Choosing the Right Expense Management Software
Business spend through travel and expenses accounts for roughly 10% of revenue. While 10% may not sound like much off hand, it can mean hundreds of thousands of dollars or more for large corporations. Using expense management software, such as ExpenseAnywhere, can help better manage spend, prevent fraud, and increase productivity by reducing the labor required in manual processes.
What is Expense Management Software?
Expense management software is an application which simplifies the payment process for receipts and reimbursements through automated processes. Software allows companies to make travel plans easier to process, streamline approval and reimbursement processes.
In this article, we will discuss all the facets of how expense management software can improve your revenue performance. We will explore how to use expense management software to reduce fraud, streamline the reimbursement process, and increase productivity. Finally, we will discuss what to look for in a great expense management software solution.
What is the Expense Management Process?
The expense management process is how businesses manage expenses generated from employee spend or invoicing. Having an automated expense management solution helps businesses understand where revenue is being directed and if there are revenue leaks. Opportunities for revenue leakage can happen throughout the entire expense management process. Travel and expense management represents a large area of opportunity for many companies, particularly since these processes are predominantly manual or semi-automated. Having the appropriate accounting software can help increase the efficiency of expense tracking. Below are a few areas expense management software can help.
One of the first things that comes to mind when thinking about corporate expenses is expense reports. Common items found on expense reports can include things like office supplies, travel-related expenses, and personal equipment reimbursement. The question is, how do employees know what to include in their expense reports?
Many companies have what’s known as travel and expense policies (T&E policies). T&E policies lay out how and what businesses will reimburse for. Often, businesses will have different levels of approval depending on the role of the associate. A Manager, for instance, may need to submit a request for equipment; but a Director may not. Using a manual approach for submitting requests can take time and non-approved items can be overlooked. Multiple levels of approvals exacerbate the problem. Integrating policies in an automated solution checks for discrepancies in expense reports against expense policies. This allows for quick acquisition of requests and a streamlined reimbursement process.
Corporate cards are an important part of how businesses operate. There are several cards to keep in mind.
Corporate credit cards, or company credit cards for small businesses, are issued to the business entity or corporation. The business itself is liable for the charges of that card. These are common in large corporations. Often, corporate cards can be assigned to an associate and may not have spending limits.
Ghost cards are kin to corporate credit cards, but are department-specific. Often, these cards have no spending limit and anyone within the department can use them. Suppliers are often issued ghost cards for recurring expenses, like subscriptions.
Prepaid cards are cards that companies can issue with a predetermined spend amount loaded. There are vast benefits to using a prepaid card, which include better spend control and risk elimination that cash cannot offer.
Personal cards are employee-owned cards. Reimbursement for business charges happens after the purchase has been made and verified. Many companies have associates use their personal cards and later reimburse them to manage policy abuse.
Traditionally, card holders would need to keep physical receipts and then reconcile the receipts against the card statement. With automated expense reporting, users can use receipt scanning that’s built into the software along with card statement integration. The software then reads the charges and reconciles the receipts against the card statement. Some systems are smart enough to also pull charges that happened during business travel, making sure all reimbursable payments are captured on expense reports for employees. Companies then know if card charges are accurate and if there are any policy violations. An added benefit of using an automated solution is records can be kept indefinitely for tax or audits.
Besides the benefits of accuracy and quick reimbursement, automated solutions can track company spend. The ability to see spend data at a glance allows for easy fraud detection, something most manual processes are incapable of doing quickly.
One of the more recent innovations in the payment card market is the prepaid card. Real estate management professionals have recently taken prepaid cards from convenience to a necessity for how their businesses operate. Prepaid cards, such as those offered by PurchaseAnywhere, allow for better transparency and complete control into the how and where of spend. Automated tools, such as PurchaseAnywhere, allow card holders to automatically load cash from anywhere using mobile apps or from a computer. Users can also specify which bank account the cards are funded from. The risks that cash presents are eliminated with prepaid cards.
Accounts payable (AP) manages the short-term liabilities of a business, such as paying creditors or suppliers, while also supporting the accounting team. This department, without the help of automation, manually enters invoices, purchase orders, and other important information into Enterprise Resource Planning (ERP) systems.
An ERP software is software that helps connect import parts of the business together for planning, inventory control, sales, marketing, and much more. Having accurate company spending data entered into the system is crucial to making sure short-term liabilities are tracked and paid for. Depending on the amount of information the business needs to enter into their ERP, the AP department can become 10 or more people large just to enter data and submit payments. With automated accounting software, you can redistribute people to other facets of the business that contribute to growth and success.
Automated accounting software systems can receive invoices and enter the data with 100% accuracy into the business’ ERP. Further improving the ROI on the expense management software cost. Businesses can save about 70% of their invoice processing costs by implementing the proper expense software, such as InvoiceAnywhere.
