What is Expense Management Software?

What is expense management?

Expense management refers to any systems and processes businesses and organisations implement to track employee spending.

At a very basic level, employee expense management could be pieces of paper stapled to a receipt with no software involved. This is how things have been done for many years; however, remitting employee expenses in this way has several drawbacks.

Examples of expenses

Employee expenses could be for just about anything. Common examples include:

• Mileage

• Subsistence

• Parking

• Train fares

• Hotels.

It is essential that different types of claims can be analysed and attributed to the correct code within an accounts system, mainly if expenses get recharged to clients or attributed to internal projects.  

A typical expense management process

Reimbursement processes for employee expenses can look different from organisation to organisation; these differences could include the repayment frequency or the number of approval levels. However, most claims processes look something like the following: 

1. Employees log a claim and attach their receipts to the claim digitally or on paper. 

2. Employee submits a claim to the line manager for approval.  

3. The line manager approves/rejects the claim.  

4. Finance provides a secondary tier of approval to a claim. 

5. Finance is responsible for correctly coding the claim before exporting it to accounting software. 

6. Expense claims are imported into the purchase ledger. 

7. Claimants are remitted as a '‘supplier' from the purchase ledger.   

Why is expense management important? 

Expense management is essential for several reasons:

1. Certain businesses might need to recharge their clients for expenses incurred as part of work they have completed,

2. Businesses can also keep an eye on what employees are spending and ensure expense policies are being followed.

3. Perhaps most importantly, employees who get their money back on time from expenses paid out of their pocket result in a happier and more engaged workforce.  

Without a robust expense management process, businesses won't have the insight or control of what's being spent, employees might become disgruntled because they haven't been paid (or paid incorrectly), and clients might be recharged too much or too little. Either scenario isn't great.  

What is an Expense Management Solution?

Paper-based processes, excel spreadsheets, Dropbox/SharePoint, and receipts flying around an office aren't enough to keep pace for many businesses, which is where a paperless expense management solution comes into play.  

Expense management software combines everything an organisation needs to log, approve, reconcile, and pay claims effectively. It is an application that enables the claim-to-cash process by automating much of it and making it a more positive and efficient experience for all users. 

Why should businesses use Expense Management Software?

Businesses should use streamlined expense management software for various reasons, including a more positive employee experience, more efficient approval routes for managers, and more simplified back-office processes for the finance team when importing to the accounts system and paying employees.  

Expense management software enables businesses to gain deeper insights and statistics about claim trends, policy breaches, and potential rogue spenders.  

Whether a business has 10 or 10,000 employees, if claiming expenses is a regular occurrence for your employees, then using a piece of software designed for expense management will deliver an instant and tangible return on investment through:

• Saving administrative time for your expense management resources,

• Delivering insights for effective expense tracking,

• And give your employees the freedom to do more and focus on critical tasks.

Additionally, your business will experience several compelling benefits:

Handle increased transaction volume

As your business grows, so does the number of expenditures. Manual expense tracking can't keep up with the pace, leading to errors and inefficiencies. An automated expense management system effortlessly scales with your business, handling increased transaction volumes without sacrificing accuracy or efficiency.  

Improve visibility into spending patterns

Visibility into spending patterns is crucial for decision-making as you scale. Expense management systems provide real-time data and analytics, highlighting trends and areas of excess spending. This data allows you to produce accurate expense reports, for make strategic cuts or investments, promoting sustainable growth.  

Streamline your processes across all locations

Maintaining consistent financial processes can be challenging for businesses expanding across different locations or even countries. Expense management systems offer a centralised platform for expense claims and approvals, ensuring consistency and transparency across all locations.  

Preparation for expense tracking audits and compliance  

The more significant your business, the greater the risk of audits and the need for regulatory compliance. With an expense management system, your financial data is organised, up-to-date, and ready for inspection anytime. This reduces the risk of non-compliance and makes audit processes less disruptive.  

Features of Expense Management Software

• GST: Configuration of different GST values, both custom and default, for your users to select when submitting claims. 

• App: Expense app for on-the-go receipt capture, enabling users to submit and approve their claims efficiently on the move.  

• OCR: OCR technology allows customers to scan receipts using an app and create claim lines.  

• Currency: Add additional currencies for end users to submit claims. A live link with XIGNITE.com allows automatic pull-through of exchange rates for historical claims.  

• Expense Types: Manage a default list of expense types within the account and create new ones. Configuration of the Nominal Code. Assigning default VAT rates, Expense Type Approval, and default Receipt Options. Inclusion of Policy Notes, Business Use field, Limit on Claim Value, Must Attach a Receipt option. Make Expense Types visible for specific tag types.  

• Tag Types: Grouping that can be assigned to users. Storing of different departments/cost centres that can link directly to the nominal code. Limit of 2 Tag Types for both Flightpath A and Flightpath B.  

• Approval Routes: Create different Approval Routes so that claims can go through an approval process that fits the company structure.  

• Mileage Classes: Assign ATO or IRD rates or Custom rates to user profiles and vehicles. Automatic calculation of rate when the user creates a mileage claim.  

• Duty of Care: Prevent users from submitting mileage claims until they have uploaded their Duty of Care documentation onto the system.  

• Custom Export: Create a Custom Export to extract fully approved claims from the system. It can be used for reporting and importation into your finance system.  

• Company Policy Message: Create a Policy Message displayed on the system to raise awareness of the company submissions policy.  

• Projects and Tasks: Users can select Projects and Tasks when submitting claims. This can be used for costing purposes.  

• Project-based Approval Workflows: Expense Approval is based on the Project selected rather than the User or Expense Type. 

What are the benefits of Expense Management Software?

Expense Management Software, such as Access Expense, can benefit you in numerous ways. You can:  

• Remove manual processes.

• Enforce expense policy.

• Improve employee experience. 

• Review up-to-date spending quickly.  

• Save time with quick, paperless processing. 

• Reduce the risk of losses. 

• Support compliance with ATO and IRD rules, tax laws and company policies.

• Spot trends and issues quickly with customised reporting dashboards.

Choosing the right Expense Management Software for your business

If you are currently looking for an Expense Management System and you're not sure which provider is right for you, why not download our Access Expense brochure, where you will find out how our expense management software works: 

• It helps you enforce your expense policy. 

• Minimises the risk of lost or forgotten receipts.

• Maximises your GST reclaim.

• It saves the claimant, approver and finance team time. 

• Cuts your total expense spending.

• It allows you to focus on more value-adding tasks. 

Or speak to one of our experts, who will be happy to discuss your organisation's specific expense challenges and the right software for your needs.