What is Expense Management Software?

What is expense management?

Expense management can refer to any of the systems and processes that businesses and organisations implement in order to manage employee incurred expenses. At a very basic level, expense management could simply 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 a number of drawbacks.  

Examples of expenses

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

• Mileage
• Subsistence
• Parking
• Train fares
• Hotels.

It is important that different types of claim are able to be analysed and attributed to the correct code within an accounts system, especially if expenses get recharged to clients, or attributed to internal projects.  

A typical expense management process

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

1. Employee logs a claim and attaches their receipt to the claim – either digitally or on paper 
2. Employee submits claim to line manager to approval  
3. Line manager approves/rejects claim.  
4. Finance provide a secondary tier of approval to a claim 
5. Finance are responsible for correctly coding the claim before exporting to an accounting system 
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 important for a number of 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 important of all, employees who get their money back on time from expenses paid out of their own 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 Expense Management Software?

Paper based processes, excel spreadsheets, dropbox/sharepoints, and receipts flying around an office simply isn’t enough to keep pace for a lot of businesses, which is where Expense Management Software comes into play.  

Expense Management Software brings together everything an organisation needs in order 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 Expense Management Software for a variety of reasons including a more positive employee experience, more efficient approval routes for managers, and more simplified back office processes for the finance team when it comes to importing to the accounts system and paying employees.  

Expense Management Software also 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
• delivering insights to better control expenditure
• and giving your employees the freedom to do more and focus on critical tasks.

Features of Expense Management Software

• VAT: Configuration of different VAT rates, both custom and default for your users to select when submitting claims. 
• App: App for users to submit and approve claims efficiently whilst on the move.  
• OCR: OCR technology to allow customers to scan in receipts using an app and create claim lines.  
• Currency: Add in additional currencies for end users to submit claims in. A live link with XIGNITE.com allows for automatic pull through of exchange rates for historic claims.  
• Expense Types: Manage a default list of Expense Types within the account, and also the creation of new Expense Types. Configuration of the Nominal Code. Assigning default VAT rates, Expense Type Based Approval, 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 which 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 HMRC 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 in order to extract fully approved claims from the system. Can be used for both reporting purposes and for an import into your Financial management system.  
• Company Policy Message: Create a Policy Message displayed on the system to raise awareness of the company submissions policy.  
• Projects and Tasks: Allow for users to select Projects and Tasks when submitting claims. This can be used for costing purposes.  
• Project based Approval Workflows: Expense Approval based on the Project selected rather than the User or Expense Type. 

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 spend quickly  
• Save time with quick paperless processing 
• Reduce the risk of losses 
• Support compliance within HMRC rules, tax laws and company policies 
• Spot trends and issues quickly with customised reporting dashboards

Read our latest article to learn more about the benefits of expense management software.

Choosing the right Expense Management Software for your business

If you are currently looking for Expense Management Software and you’re not sure which provider is right for you, why not take a tour of Access Expense where you will find out how our expense software: 

• Helps you to enforce your expense policy 
• Minimises the risk of lost or forgotten receipts 
• Maximises your VAT reclaim 
• Saves the claimant, approver and finance team time 
• Cuts your total expense spend 
• Allows you to focus on more value-adding tasks 

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