Tuesday, October 8, 2019

Stopping travel and expense 'leakage' before it becomes a big loss


AUTHOR
Robert Freedman@RobertFreedman

Employees typically submit $10,150 a year in reimbursements. Make sure your T&E policy provides tools for reining in unnecessary expenses.


If you haven't reviewed your travel and expense (T&E) policy recently, make doing so a priority because the cost of "leakage" to your company is likely greater than you think, T&E consultant Oren Geshuri said last week in a CFO.com webinar.

As much as 12% of a typical company's operational costs — about $10,150 per employee per year — are T&E related, and about 5% of that is lost to fraud, said Geshuri, director of technology and media services at the Lyndon Group.

It takes companies between 18 and 24 months to detect fraud, and by the time they do, the loss averages about $26,000.


Even separate from fraud, T&E leakage can be costly. About 6% of T&E annually, or about $60,000 for every $1 million in expenses, is out of compliance in some way, often because of duplicated out-of-pocket employee expenses. The typical duplicate reimbursement is about $50.

There are other risks if your T&E policy isn't well thought through: You can end up paying for costs your company doesn't want to pay for, like spousal travel, or losing money when employees keep airline or other travel credits they earn while working.

Review your policy


Geshuri recommends you review your policy once a year, for a number of reasons. One, it gives you a chance to learn what's working and what’s not​ from employees who travel a lot. Is it easy to understand? Is it easy to submit reimbursement requests? Do the policies make sense?

"Once a year, bring in some of your power users, your road warriors, and sit them down and have a conversation," Geshuri said. "How did we do this year? Where were your pain points?"

Geshuri also recommends you use a corporate card program, if you're not already. "There's a common misconception that giving corporate cards out actually loses control or replaces control, but it's quite the opposite," he said. "It’s very well known now that [it] actually helps you funnel spend."

Using a corporate card helps you integrate T&E data, validate costs, and exercise tighter controls, Geshuri said.

Policy essentials

When you sit down to rewrite your policy, make sure it covers the following:

  • Business travel. How far in advance do you want employees to make a reservation? Do you let them book first class if, for example, they need the leg room? If they get a credit, do they keep it or does it go back to the company? Should you pay for TSA pre-check? Have you set a policy on using Airbnb, Lyft, Uber and other app-based options?
  • Corporate cards. Spell out your rules of card use. For new employees, have a probation period during which they're subject to a lower limit.
  • Contingency planning. Think through what you want employees to do when emergencies or other unforeseen events arise while they're traveling for work. What should you require them to do if you alert them to an emergency they might not be aware of when they reach their destination?
  • Personal issues. How do you treat travel when an employee's spouse or partner accompanies them, or when they add personal travel to their work travel?

Administrative guidelines. Do you want receipts included for expenses under $75? That's the threshold set by the IRS. How soon after travel do you expect reimbursements to be submitted?


Reduce ambiguity

When revising your policy, make sure it includes or addresses these essential elements: a statement of purpose, company expectations and policy compliance, areas of ambiguity and key subject areas. These subject areas include travel, travel-related expenses, accommodations, and food and entertainment.

Also, make sure to check the language you're using. Geshuri recommends you keep the language simple, written at about a fifth-grade reading level, to reduce the risk employees don't understand it. "Don't let a lawyer write this," he said. "It should be a cross functional effort: HR, procurement" and other executives.

Be careful to use the same language in your policy that you use in your expense reporting system, Geshuri said. If your reporting system categorizes employee meals in 10 ways, use those same 10 categories in your policy.


"You can't manage your bottom line if you don't know where your money is going," he said. "Employee initiated spend you can’t see until after it's spent." That makes a strong T&E
policy the only way to govern this big part of your operating costs before you incur them.

Deepak Chopra: Your bad money habits could be hurting your health

Source: https://tinyurl.com/y6tvhzgg


 

Why financial wellness is important to your health, according to Deepak Chopra

If you’re worrying about money, you’re not alone. Finances are often cited as the No. 1 cause of stress.

Yet, that anxiety may be doing more than keeping you up at night. It is also likely affecting your overall well-being.

“If you’re stressed about your finances, of course that’s going to cause your blood pressure to go up and put you at risk for so many diseases,” said health and wellness guru Deepak Chopra, co-founder of The Chopra Center for Wellbeing and founder of The Chopra Foundation.

A number of illnesses — such as migraines, digestive problems and heart disease — have been associated with stress.

People who are financially secure spend money on experiences, not necessarily on products.

The good news is that there are things you can do — both with your finances and to get your stress under control, according to Chopra, a New York Times best-selling author whose books include “Perfect Health” and his latest, “Metahuman: Unleashing Your Infinite Potential.”
Live within your means

Americans owe more than $4 trillion in consumer debt as of July 2019, according to the Federal Reserve.

The use of credit cards is also rising among young adults — 52% of those in their 20s now have credit cards, compared to 41% in 2012, data from the New York Fed show.

However, to be financially well, you should live within your means, Chopra said.

Those who are financially secure “usually don’t spend money that they haven’t earned, to buy things that they don’t need, to impress people that they don’t like,” he said.




Save money

While every financial expert advises saving money, including for emergencies and retirement, it may be easier said than done.

In fact, 28% of Americans have no emergency savings, a July survey from personal financial website Bankrate.com found.

When it comes to retirement, 26% of non-retirees say they have nothing saved, according to the Fed.

However, saving is crucial to your financial health.

“I have also seen in my life that in cultures where people save 10% of their monthly salary and put it in reasonably low-risk investments, in the long term they do much better,” Chopra said.

Protect yourself

Financial security is more than just money in the bank or in investments. It also means protecting yourself with insurance in case you are disabled or get sick, Chopra said.

You may get health insurance through your employer or you can purchase it through the health-care exchanges made available through the Affordable Care Act.

Disability insurance is also important: One in 4 adults will become disabled at some point before they reach retirement age, according to the Social Security Administration. There are both short- and long-term plans, which may also be offered through your employer.

If you are buying any insurance on your own, be sure to do your homework and shop around for the best plans that work for you.

Spend on experiences

Being financially healthy doesn’t mean you can’t spend money.

However, Chopra suggests laying out cash on things like restaurants and vacations, rather than on physical objects.

“People who are financially secure spend money on experiences, not necessarily on products … particularly experiences that enhance your social well-being and physical well-being,” he said.

Meditate

The best way to address your stress is to meditate, according to Chopra.

It decreases blood pressure, hypertension and insomnia — as well as reduces the production of stress hormones, like adrenaline and cortisol, he notes.


Deepak Chopra leads a meditation in Telluride, Colorado.
Courtesy: Deepak Chopra

Chopra has also advised to stop multitasking. Instead, focus on one thing at a time.

If you find you are starting to go down the stress rabbit hole, then stop what you are doing, take a few deep breaths, observe the sensations in your body and smile, and then proceed with awareness and compassion, he wrote on The Chopra Center website.

Increase joy

By increasing your joy, you’ll be less likely to get caught up in any of the ups and downs of the stock market, Chopra said.

To do that, there are a few things in particular you should focus on: pay attention to people, show appreciation and tell others you care about them.

“That’s the fastest way to be happy — to make other people happy,” he said.

Wednesday, October 2, 2019

New report charts economic impact of Hispanic Americans


The total economic output of Latinos in the United States was $2.3 trillion in 2017, up from $2.1 trillion, according to a new report. Sol Trujillo of Latino Donor Collaborative joins Morning Joe to discuss.