Smartphone business challenges and trends.

December 14, 2015 Lynn Larson

Mobile/smartphones have come a long way in the business world since the early days when they primarily served as mini email devices. Expanded functionality and usage mean new opportunities for efficiencies, but also new challenges. Mary Schaeffer of AP Now writes about one headache below, while I explore some mobile trends. With increased awareness, your organization can determine what, if any, steps it should take to harness the benefits of smartphones while guarding against the risks.

Smartphones, Receipts and a New Expense Report Auditing Headache

by Mary S. Schaeffer, AP Now

Most employees have smartphones, taking them wherever they go. The phones are especially handy for travelers, who can snap pictures of their meal receipts for their expense reports. It’s a lot easier and cleaner than keeping all those little pieces of paper together. However, all is not rosy in receipt land.

The New Issue

Some employees are submitting the same electronic receipt for the same meal on multiple expense reports. Whether this is being done inadvertently or the employee is actively trying to defraud the employer of a few dollars is a separate issue and one that is difficult to pinpoint definitively. However, from an expense report audit standpoint, it is critical that these duplicate submissions be weeded out and not paid a second time.

Smartphones can play a role in reducing office paperwork, but organizations also need to implement related controls and policies.

The Solution

Insist on employees using a company credit card to prevent them from playing certain games with their expense reports. For those who don’t go this route, using automated expense reporting software will address the problem. When combined with a company card, the information can be automatically loaded into the expense report. Then the employee doesn’t have the opportunity to submit the expense twice.

Organizations who do not use automated software have two primary lines of defense for uncovering duplicates:

The traveling employee’s manager who approves the expense report. Although it is incumbent on them to check everything first, it is a well-known fact that only a few actually check the expense report before approving it. Making managers responsible for what they sign is a good first step.
The group who audits expense reports. For starters, anything that is submitted more than a month or two after the meal should be double checked to ensure it wasn’t included on a prior report. Best-practice companies use data analytics to identify potential duplicate payments of all types, not just those on expense reports.

Concluding Thoughts

Technology is wonderful. It certainly makes many tasks in the business world a lot easier. Expense reporting is no exception. The sneaky thing about technology is that it also introduces problems we didn’t have in the past. This is one such example. By identifying the problem early on, you can create solutions to make sure extra dollars don’t drift out the door on your watch.

2015 Smartphone Studies and News

by Lynn Larson, CPCP

We know mobile payments have entered the Commercial Card world (e.g., American Express and Apple Pay), but this year’s mobile news is even broader. Following are tidbits on four other topics.

Business Travel

Intriguing 2015 research by Business Travel News (BTN) reveals business travelers have embraced mobile technology, but organizations are slow to respond in terms of mobile policies and understanding what travelers use and want. For example, mobile policies, when they exist, tend to be created in reaction to a certain situation, problem, etc. They often fail to address many aspects of mobile usage, including expense filing, roaming charges and social itinerary sharing. If you are a travel manager, this research is a must-read.

BYOD

Mobile policies are not limited to travel management. They should include a stance on BYOD (bring your own device); specifically, whether employees should use their personal devices for work functions. The debate becomes more heated if the work entails accessing sensitive data or financial records. A 2015 study by CompTIA, Building Digital Organizations, found that 53% of respondents’ organizations allowed no BYOD, compared to 34% in 2013. Security could be one factor. For various considerations, see ComputerWorld’s article on other findings from the study.

Data Breaches

With ongoing news about data breaches, it is natural to wonder if there is a mobile path. Per the Verizon 2015 Data Breach Investigations Report, mobile devices are not a preferred vector in data breaches. However, the report also notes mobile devices have clearly demonstrated their ability to be vulnerable. Download the report to learn more about data breaches overall.

Regulatory Involvement

The U.S. Congress is taking an interest. Earlier this month, the House Energy & Commerce Committee held a hearing to explore mobile payments security and data privacy. Industry experts described security features (e.g., tokenization and biometrics), as well as challenges like having multiple parties involved in the payments process. A key question is whether specific regulatory oversight is needed, such as laws covering mobile payments fraud protection. An article by BankInfoSecurity provides more insight into the hearing.

Final Thoughts

Mobile usage for business purposes will continue to evolve. How can your organization take greater advantage of the benefits? If/when you do so, be thoughtful about your policies to ensure they keep pace.