Procure to Pay (P2P), as the name suggests, is the process that includes requisitioning goods or services to finally paying for those goods. Bogged down by manual processes, the steps within the P2P process can come to a halt. Using automated expense management software, such as InvoiceAnywhere, can completely manage the entire P2P process. Using such solutions allows for accurate purchase order (PO) and invoice validation against multiple data points to provide accurate payments. Data is also entered correctly into ERP systems every time. Some solutions are also intelligent enough to look for early payment discounts and can break payments up into milestones for easy invoice automation. All of these advances in automation reduce touches, which aids in increasing accuracy.
Nine Features to Look for in Expense Management Software
1. Robust Mobile App
Having a robust mobile app with an easy-to-use interface is important when employees are submitting expenses while traveling or away from their computers. Make sure the app has receipt scanning built in so all travel-related expenses are recorded properly. The mobile app should also allow for users to create an expense report on the go and track the approval of the expense report. A final feature we believe is important is that the app should allow users to see business spend. Managing expenses on the go should be as easy as opening an application and using expense data to make informed financial decisions on the go.
2. How well the Expense Management Software Integrates with your Expense Policies
You may have exceptions to every expense policy item, or you may have specific ways of managing expense policy violations. The software solution you choose should be able to manage those exceptions regardless of how complicated they may be. Employee reimbursements should also be baked into the system once it verifies all of the exceptions have been managed. If your software solution doesn’t include reimbursement management regardless of currency or location of the employee, you may need to look for a new solution.
3. Finance Team Support
Your finance department may need to perform regular audits depending on your business needs. Will the system enable your finance team to move through audits quickly? An automated expense management software solution helps standardize data and many systems, like ExpenseAnywhere, audit 100% of employee expense reports so you can be confident there aren’t policy violations. InvoiceAnywhere helps finance teams by ensuring invoice data entry is 100% correct and invoices are paid appropriately based on your company’s policy. These solutions drastically cut down on the time it takes to complete an audit and improve the efficiency of those audits.
From small businesses to global corporate entities, your expense management software should be able to grow with you. Whether you are using the software to manage T&E expenses for five employees or processing 1,000 invoices a month, your solution should be able to scale along side you. ExpenseAnywhere is a solution that scales to meet your needs. Regardless of if you have 1,000 invoices or 5,000 invoices to process, our expense management platform can scale to meet your needs.
5. Customer Support
For the best expense management experience, be sure customer support is also there when you need it. Customer support can help answer questions you might have when using the platform or even assist with your employees training. ExpenseAnywhere helps companies learn how to use our platform through guided product tours and support documents to ensure our system is well supported and users are at home with our expense management software.
Your expense management solution should not require weeks of training to use. Employees and managers alike should be able to manage expenses quickly and efficiently with minimal training. At ExpenseAnywhere, our solution prides itself on being as intuitive as possible. If an employee expense report submission contains errors, we highlight and provide suggestions on how to correct the report. The expense report shouldn’t weigh down your reimbursement management.
Reconciliation is an important part of your expense and travel management. Being able to reconcile card charges against receipts and invoices against purchase orders helps not only cut down on over payments, but fraud as well. Expense management tools can flag errors that a typical human approval would miss.
8. Substantial Support for Approval Workflows
Have a complicated approval workflow? Having expense management software can help improve the speed at which expense reports or invoices move through the system. Expense management software is designed to automatically notify approvers of requests and send frequent reminders. Remember the importance of having a mobile app? Be sure the management software you select allows for on-the-go approval of business expenses.
8. Substantial Support for Approval Workflows
Integrations are critical for businesses. Changing your corporate expense management software doesn’t mean changing your ERP. Solutions, like ExpenseAnywhere and InvoiceAnywhere, can integrate with a wide range of ERP vendors and often offer automatic synchronization.
Corporate spend management doesn’t need to be complicated. Today, there are cutting-edge tools that can completely automate menial tasks that slow businesses down. Reducing revenue leaks, risk, administrative tasks, and improving accuracy are all benefits that automation provides that manual processes can’t provide. Regarding automating corporate spend management, there are a few key integrations that are essential. Solutions that integrate with payment card statements and have the technology to keep automated systems running efficiently are crucial. ExpenseAnywhere is one such solution that integrates with OCR, AI, and ML to keep the management of business expenses out of human hands. This not only reduces the potential for errors, but also cuts down on administrative tasks and improves accuracy.
Headquartered in Pittsburgh, PA, USA with offices on three continents and clients all over the globe, ExpenseAnywhere is a world–class provider of exceptionally powerful, easy–to–use, web–based solutions for travel and expense management, supplier invoice processing, and p-card / prepaid card management.