For most start-ups and scale-ups, revenue growth is the fuel needed to acquire more customers and increase the speed at which they can solve their problems.
However, a healthy business seeking investment and sustainable growth will also be able to control its expenditure and optimise its outgoings.
Often a very laborious project, financial controlling can be made easier, faster and more precise with the help of end-to-end expense management software.
What is expense management software?
Expense management software is a system for businesses to handle, report and analyse a company’s spending. Combined with corporate credit cards backed up with software, companies use it to manage employee spending, employee reimbursements, invoicing, subscription management and integrations into accounting software.
What are the features of expense management software
Features of expense management software may vary by vendor. When shopping for an expense management platform, these are the features to look out for:
Unlimited credit cards
Being able to issue unlimited cards (physical or digital) instantaneously means every relevant team member can access company funds to pay for any product or service on behalf of the company.
Once you have the freedom of company credit cards, you can get creative about how you organise cost centres. Individuals can get cards for their personal spending, however, you can also set up cards to pay for team allowances and project budgets.
Budgeting
When cards are backed by software, businesses can flexibly set up budgets on those cards, allowing employees to spend their allowances with total visibility from both the finance team and the card owner.
Spending rules
Besides budgeting, line managers and finance teams can also set rules to prevent spending from happening in certain situations. Cards can be set up for certain days of the week, times of the day, merchants, points of sale and more.
This introduces a layer of financial control you don’t get with traditional employee reimbursement methods.
For example, you might limit the card of the marketing team to online payments only, since it’s only to be used for online advertising campaigns.
OCR technology
Optical character recognition (OCR) is a form of computer vision. Using a device’s camera, expense management software can read and understand invoices and receipts for faster processing.
This can make a world of difference in reducing manual data entry, offering employees a much better experience – and with it, a much higher compliance rate of business expense procedures.
Keeping track of receipts is painful for employees, who have a lot in their heads with their day-to-day jobs. Instead, armed with OCR technology, they can simply snap receipts as they purchase, letting the software read and enter the data in the system.
Subscription management software
Online subscriptions are a growing cost for companies of all sizes, who are increasingly licencing software and services from technology companies to solve specific problems.
Because online subscriptions are purchased and maintained by every team in the organisation, with renewal dates across the year, it can be hard to keep control of the spending.
Sometimes, a team might no longer require a subscription, but forget to cancel. And in larger organisations, two separate teams might be licencing the same software, unaware they could combine the licences and save money.
Expense management software offers specific subscription management that monitors renewal dates, duplicates and unused seats, cutting costs and increasing efficiencies for the business.
Cashback
A very convenient feature of company credit cards backed with expense management software is cashback.
With cashback, the system can literally pay for itself. When shopping for expense management software, find out how much cashback is on offer, and what would it mean for you as a company.
Seamless integrations
Finally, you need all this data and insight to be pushed correctly into your organisation’s ERP. With custom integrations, manual labour can be drastically reduced, leading to faster month-end close for the finance team.
Benefits of expense management software
Features are great – but what are the benefits?
Greater governance and control.
Expense management software tracks each owner of a corporate credit card: whether an individual, a team or a project. Then, it traces every transaction, giving businesses full visibility.
Besides visibility, the finance team is now getting active control. With expense management software, finance leaders can set spending thresholds and limits. For example, the HR team receives a visa with an allowance in line with their approved annual budget for staff entertainment and welfare. This way, we avoid overspending and trouble down the line.
In addition to limits, cards have associated expense policies and rules to keep them in check. These rules prevent the usage of these cards in the wrong context. For example, rules can prevent weekend usage for the product team, whilst allowing it for the new business team.
This is great for employees too. Expense policies can be a source of stress and anxiety, as employees are unsure of what can be claimed or not and what the budget allows.
With expense management software, businesses define their own sign-off sequences and do so for every project separately. With this feature, employees can also request funds through the platform, if for example, an unplanned situation arises which requires unbudgeted funds.
More readily information improves forecasting
One of the positive consequences of greater control and governance is an increased ability to plan and forecast.
Companies require real-time information if they are to remain agile and able to make critical business decisions. But traditional ways of working, such as employee reimbursements make that challenging.
For once, employee expenses come days, weeks or months after the fact. Finance teams regularly struggle, or give up on, getting employees to submit their expenses on time.
In addition, finance teams can lack visibility of the teams’ budgets, and therefore be blindsided about, say, a new piece of enterprise software.
Without this control, budgeting and forecasting carry much error and can leave the business exposed, if followed by a change in fortunes.
Empowering employees
And, what about employees?
With expense management software, every team can get their assigned budget, enabling them to spend it without waiting for sign-off.
With company credit cards issued per individual or team, they can pay for their online subscriptions, bills and even staff entertainment, with reassuring exposure to what they’re spending, and what they have left.
More importantly, this means they no longer have to front their own money, which stresses your most vulnerable employees.
And finally – it relinquishes your talented workforce from time-consuming admin.
If you want your employees to win new business, deliver to their clients and customers and improve the efficiency of the organisation, expense management software sends the right message to your employees: you care about their experience.
Consequently, employees feel more satisfied, less stressed and more focused on their high-value tasks – not their admin.
