Expense management systems help a company to manage the cost involved in manual expense reporting. Travel expense management systems, for example, help the organization to keep track of and manage the travel expenses of its employees. The same goes for telecom expense management systems. While these systems may not generate money, they help save money by reducing the costs incurred by manual reporting. That said, let’s look at the benefits and examples of expense management systems, with a little peek at the cloud-based systems.
What Are Expense Management Systems?
Expense management systems are software that automates most of the employee cost reimbursement process. The software eliminates the need for paper, reduces the amount of time spent managing spending, and reduces errors.
What Do Expense Management Programs Look For?
Expense management systems automate the recording, tracking, approval, and payment of workers’ reimbursable expenses. They work in tandem with the company’s expense management strategy to guarantee that permitted (or unapproved) expenses are not overspent.
An expense management system also provides analytical capabilities that assist the company in making better judgments regarding future spending and informing any necessary policy changes. Finally, by accurately reporting all expenses, the system assists companies in maintaining compliance and responsibility.
Features of Expense Management Systems
The following are some of the most important features and capabilities of expense management systems:
- Keep track of all employee receipts.
- Allow staff to capture receipts using their smartphones.
- Place the receipts on a central dashboard.
- Establish spending limitations and company policies.
- Allow businesses to alter these limits and rules as needed.
- Connect to corporate credit cards (if applicable)
- Send the receipts to the proper approvers.
- Manage those approvals or highlight those that require additional attention.
- Examine for policy infractions.
- Plan reimbursement cheques for payment.
Why Should You Use an Expense Management System?
Manual expense report handling is both costly and inefficient. The Global Business Travel Association estimates that it takes on average:
- 20 minutes to complete one expense report
- 18 minutes to correct an expenditure report.
- $58 to process one expenditure report
- $52 to fix one expense report
Companies that automate their expense management processes can significantly reduce the amount of time and money spent on this critical operation. At the same time, businesses obtain deeper insights into individual employees’ spending habits, making it easier to identify exceptionally high expenses and handle them.
How to Select an Expense Management System
Today, there are numerous expense management systems available, and not all of them are created equal. As with any technology purchase, you’ll want to ensure that the solution provides the appropriate amount of functionality, can suit your company’s specific needs, and includes a high level of post-sale support.
Common features to check for and compare between providers include:
- Audit trails created through document management.
- Simple, adaptable approval processes.
- Customizable expense policies with real-time employee compliance checks.
- Mobile accessibility on a wide range of devices.
- Reporting and analytics
- Integration with other software applications.
After you’ve established your company’s requirements, look into your possibilities and request demonstrations. Speak with other businesses (ideally in your field) that are effectively employing an expense management system, and make sure to weigh numerous possibilities before making your ultimate pick.
Cloud-Based Expense Management Systems
Cloud-based Expense Management systems can assist your organization, no matter how big or little, expand. They are not only cost-effective, but they also reduce space for error and offer advanced analytics for a more in-depth understanding of your organization’s financial health.
What Are Cloud-Based Expense Management Systems?
Cloud computing has altered how organizations work. It has completely transformed the data collection, storage, and processing processes. Cloud computing characteristics have revolutionized many parts of the business, from customer connections to expense management to data security.
The responsibilities of cloud-based expense management systems include:
- Finding cost-cutting opportunities
- Examining total expenses
- Managing Excessive Spending
The relationship is much more simplified when it is cloud-based, leaving less space for error or compromise. It’s also an effective money-saving strategy. Furthermore, regardless of where they are at any one time, employees and business owners are on the same page.
Often, an expense cloud will also permit integration with other software features, such as:
- Travel planning software
- Time management software
- Software for workforce management
- Software for accounting
What Are The Advantages Of Using Cloud-Based Expense Management Systems?
#1. It is quick and inexpensive.
When it comes to expenditure processing, the old adage “time is money” could not be more true. Expense management does not create income, but it is something that every company must do in order to stay on track.
A cloud-based expense management system is precise, simple, and easy to use. The heavy job has already been done in the background. All that remains for users to do is enter the necessary information and numbers.
Using cloud-based automated expense management systems ensures cost control because it leaves minimal space for human error. It can drastically cut IT expenses and the cost of processing each report by switching from a manual to an automated approach.
#2. It allows for seamless collaboration.
When it comes to employee spending, the majority of purchases are made while traveling. But the days of saving a stack of receipts and then entering what you’ve spent when you get home are long gone.
