Effectively managing your business expenses is essential for the growth and survival of your business. But the process is often long and tedious, especially when it involves paper bills. This is where expense management systems come in.
The basic function of an expense management system is to digitalise all of your paper bills, but it goes beyond just that.It speeds up your expense management process, keeps tabs on your employees’ habits, reduces manual errors, and distributes reimbursements faster.
In this article, we will cover what expense management software is and why you should use it. But before we get into expense management software, let’s take a closer look at what expense management is.
What is expense management?
It is basically tracking your employees’ spending and reimburse them for the bills that they have paid on behalf of the company. It also includes the spending policies that the employees need to follow. For example, the business can pay for the travel expenses of the employee for a client meeting, but the company will not pay for any shopping done by the employee. Expense management is important since it allows the employees to conduct business outside the office, and as mentioned before, it helps the business stay afloat and grow.
What is an expense management system?
It is a software that simplifies the employee expense reimbursement process by automating most of it. It reduces the need for paper, reduces the time spent handling expenses and minimises errors. The system automates the recording, tracking, approval, and payment of reimbursable expenses incurred by employees. It is also aligned with the company’s expense management policy to make sure that the business doesn’t overspend on approved (or unapproved) expenses.
An expense management system also has analytical tools that help the organisation make better financial decisions in the future and inform them about any necessary policy adjustments. The system also aids with maintaining compliance and accountability by accurately reporting on all expenses.
Having integrated expense management software also saves time since the accounting staff doesn’t have to manually enter the expense report data, which reduces the risk of errors. Once the cost has been approved, the employee is automatically paid back, resulting in a faster employee reimbursement process.
Features of an expense management system:
- Track all employee receipts
- Allows employees to use their smartphone to capture receipts
- Document spending limits and company policies
- Signals the business to make necessary changes to the policies if required
- Integrated with the corporate credit card
- Manage approvals
- Flags unnecessary spendings
- Check for policy violation
- Send receipts to the appropriate approver
- Schedule reimbursement checks for payments
Advantages of expense management software system:
- Simplifies approval: The software simplifies the expense approval process by using the custom workflow and automatically routing tasks to the right people.
- Make smarter decisions: These software incorporate built-in analytics tools that can quickly identify and record spending trends, detect potential problems, flag outliers, and suggest changes to spending policies.
- Improves compliance: The software helps companies adhere to their spending policies better by varying each expense against the established policy.
- It saves time: As mentioned before, it saves time by reducing manual labour. This speeds up the entire expense management process.
- Boost expense control: The expense management software makes it easier to track and manage each employee’s expenditures, giving managers better control over individual employee expenditures and spending limits.
In conclusion, implementing expense management software can transform how businesses handle spending, reimbursements, and policy compliance. By automating tedious tasks, it eliminates manual errors, saves time, and provides a transparent way to manage employee expenses efficiently. The software’s analytics further empower decision-makers to monitor spending patterns and make informed financial adjustments. An integrated, digital expense management system not only increases operational efficiency but also contributes to sustainable growth by allowing businesses to focus on their business goals. Embracing this technology is a step toward streamlined operations and better expense control, supporting the long-term success of the business.