About the Authors

Mary S. Schaeffer, a nationally-recognized accounts payable consultant, is the creator of the AP Now website. She speaks regularly at live and online events; has written 18 business books, most focused on accounts payable issues; and has created many CPE courses for CPAs. Additional information can be found at www.ap-now.com.

Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…

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Six myths about tax compliance.

December 1, 2015 Lynn Larson

Hindsight can be 20/20 regarding Purchasing Card programs and tax compliance. Many organizations overlook tax or unknowingly place their trust in myths. Either way, a big crash at the end of a tax audit is likely. Tax veteran Greg Anderson, Application Design Resource LLP, wants to spare organizations such pain, so he shared common myths with me, based on his 20+ years of experience in this field.

Myths

Our P-Card program is too small to worry about.
The card program should never be swept aside. Even when a program starts small, it usually grows, becoming a bigger headache when tax audits end with poor results, such as assessments and penalties.

The tax department handles this.
This is often said by procurement or accounts payable (depending on who manages the card program), but nothing could be further from the truth if the tax department was never consulted. Unfortunately, most of the time, the card program management team does not have any relationship with the tax folks and tax compliance slips through the cracks.

Our bank/issuer sends us tax reports.
There is a kernel of truth here, but... Issuers typically provide reporting related to Level II data, but such reports are not relevant to tax auditors since the data represents tax paid versus tax that should have been paid.

The remaining three myths stem from management hopefulness or lack of awareness about actual purchasing activity by cardholders:

Merchants pass a tax amount on all of our transactions.
We only buy from local merchants.
Our cardholders only buy items for which merchants collect tax.

An organization’s situation is seldom this rosy, so just assume none of these things apply.

Organizations often accelerate P-Card usage without considering tax compliance, but the issue will catch up with a program.

Taking Action

Having an effective tax strategy begins with communication. Ensure you have clear answers to:

Who is responsible for our P-Card tax compliance?
What is our tax strategy for the P-Card program
What have tax audits revealed?
How can we improve?

See a previous blog post that summarizes key tax points and includes links to additional tax content. If you are seeking a more automated solution to tax management, Recharged Education can provide guidance; please submit a contact form.

“You can’t help but... with 20/20 hindsight, go back and say, ‘Look, had we done something different, we probably wouldn’t be facing what we are facing today.’”

— Norman Schwarzkopf

About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…

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What I learned from Shark Tank’s Barbara Corcoran.

November 18, 2015 Lynn Larson

Recently, I eagerly anticipated hearing Barbara Corcoran speak at a conference. I was not disappointed. I learned things from both her prepared message and responses to audience questions. What I did not expect, though, was the power of a woman who spoke from the stage for just a few minutes prior to Barbara emerging. Both women inspired me, even though, on the surface, they were complete opposites.

The “Other Speaker”

The woman who appeared before Barbara was originally from Sudan. She lives in the United States now and had been a recipient of a Habitat for Humanity home. The conference organizer wanted her to share a bit about her experience. She didn’t speak for a moment, as she appeared to take in the massive surroundings and gather her strength. Then she shared that, in Sudan, a woman was not allowed to stand and speak in front of a crowd. She was clearly moved, as were all of us in the audience. She also described how, to be eligible for a Habitat home, she had to increase her income first. She continues to improve herself and her situation, including taking English classes. Determination, resilience, achievement. She represented all of these traits.

Barbara Corcoran

Barbara was born and raised in New Jersey. Her credentials, also noted on her website, include “straight Ds in high school and college, and 20 jobs by the time she turned 23.” She overcame challenges to become the success she is today, but challenges do not end just because someone is successful. She observed the power of the insult as a motivator and encouraged the audience to be great at failure. Great salespeople do not stay down long was part of her message. Indeed, we are all salespeople in some respect. Her advice also included asking good questions (I wonder if she agrees with the value of asking why). I thought she was refreshingly candid and down to earth. Determination, resilience, achievement. She represented all of these traits.

Conclusions

These women are not so opposite after all. Setting goals, facing obstacles, finding a way to succeed. It does not matter that their goals are/were different. I was reminded of the importance of speaking up, which is quite different than simply being loud, and learning from missteps along the way. Their respective stories represent two extremes and most of us are somewhere in between, but they made me consider what is possible. Everyone has an opportunity to be better, regardless of their past. I felt renewed, professionally and personally.