Finance teams and other staff can interact from many places using current expenditure reporting software. The receipt management function allows businesses to view expense data from a centralized storage location (the cloud.)
#3. It removes the possibility of errors.
The longer staff keep receipts or wait to return to the office to enter claims and expenses, the more chance for error there is.
An expense management system eliminates errors in entry and processing. This is primarily due to the fact that information may be disseminated from anywhere and at any time.
A cloud-based system also provides more transparency. Furthermore, online expenditure reporting software detects duplicate invoices quickly, allowing them to be evaluated and deleted before they have an impact on the reported numbers.
#4. It’s safer
The majority of data breaches are caused by human mistakes. Here are some examples of how employee actions can result in a security breach:
- Certain information is accidentally leaked.
- Emails sent to the incorrect recipients
- Documentation has been misplaced or stolen.
- Theft of hardware
- Inadequately discarded paperwork
When you choose cloud-based cost management systems, you will benefit from the greatest cyber security. Furthermore, since employees may enter data from anywhere, there is less potential for misplaced papers and sending sensitive information via email, among other things.
Just remember to teach your employees about things like opening the wrong emails, clicking on malicious links, or using insecure networks by creating an online course or ad hoc training materials. The more knowledgeable they are, the more you will benefit from your protected expense cloud.
#5. It provides improved analytics and transparency.
A cloud-based Expense Management Software is both accessible and sophisticated. It gives businesses and users visibility into areas that require attention. An Expense Management Software that is cloud-based is not only accessible but also intelligent. It gives businesses and users visibility into areas that need to be improved, such as spending management and business process optimization.
Managers may negotiate more cost-effective travel arrangements when they have consistent and transparent access to data. Furthermore, they can rapidly detect faults or deliberate fraud before it occurs.
The Best Expense Management Systems
#1. Zoho Expense
Zoho Expense is ideal for everyone, from freelancers to huge corporations. The platform makes spending management easier. From application to reimbursement, everything is quick and easy.
#2. Divvy
Divvy is all on ease of use. This free cost management program will connect you to as many credit cards as you need to track your spending. It speeds up the process of recording and categorizing all transactions. You’ll never have to look for receipts for reimbursements again!
#3. Rydoo Outlay
Rydoo Expense is perfect for fast-growing mid to large-sized organizations. The expenditure platform allows you to manage your spending from anywhere at any time. You receive an easy-to-use and controlled spending manager that assists you in staying on top of financial costs.
#4. FreshBooks
FreshBooks is a global accounting management software built primarily for small businesses. It boasts one of the highest levels of client satisfaction. Freshbooks’ 24 million subscriber base demonstrates that it provides one of the top expenditure management products on the market.
#5. Expensify
Expensify is an expenditure management program that may be used by anyone. It can handle any need, from personal financial reporting to huge company spending management. Through simple data and reporting-driven processes, the software controls spending, transactions, and money in real-time.
Does QuickBooks Do Expense Management?
Although not listed here, QuickBooks is one of the effective expense management tools you can use for your organization.
Travel and Expense Management Systems
Travel management is time-consuming, but expense management systems ensure you have a clear picture of all your travel expenses.
Business travel becomes much easier to arrange, change, and manage with the correct systems and software. It can also assist in saving money and avoiding overpaying, which is critical for small firms with restricted finances.
What are Travel and Expense Management Systems?
Travel and expense management systems are all-in-one solutions for managing and tracking corporate travel expenses. T&E management systems are essential for firms sending staff on corporate travel, whether it’s for planning travel, monitoring traveling employees, or preparing expense reports.
Corporate travel and expense management systems may help businesses of all sizes. It’s critical to have a full perspective of your corporate travel expenses as well as expert customer service if you run into any problems. It also aids in planning travel in accordance with your company’s travel policy and streamlines your billing process.
The Most Effective Travel and Expense Management Systems
#1. TravelPerk
TravelPerk is a business travel management platform that makes it simple for customers to plan and manage corporate travel. The system interfaces with a variety of different products, including Rydoo and Circula, two major expense management platforms. This guarantees that you have everything you need on a single, simple platform.
TravelPerk also provides a flexible travel solution, FlexiPerk, to assist organizations in reducing wasteful trip expenses. Businesses that cancel up to two hours in advance can get at least 80% of their money back with FlexiPerk.
