How Expense Management Software Helps Your Company Conquer Spend

A company that doesn’t closely watch expenses might be setting itself up for failure, or at the very least budget challenges.

But the question is, what’s the best strategy for businesses to handle expense management?

Some very small businesses or freelancers might start off logging company expenses on pen and paper, once they realize it’s in their best interests to keep an eye on company expenses. Even the smallest of spends can add up over time. Slightly larger concerns might attempt to rely on spreadsheets, with cloud-based sources like Google Drive available free of charge.

The rudimentary and free options can be pennywise and pound-foolish, though. A better way to track corporate spending: Expense management software.

Today, we’ll explore how this software gives companies a precise system for tracking, organizing, and streamlining expenses and why it’s even better if it’s part of an AP automation suite.

Expense Management Software Basics

In a survey of professionals from treasury and finance departments by Stampli and Treasury Webinars, “AP in 2022: Expectations, Technology, Opportunity,” more respondents than any other, or 36% identified cash management as the most important skill for their teams to learn. Clearly, companies have a better idea than ever, amidst ongoing financial uncertainty that it’s wise for them to keep an eye on expenses. The good news: It’s getting easier to do this.

Perhaps in the past, expense management was done with a literal locked box of money. These days, it’s happening more and more with software that’s created for sophisticated expense tracking. PYMNTS data noted in mid-2021 that 36% of companies in the United States and United Kingdom were planning to update expense controls and spend management in the next year.

Let’s review a few basics of expense management software, including what it is and where it can be found.

Expense Management Software, Defined

Once perhaps, expense management was largely about entertainment and travel management. Even now, this remains a common duty for accounts payable, with 33% of respondents in a survey by Stampli and Treasury Webinars, “Drivers of AP Success: Metrics, Collaboration, Influence” noting that management of entertainment and travel expenses fell within AP’s scope.

That said, expense management is evolving, with software being used across spend categories and departments. Expense management software can be anything that allows a company to collect, store, and manage its corporate spending. It helps guide a company on when and how it spends money. The software can also spot when unusual transactions arise, which suggest inefficient spending at a minimum and fraud in more serious cases.

How it Works

Expense management software integrates with a company’s accounting software and payment methods to capture transactions and automatically offer spend insights. Forms of payment not synced with an accounting system, such as transactions in cash or unusual currencies might need to be keyed into expense management software in order to be considered with other types of transactions. Most other forms of payment can generally be recorded automatically by expense management systems, or as they’re processed in corresponding AP automation platforms.

The rise in popularity of expense management software could be due in part to advancements in technology like artificial intelligence, with Payments Journal noting that AI was “perfectly suited” for expense management.

“AI looks at everything – every transaction, every line item – spotting duplicates and anomalies over time and learning as it goes,” that site noted. “AI also sees each transaction in context, not in isolation, and can identify problematic patterns across a large number of different users and companies.”

Where to Find It

Generally, there are two options for implementing expense management software:

Using a standalone program

Going with a standalone program that operates independently of a company’s accounting software, perhaps even its enterprise resource planning (ERP) platform such as SAP or Concur, assuming a company has made that kind of investment.

Certainly, going with a standalone option is better than no expense management solution at all, though this approach is going to have some disadvantages. Chief among them, standalone expense management software might not have the same financial data that a company shares across its internal systems.

Using expense management software that’s not connected with other company platforms can lead to inaccurate insights and confusion when it comes time for reconciliations. At worst, it’s a recipe for potential disaster at audit time.

Choosing a AP automation platform

A better option for expense management software is to have it be part of a user-friendly AP automation platform with smooth functionality. We’ll explore more in a bit about why this is.

3 Reasons You Need Expense Management Software

As we noted earlier, a business might think it’s doing enough if it does anything at all to keep an eye on expenses. Certainly, something is better than nothing, though business needs might quickly dictate finding something better.

