimbursement policy changes, most notably affecting telecommunication reimbursements (i.e. cell phones), will result in $180,000 of savings vs. a $320,000 projection.
Process Improvements – Actions and Opportunities:
Based on employee feedback during 2016, we have made the following changes to our BER processes:
- For instances where My Wallet (the PeopleSoft functionality to upload credit card data) may not reflect the correct expense category, changes have been made to allow the user to change the category (via dropdown options) directly in the expense report. Common occurrences have been where a parking charge may show up as “gasoline” or meals always being coded as “dinner”. We have also made some changes to ensure certain merchant categories are classified correctly in the first place and will continue to monitor this process going forward.
- There have been other instances where My Wallet has not been updated or has been updated twice with the same charge. This resulted from inaccurate employee profiles or “merchant class codes”. We have corrected these coding issues and will be monitoring daily for such coding errors in the future.
We have revised our BER policy to make it clear that receipts are not required for meals and transportation (which includes parking, tolls, taxi, shuttle, tips, and other car service costs) below $25.00, unless required by the employee’s manager. Receipts are required for all other reimbursed expense categories, regardless of amount, as mandated by the IRS. We remind employees that the IRS also requires a listing of attendees (and their respective company) for all meals and entertainment, regardless of the amount, as well as a short description noting the business purpose of the expense. Common descriptions could be as simple as “Discussed new business opportunities with ABC Agency”, “Employee recognition lunch for XYZ project milestone”, or “Discussed XYZ Company renewal business.” Our AP staff is being instructed to make sure we adhere to these requirements to avoid a loss of tax deductions. We appreciate your cooperation.
From a service perspective, for those employees who may be having difficulty with either reconciling their US Bank credit card statement or in using the PeopleSoft T&E module , we encourage staff to contact our AP staff to research and promptly resolve such issues. We also appreciate employee feedback or potential service or functionality enhancements in the future. Below are examples where we encourage staff to call our AP staff:
- Same expense item showing up in My Wallet more than once (this should never happen so we would greatly appreciate examples as they happen).
- While statistics indicate that 98% of expense items are fed to My Wallet within 3 calendar days from the date of the charge, there may be untimely items that need research.
- Hard copy US Bank statements delivered later than expected (statement should be received no later than 15 days after the billing cutoff date).
- Instances where expenses are being categorized incorrectly in my wallet where a different categorization should be obvious (please note that meals will always be categorized as Dinner as this is the most used meal category).
Overall, we are very pleased with the results for our Treasury Operations initiatives. We appreciate employee support and patience during this year of transition. A NewsFlash summarizing this update will be published shortly. We encourage staff to contact the AP team with any questions or concerns. AP Team: Lee Havemeier (x0198), Melissa Wilbur (x3411), and Doug VonBank (x0214). Other Finance contacts include John Treacy (x6033) or Dave Bearl (x0181).
