The Rapid-Refund Expense Report
Far away from corporate headquarters, Collectech's marketers use an expeditious expense-refund system that pleases even the accountants
With rapid expansion stressing every joint in the company's operation, the last thing anyone at Collectech had time to worry about was paperwork. Bent on opening seven branch offices and topping $5 million in revenues in 1993, the collection agency, based in Calabasas, Calif., was dispatching marketers to new territories in Dallas, Denver, Atlanta, and elsewhere -- one every six weeks.
Employees who once shared tight quarters found themselves separated by two or three time zones and thousands of miles. In such a widely dispersed organization, even trivial administrative tasks became logistical nightmares.
Submitting an expense report, once a matter of filling out a byzantine form, attaching receipts to it, and walking it down the hall for an OK, became a protracted interstate drama for Collectech's far-flung field personnel.
"A report would travel around the country before I saw a check," laments Midwest regional manager Chris Murphy. After he had added up all the columns and rows -- "a real pain in the ass," he recalls -- he'd mail the handwritten form from his office in Chicago to Atlanta, where his supervisor, vice-president Phil Solomon, would review it. Solomon would then ship the report off to California, where the corporate accounting department would issue a check and mail it, at last, to Chicago, where Murphy would be sitting, anxiously watching his credit-card balances edge toward their limits.
"There was a lot of intercompany BS," says company president Marwan Kashou. "People overnighted their expense reports, then billed us in the next expense report for the $9.95 to express-mail the last report! I got pretty irate."
There had to be a way to expedite the 40-odd expense reports Collectech processed each month. The company was already wired. In addition to a local area network, it had previously installed Microsoft mail, an electronic-mail software package, and Collectech's marketers all toted company laptops and received sales reports and memos electronically. If a cash report or a calendar could be sent out via E-mail, why couldn't an expense report be sent in the same way? Most employees were well acquainted with the database and spreadsheet application. Murphy decided to tinker with a spreadsheet. A half hour and a phone call to accounting later, he had designed an expense form using Microsoft Excel.
Murphy's form, which is just a spreadsheet wearing a little makeup, handles all the computations automatically. He filed his first electronic expense report last fall. Word got out that Murphy's hard drive harbored a solution to the reimbursement roundabout. He E-mailed copies to comrades around the country, and it has since become standard operating procedure for field personnel to let electrons carry their expense reports home.
"E-mail is really another channel for the communication of data," explains Kashou. "We rely on it to deliver customer service, communicate sales data, conduct meetings, and even hold elections for employee of the year. Expense reports are just one category of data we ship across it," says Kashou, whose 50 employees now exchange some 30,000 E-mail messages a month.
By moving things electronically, Collectech has shaved two weeks off the reimbursement process. "The reports are legible, so they reduce error and take less time to check," says Jill Kramer, the accountant who cuts the checks. "We can turn one around in a week or less." What about snafus or lost reports? "We have fewer problems since people started filing them electronically."
"At the company I worked at before this one," recalls Murphy, "you'd want to kill yourself, waiting for those checks. It could take six to eight weeks. But here the company is not using the float on its employees," he says. "And that makes a difference to us."
Here's how Collectech deploys E-mail to reduce the tedium and the time lag involved in expense reporting:
A calendar E-mailed to all employees at the beginning of each month apprises them of deadlines for filing expense reports. "I filed this one at the last possible moment," says Murphy. "And I really needed the cash. But at least I didn't Fed-Ex it in." The program automatically date-stamped the report.
The vertical columns add up correctly, but what do they mean? Not a lot. "They're supposed to show the expenses incurred on a given day, but Murphy didn't fill in the names of the days," says his boss, Solomon. "It doesn't matter much because he didn't travel overnight this period."
"Just because there's less paperwork doesn't mean we're suddenly perfectionists about filling out forms," says Murphy. "To be honest, I hate to use the dates. They're on the receipts anyway, and when you think about it, who can be bothered with some of this stuff? It's still just a form."
The horizontal rows show subtotals for each category. Murphy spent $371.36 on miscellaneous items (marked C, E, G, and H) during this period, mostly on health premiums and a piece of computer hardware.
"I enter each expense in the appropriate category," explains Murphy. "The first receipt I pull out is for pens and paper, so I type in the amount -- $11.89 -- in the row titled Office Supplies. That's a no-brainer. Because it's the first item I record, it automatically gets marked A. I move the cursor to the A field under Descriptions and type in a few words to describe the expense." He repeats the process for each expenditure. "It takes about a minute."
As Solomon discusses this report, he revisits it on his computer screen. "I keep a copy in a 'folder' marked Murphy," he says. "Let me open it." Several seconds later he declares, "Oh, yeah, I've got it.
"The first things I scan Murphy's spreadsheet 'EXPO394.XLS' for are big-ticket items. There should be no surprises there. I knew about that trip to St. Louis. It was a one-day jaunt, so there should be no hotel bill. The health insurance is a recurring monthly expense. Nothing new there. The printer board we had discussed. Marwan, the company president, had authorized the purchase. So everything looks legitimate. I forward it, attached to an E-mail message, to Jill Kramer and authorize her to pay it. At the same time, Chris gets the message that I 'cc:' to him. He should be paid within the week."
"If I'm on the road, I can log in from my hotel room and review the reports and approve them right there," says vice-president Solomon, who, like all Collectech employees, is never far from his modem-equipped laptop. "I can do it from home at night or early in the morning. I don't have to be at my desk, plowing through a stack of paper. Our people get the message that we care about their personal cash flow and that we're committed to quick turnarounds in everything we do." Solomon forwarded this report only hours after Murphy sent it to him.
While the company can zip its reports around via electron, it can't dispense with paper records. "We still need receipts," says controller Gary Palatas. "The IRS, should it ever decide to audit, as well as the CPAs who sign off on our financial statements, require us to back up every expense with a receipt." So accounting won't mail the check until hard copy and receipts arrive at the California headquarters. No problem, Murphy says. "I carry around an envelope, and as I incur expenses, I slip the receipts into that envelope and then mail it off with a printout of the E-mailed report."