Reporting, tracking, managing and paying expense reports for your employees is often a manual, time-consuming process.
The good news? It doesn’t have to be. Expense management tools help businesses streamline an otherwise time-consuming process, benefiting employees and your bottom line.
However, knowing what to look for in expense management software can be difficult.
The global travel and expense management software market is expected to reach over $2.3 billion by 2023, according to a study by ReportLinker. Many small, medium and large businesses across the world already use software solutions to streamline their expense management process, and adoption will continue to grow in the coming years.
In this article, you’ll learn the key benefits of expense reporting software, the features of expense management software you should look for, and why it’s important for your business.
What is expense management software?
Expense management can get complicated for companies with a lot of employees or frequent employee-paid expenses, such as travel, meals and office supplies. As a result, businesses turn to expense management software to make it easier to track employee spending and reimburse approved expenses.
Businesses of all sizes have moved to cloud-based expense reporting solutions, including small and mid-sized organizations. In fact, according to Grand View Research, small and medium enterprises hold 30% of the software’s market share. For many, it’s an important complement to their accounting software.
Expense management software enables businesses to go paperless. It also decreases the time spent calculating and processing expenses, and reduces the likelihood of errors in the process.
But do you need it? And what features should you be looking for when trying to find an expense management software?
What to look for in expense management software
The best expense management software makes handling finances and reimbursements easier. It also ensures all your related data is securely tracked and stored.
So, if you’re thinking about implementing expense management tools for your business, here are the features you should be on the lookout for.
1. It should generate reports automatically.
An excellent expense management tool should help your team quickly collect receipts and classify costs accordingly. When they’re ready, it should then generate expense reports automatically or with a single click.
2. It should offer excellent visibility.
Good expense management software also allows you to view new expenses in real-time, typically through an analytics dashboard. You can easily view and better understand your business' spending with such visibility.
3. It should reduce the time you spend on expense management.
In addition to taking less time to review and approve expenses, automating expense management should enable you to reimburse employees within 24 hours of expense report approvals.
5 benefits of expense management software
Still not sure if expense reporting software is necessary for your business? Here’s five reasons why expense management software can bring a lot of benefit to your team and company.
1. Simpler and faster processes
Traditionally, expense reporting required printing paper copies of invoices, adding receipts, and delivering reports to supervisors, who would then approve or return them to the employee for adjustment.
Fortunately, all these steps can be automated using expense management software.
Employees can add expenses to a report in a variety of ways and when they press "submit", the report is immediately sent to the relevant person for approval. The amount to be reimbursed may be automatically reported to payroll, too.
If the manager assigned to approve or reject employee reports is out of the office, the report may be routed to a temporary approver.
As a result, the system reimburses employees for their expenses faster.
2. Fewer delays and inaccuracies
Expense management software improves accuracy, which also helps expedite employee reimbursements.
For example, employees may make data-entry mistakes while processing expenses manually. Expense management software can pull data directly from bank accounts and credit card transactions. It can also detect errors and duplicate entries and alert you if a report or payment is late.
3. Improved fraud prevention
As reported by the Federal Trade Commission, there were 4.8 million fraud reports and identity theft cases submitted to them in 2020. It's normal for busy financial teams and supervisors to miss fake entries, even from trustworthy workers or contractors. However, it’s tough to get that money back after it's been paid.
Expense management software can alert managers if an amount seems to be excessive. It raises a red flag for further investigation before payment is approved and sent, ultimately reducing fraud cases in companies.
4. Simplified reporting
Reporting and analytics give real-time insight into business spending. Expense management software allows you easily to aggregate all your spending into a single report, or see costs broken down by personnel, project or category.
You can also use expense reporting software to follow best practices for spending control by identifying high-spending employees and chronic rule violators, and monitor each employee's cost patterns over time. An expense management tool can even help identify areas where expense rules need to be clarified or enforced more effectively.
Expense management software assists businesses in complying with local, state, and federal tax regulations. It helps companies correctly categorize and identify expenditures, such as for office, travel and mileage. You can also generate electronic copies of reports and receipts, which are crucial if audited.
Is expense reporting software worth it?
For most businesses, expense management software is a must.
Digitizing expense management helps streamline the operations of any business and enhance efficiency.
It also allows team members to submit expense reports and supporting documents, such as images or scans of receipts, straight from their computer, tablet or cellphone. This way, they don’t have to fill out paper forms or manually keep track of receipts. As a result, it makes reimbursements quick and convenient.
As most businesses have already moved their other operations online, digitizing expense management as well only makes sense, especially if it can help your company stay on budget.
In the long run, the streamlined process and increased efficiency that comes with expense management software will benefit your team and your finances.
When you’re ready to start digitizing your expense management system, Everlance can help. Our all-in-one mileage and expense tracking software can save your organization time and money, while offering a user-friendly platform and always-there service, whenever you need it.
Ready to get started? Schedule a time to meet with our sales team or learn more about our expense tracking system before you get started.