Qualities of the best exoense management solution

How to Choose The Best Expense Management Solution For Your Business

If you’re reading this, it’s likely you’re looking to upgrade your expense management solution or at least considering it.

Although the advantages of doing this are numerous and obvious, we’ll start by pointing out some broad business benefits of upgrading your expense management solution.

Factors to consider while looking for expense management software:

We’ll talk about some questions you need to answer about your business to decide what features matter to you and what don’t. We’ll then take you through a thorough list of features you should ideally be looking for in an expense management solution. We’ll also answer some questions regarding what vendors and solutions to avoid. Finally, we’ll walk you through an ideal solution, and how to get it.

Let’s dive in!

Conviction for Upgrading Your Expense Management Solution

A survey conducted among enterprises and small businesses gave the below-mentioned list of leading challenges in travel and expense management:Leading TEM Challenges Among Organizations Statistics

This result pertains to the following landscape:

Statistics TEM adoption Expense Management for Companies of all sizes

Most organizations look for an upgrade when the need is urgent. If you’re one of them, you’d probably relate to this, and if not, you’ll probably find this as a warning or a suggestive of an upgrade at early stages. 

Whether you’re using spreadsheets or traditional HRMS/Accounting modules, you’re likely to see multiple direct and indirect benefits of automation and upgrade of your expense management processes.

Some benefits of using expense management software are: 

  • Improve Visibility, Restrict Expense Fraud – Believe it or not; statistically, 40% of your employees are likely to commit some form of expense fraud. Avoiding frauds, duplications and more need real-time, accurate visibility into expenses with an audit trail, and that needs a better expense management solution.
  • Save Billable Hours – Your employees and finance team spend hours in manual data entry and processing. These are billable hours being wasted, and have a very high time-cost to your business. Further, these hours are only adding to employee dissatisfaction.
  • Cut Costs – Complete automation of expense management tracking, processing and reimbursements can cut down your costs by around 75%. According to reports, the average time to achieve a unit RoI with an expense management automation solution is less than a year for any organization.
  • Powerful Business Insights & Reports – With detailed, accurate data on travel and employee expenses, your business has the power to plan effective expense policies, budgets, incentives and also negotiate volume discounts with vendors – thereby, keeping your bottom line in check.

Referring to the same report [source] from which we have been sharing the above data, here is what the respondents had to say about the benefits of automation in expense management –

Benefits Achieved With Expense Automation

Deciding What Your Business Needs

Every business has unique needs, and so does yours. Deciding on what you need and what you don’t can be tricky in a jungle of features.

Here are some questions help you decide better:

  • What are the minimum features required by your business?
  • How many claimants and approvers do you have?
  • Is everyone based in one office or in multiple sites in one country?
  • Do you require a multi-entity capability to integrate offices overseas?
  • Do you reimburse in different currencies around the world?
  • Do you want your current expense management software to integrate with your existing accounting or ERP software?
  • Are users going to claim for expenses from an office?
  • Do users need to interact with the system on the move?
  • Do you recharge expense items to clients or projects?
  • Do you want to reclaim domestic or overseas VAT?
  • When would you like the new system in place?

With answers to the above questions, you can start skimming through the feature list below and then zero in on the ones you would absolutely need.

Fyle Feature List - Expense Management Software What features do other organizations find the most value in?

Expense Management Automation is valuable

  • SaaS vendor or On-premise solution?
  SaaS On-Premise
Cost Pay as you go-per user-per month. You’re not bound to the vendor and can leave whenever you want. Up-front capital cost for hardware, software, licensing, lab space, airco etc.
Setup Fast deployment time. Cheaper setup and maintenance. No IT department required. Software updates are pushed automatically. Complex setup and involvement of IT department required. Time to deploy is much longer.
Customization Customizable using open API’s depending on the software vendor. Somewhat customizable depending on software vendor. Most of the time expensive to customize.
Hardware Hardware and software owned reside at the provider site. Customer must provide hardware and system platforms to run apps
Integration Integrations provided depending on the vendor. Open API’s allow you to make your own integrations. Integration with existing software is commonplace but requires plenty of resources of both vendor and client.
Control SaaS provider controls systems but data is owned by a customer. Control of systems.

Will a card-based expense management suit your needs?

A pre-paid card based solution is picking up traction across many organizations, but not without its inherent drawbacks. A prepaid expense based process causes your business to bleed liquid money into employee accounts, and then, later on, recuperate based on the expense data. This involves moving cash in advance, and that is not generally a healthy business move.

Further, a card-based system won’t be able to enable every transaction in developing economies like India, Brazil and more. As many expenses are still happening in cash and other ways, they are non-trackable for prepaid cards.

For a more in-depth analysis into card-based expense management systems, read the blog Expense Management with Prepaid Cards – Is it Really a Good Idea?

We work with a trusted, already engaged vendor who provides a solution, should we buy from them?

The answer is simple – You should buy nothing but the best solution. Expense management is not the core module of any large-scale enterprise vendor, and hence the treatment regarding support, feature requests and priorities will overlook the expense management software.

Further, going with an already engaged vendor often limits integrations and custom connections you might need in the future as your business grows. It’s almost never a good idea to stick within a particular vendor’s ecosystem.

Choosing The Best Expense Management Software

The solution you choose should undoubtedly be able to solve the core business problem here. Easy and thorough, audit-ready tracking of expenses. This involves considering the ease of tracking for your employees, and the ease of processing for your finance teams.

A good solution should be able to enable your business to do a lot more with the expense data, providing analytics and insights to control your bottom-line.

Expense management solution ideally can be broken down into broad modules, and the characteristics of an ideal module would be:

Expense Tracking

    1. The solution should be able to capture expenses with minimum friction, and while on the move.
    2. The expenses captured should be audit ready, paperless, require minimum manual input.
    3. Support types of expenses – ranging from paper receipts, email invoices, mileage tracking, distance & time tracking and more.

Approval & Workflow Automation

  1. Understand organization policy and hierarchy for approvals and flows.
  2. Check for policy violations, duplications and more according to organization policy.
  3. Allow multiple user levels, authorities, and roles for different employees.
  4. Match transactions with claims in case of credit card matching.
  5. Categorize expenses into organization-default segments using tags and categories.

Reporting, Exporting & Integrations

  1. The solution should provide analytics around spend data being captured – team-wise, employee-wise, organization-wise, project-wise and so on.
  2. Allow for vendor insights to enable volume negotiations and vendor localization.
  3. Should allow passing the collected data into further usable forms – PDF, XLS, and more formats.
  4. Should be able to communicate with your accounting and HRMS systems – Integrate with Xero, Tally and more. An open API for custom integrations can be an added advantage.

Usability and Support

  1. An expense management software should aim to make the exercise easier, and it should do it with the least complications. The end-user experience should be purely automated, intuitive.
  2. The vendor should be able to support any queries and breakdowns 24×7.
  3. Financial data is highly critical and proactive customer support would be almost essential.

Finally, what’s your pick?

The market has a plethora of solutions to pick from. Hence you should be wise to pick.

We at Fyle have built our solution crafted to fit perfect for organizations of all sizes.

What’s more?

We’re acing the ease-of-tracking with the world’s first AI powered email plugin.

You can discover more on the new standard in expense management by signing up for a free trial here.

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