Expense Management Software, also called expense reporting software or simply cost management software, is computer program that aids businesses in managing their overhead and labor costs. It helps businesses manage their revenues and expenses by grouping, tagging, and organizing them into reports that are easy to understand and use. This reduces the time spent on administrative tasks such as tracking expenses, analyzing figures, and reviewing tax records. Instead, a company can focus on running the business and minimizing its risk factors. Expense management software has made business operations more efficient.
Companies today, save a lot on overhead expenses such as salaries, room service, transportation, supplies, and other office-related expenses. This money is then placed in a bank account for the purpose of making interest and other profit. If a company makes these funds available for use, there would be a large pile of unused funds that would accumulate and eventually lead to financial losses. The best way to minimize the effects of an over accumulation of funds is by monitoring and comparing real-time expenses that are incurred by employees against total revenues earned and expenditures made. Real-time expenses, in this sense, are those that occur during the actual working hours. Expense management software with its feature of tracking real-time expenses automatically recognizes these expenses and compiles them into reports that are ready to view by employees.
Real-time expense reports are prepared and analyzed by the computer program in a matter of minutes without human intervention. This makes it possible for the manager to prioritize work, assign tasks according to the priority level, and perform his duties even while on vacation, on sick leave, or when other employees are handling day-to-day tasks. Because using expense policy can be a time-consuming task, most business owners prefer using expense management software to prepare and submit expense reports.
Expense reporting is a powerful tool for boosting profitability and reducing business costs. Using an expense management software program, a company will have an easier time understanding its physical receipts and comparing them with the corresponding records maintained in its accounting system. Expense reporting can also improve financial productivity. By allowing all employees to view and review their personal expenses, they will be able to take corrective action to adjust their spending habits and increase their personal productivity. In effect, each employee will be using his computer to access company information and make necessary changes to its management.
Another major advantage of using expense management software is the expedited processing of submissions and approvals. Since it uses log files, managers do not need to go through the tedious process of manually submitting expenses to insurance companies. For companies with a large number of locations, submitting the receipts online is much faster than mailing them. Managers can also approve or reject any expense claim as soon as they receive it. For businesses operating in multiple locations, expedited approval procedures ensure that all expense claims are approved and that no one has submitted the claim before the date set by the software.
Expense management software can also help provide accurate reimbursement estimates. The programs integrate all the important parts of an Expense Report, including the identification of the item being reimbursed, identification of the service or product being reimbursed, the amount of payment received, the date of reimbursement and the type of reimbursement. Through integrating all these details into an Expense Report, the manager can estimate accurately the percentage of his total compensation that is profit. He can also determine how much of his business expenditures should be made to cover stock-based and overhead expenses, and how much should be made in the form of fees and labor.