Your Guide To Choosing Business Expense Management Systems

If you’re a business owner, you’d most certainly agree that there is no sure-shot formula for success. Some chunks of running a business are actually trial and error. Yet, many errors can be avoided if some vigilance is practiced when making choices. One choice that can benefit a business’s financial health is choosing an expense management system. Here’s how to be vigilant when making this choice.

1. Identify business issues:

Not all businesses may have the same pain points, even if they belong to the same business category or domain. Thus, each business should first evaluate which feature of expense management software would benefit it the most.

Consider the example of a business with huge monthly expenses. Pain points for them could be receding profit margins and decreasing efficiency due to manual data entry. An automated and advanced expense management system could effectively address these issues. If the system provides detailed spend analysis, the company can gain more insights into what cost-saving opportunities already exist. Likewise, cutting down on manual data entry would allow more time to focus on other areas of expense optimization.

2. Identify the scale:

Generally, large-scale companies have a larger workforce than those of a smaller scale. From an expense perspective, what could be different between these two companies, other than the larger company having presumably more expenses? Reimbursements.

Handling a larger workforce implies having to fulfill financial obligations toward every employee. Typically, businesses have a separate team that figures out reimbursement – manually. While such an approach may still make sense for a smaller-scale company, a larger company would certainly require something that automates reimbursement management. Advanced expense management software can help here. Certain software programs allow employers to feed reimbursement policies into the system so that any reimbursement request that abides by the policy gets approved automatically.

Likewise, a large company can have other significant challenges that smaller businesses may not face to the same degree, and vice versa. Identifying issues related to scalability is also a decider of what expense management features would benefit the business.

3. Choosing add-ons:

While the core features of an expense management system are crucial, the right add-ons can transform it from a useful tool into an indispensable part of financial operations. Some useful add-ons include:

• Corporate cards: Corporate cards and expense management systems may seem largely unrelated. In reality, they have a complementary relationship. Corporate cards can help automate expense tracking. But, for this to happen, the expense management software would need to be compatible with the corporate card system, allowing smooth data transfer. When choosing an expense management system, it’s important to check if this feature is available. Certain expense management systems even support the generation of virtual corporate cards. This feature can greatly help businesses when handling expenses in the physical absence of a designated financial manager, such as when traveling overseas.
• Expense limit setup: In addition to reporting expenses in real time, a business may benefit from setting limits for each vendor. This is particularly true for small businesses on a limited budget. A software program that allows this can be a great investment, even if it has a higher price tag.
• Multi-currency support: Currency conversions and tax compliance can be tricky to figure out if a business operates internationally. Businesses with a substantial international client base may want to consider getting expense software that can handle transactions in multiple currencies. Sometimes, this feature may be presented as an add-on. Having this feature would allow for faster financial management and segregation of expenses done in foreign currencies.

By clearly identifying and prioritizing business issues, business owners can focus on finding an expense management system that addresses the most pressing business needs. This targeted approach not only ensures that funds are invested in a solution that provides tangible benefits but also helps streamline the selection process, allowing easy elimination of options that don’t address the core pain points. Further, expense management systems should be chosen in a way that allows scalability and easier management. Add-ons could also be chosen to improve the efficiency of the expense management system already in use. By utilizing automation to streamline operations, business growth would be more about trials and less about errors.