Here are three reasons why:

1. A Manual Expense Management Process Is a Lot of Work

The average business has a lot of expenses. Even a humble freelancer might concur that they have 50 or 100 minor business expenses in the course of a year, from payment processing fees to cartridges for their printer. Meanwhile, mid-size and enterprise-level businesses can go through hundreds, if not thousands of invoices each month, with Stampli and Treasury Webinars’ survey on AP bottlenecks finding that 31% of businesses were processing more than 1,000 invoices each month.

Now imagine trying to log each of these expenses manually as they come in. The freelancer might do alright if they’re diligent about noting the handful of times each month they pay a bill, though even this can be easy to forget to do. Bookkeeping work is more difficult when a transaction is handled retroactively. As for the larger company, having to log a mountain of expenses by hand is an accounts payable nightmare.

Thing is, expense management software can do much of the heavy lifting for businesses. It can automatically capture, store, and manage expenses, freeing the accounting staff and finance teams up for more high-level analysis.

2. Spending Is Less Effective Without the Right Tools

PYMNTS noted recently that “only 30% of businesses believe that their current B2B payment solutions are either ‘very’ or ‘extremely’ effective in solving key friction points.” The site went on to note that spend management can be one of the contributing sources of friction.

Indeed, poor expense management can lead to all sorts of spending-related issues for businesses. These can include:

• Unnecessary purchases (particularly in the era of mobile apps)
• Some departments agreeing to wildly different pricing than other departments  
• Companies unwittingly buying nonexistent or otherwise fraudulent goods or services

On the other hand, expense management applications can eliminate friction points by delivering more actionable spend data. They can help show what’s working and what isn’t and root out suspicious purchases in real-time or close to it.

3. Easier Approvals and Compliance

Getting approvals for employees to make purchases and secure expense reimbursement can be a hassle for everyone involved. In days of yore, workers might have had to wait weeks after laying out some cash for a customer meal for their company to pay them back, having to submit paper receipts and expense reports and wait for their employee expenses to be approved. It can also be tricky to know if expense policies are being followed.

With expense management software, however, the approval process is a breeze with corporate cards such as Stampli Card, which can be created for individual users and preset pricing amounts.

Expense management software goes beyond just approving a purchase. It also helps enforce spending policies for the company, and everything is tracked as the software logs approval and spending records, which are available for audit.

How Stampli Helps With Expense Management

For those companies that have decided that pen and paper or spreadsheets aren’t enough for expense management, here’s how Stampli can help.

Stampli Card

Stampli Card rapidly accelerates the spend management process. A card payment solution, Stampli Card allows companies to issue payment cards for businesses transaction. Aside from being a great control against fraud — since only authorized users can make payments with preset limits — Stampli Card can also be created with customized spend categories denoted. This allows transactions to funnel for an expedited expense reporting process.

Stampli Card is designed both for quick and easy transactions for employees – great for travel, entertainment and much more – and practically serving as an expense management assistant.

AP Automation Platform

That said, the fact that Stampli Card is just a part of what Stampli does is even better. We provide companies with a cloud-based AP automation platform that helps them process invoices faster, cheaper, and more efficiently. This, in addition to ACH and check payments with Stampli Direct Pay. It also gathers all of their expense management data in one easy-to-use platform. Companies can have veritable audit trails available both for internal analysts and anyone who might show up needing it.

Come see how much easier and better expense management can be with an AP automation platform with workflows that fit your processes, including seamless integrations with your enterprise resource planning (ERP) or accounting system.

End-to-End AP Processing

Part of the reason Stampli’s AP automation platform lends itself so well to expense management is that it enables processing for the entire length of the AP cycle. With Stampli, you control the entire invoice lifecycle as everything in Stampli is tracked from invoice stages to approvals and field updates. Last but not least, with Stampli you can pay outside of system, or within Stampli for end-to-end AP invoice processing and B2B payments.

Use Stampli Card to take your expense management to the next level. Try it today.