Automating expense reports - system for reporting travel and entertainment expense at Merrill Lynch

Internal Auditor, August, 1998 by Michael Castellano

TRAVEL MANAGEMENT A relational database of data specific to individual vendors is available for travel managers to use throughout contract negotiations. It also enables data compilation and review to ensure that vendors are complying with existing contracts.

FINANCIAL MANAGERS The software contains report writing tools that make it easier for managers to create and produce a wide range of customized reports. Financial managers can now focus on compliance issues - employees complying with corporate policy and vendors complying with contracted rates - to improve cost controls.

INTERNAL AUDITORS AND TAX EXPERTS Time-consuming searches through reams of paper archives have become virtually obsolete. These groups now have easy access via a graphical user interface to a multitude of employee and vendor data. Also, an array of flexible and reusable reports can be set up in a matter of hours.

One of the primary benefits of reengineering T&E management included the implementation of a corporate credit card program. The response has been positive, as both employees and management have witnessed more timely reimbursements and a reduction in bureaucracy and redundant processes.

Merrill Lynch issued corporate cards to 400 frequent travelers in 1997, and that figure will easily reach 2,000 by the third quarter of 1998. The advantages of putting that volume on a corporate credit card instead of individual credit cards include cost savings via exchange fee rebates, more reliable expense tracking, and limited liability risk.

NEXT STEPS

During the next two years we plan to continue to roll out the system around the globe to more than 26,000 employees. The company is gearing up to implement Captura's intranet version of the Employee Payables software for even tighter auditing control and greater end-user convenience in reporting and tracking expenses.

Merrill Lynch is also studying the feasibility of implementing an electronic booking and ticketing system, which will allow employees to make airline and hotel reservations on-line with or without the use of a travel agent. Not only will Merrill Lynch save on booking costs, but electronic ticketing will also simplify inventory problems with unused tickets. For example, no ticket will need to be returned if it goes unused; instead the cost is simply credited to the traveler's corporate credit card.

For Merrill Lynch, automating T&E reporting is an integral part of a larger vision to use financial systems technology to control costs, as well as provide more information to employees and managers. These tighter controls allow for more cost-effective, reliable auditing processes throughout the firm. By implementing the Employee Payables program now, Merrill Lynch is putting in place one of the building blocks to support its financial systems technology strategy, and we are creating a long-term foundation for the future.

MICHAEL CASTELLANO is Senior Vice President and Controller, Merrill Lynch & Co., Inc., in New York City.