#2. Fyle
Fyle is expense management software that helps firms and people manage expenses and reimbursements more effectively. It interfaces with TravelPerk to provide seamless travel expenditure reporting in addition to accounting and personnel data integrations. It also provides comprehensive control and visibility over T&E procedures to financial managers.
Fyle cannot assist with corporate travel planning, but its combination with TravelPerk provides travel managers with a single location to handle all business travel operations. Any excursions booked using Travelperk will be created as expenses in Fyle, with invoices attached as attachments. The two solutions work in tandem to provide you with a complete picture of your trip expenses.
#3. SAP Concur
SAP Concur is a travel and expense management software that is all-in-one. It aids in the automation of your job operations for a more straightforward travel management experience. It’s available in hotels, airline tickets, and taxis.
#4. TravelBank
TravelBank is another software that combines spending and travel management. It offers a variety of products to help you simplify your travel and expenditure management.
Overall, consumers say TravelPerk is easier to set up, use, and manage than TravelBank. TravelPerk satisfies reviewers’ demands better than TravelBank, and the high-quality help supplied by TravelPerk’s customer care team is unrivaled.
#5. Emburse Certify
Emburse Certify is an expense management program that allows you to book travel directly from the platform or by integrating with another travel management system.
This software allows you to deliver expenditure reports, handle accounts payable, and manage invoices all from a single platform.
Telecom Expense Management Systems
The purpose of telecom expense management (TEM) systems was to control fixed phone line monthly expenses. It has since grown to include the management of wireless, voice, and data services, with the purpose of lowering risk and cost. Finance, IT, and procurement departments gain from employing these services by simplifying the cost management of corporate communications and inventory.
Telecom expense management systems are now automated to alleviate the burden of billing and monitoring spending on a daily basis to guarantee targets are fulfilled. Having total visibility over your communication systems, mobile devices, and circuits provides a business with a snapshot of expenses, which aids in the improvement of efficiency. C-level technology strategic decision-making is also aided by TEM software products.
The functions of TEM software are comparable to those of mobile device management (MDM), which give a wide variety of security capabilities and are thus suitable for commercial use. TEM goods, on the other hand, are more focused on the following areas:
- Inventory control and change management
- Sourcing
- Purchasing and fulfillment
- Invoice administration
- Expense control (including validation and optimization)
- Chargeback and use management
- Payment of bills
- Management of Enterprise Mobility (EMM)
Telecom Expense Management (TEM) systems include:
Clearview, Cass Telecom Expense Management (TEM), Saaswedo mytem360, Tangoe Platform, Upland Cimpl, Widepoint Telecom Lifecycle Management, brightfin (MobiChord + Mobile Solutions + visage), and One Source are just a few of the companies that offer telecom expense management.
How Do You Manage Expense Reports?
- Have a well-defined expense policy.
- Make it simple to report and track expenses.
- Make Corporate Credit Cards available.
- Create a routine audit.
How can Microsoft Excel assist you in managing expenses?
Expense tracking templates are available in Excel. The Expense Report template, which includes sub-headings for several types of business expenditures, is a popular option. The data is presented as columns, each of which can have its own label or header modified or removed if it doesn’t serve the user’s needs.
How do you manage monthly expenses?
You may avoid overspending on frivolous items and still have some money put away by allocating 50% of your earnings to necessities and 30% to luxuries. Rent/mortgage, utilities, food, clothing, and other other expenditures are all examples of necessities.
What is the difference between expense and cost?
Although the terms “cost” and “expense” are sometimes used interchangeably, there are important distinctions between the two that companies must take into account. Expenses are reoccurring costs like staff salaries or rent on a storefront, while costs are the initial outlay required to buy an asset.
When should expenses be recorded?
A company’s income and expenditures are tallied as soon as possible after they are earned and incurred, respectively, under the accrual basis of accounting. Contrary to the cash basis of accounting, which requires that transactions be recorded only when cash actually changes hands, this action is not reflected in the books until later.
To summarize
Expense management systems can assist businesses in organizing and managing corporate travel, telecom, and associated expenses. Businesses may help save expenses and hassle by using the correct expense management systems. A complete travel and expense management system assist both the travel manager and the finance manager in creating more cost-effective travel programs.
Frequently Asked Questions
What is expense reimbursement system?
An expense reimbursement system is the way businesses pay back their employees who have spent their own money on business-related expenses.
Do expense reimbursements count as income?
Expense reimbursements are taxable as part of gross income for employees.
What is a spend management platform?
Spend management platforms are software that tracks and manages non-payroll business expenses.
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