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The ultimate guide to choosing the best expense management software for your business
Are you from the finance team and ever wondered why employee expense reports were never submitted on time? Are you fed up with numerous reminder emails to get expense reports on time? Always receive reasons from your sales team on smudged and lost receipts? Not able to reconcile credit card transactions accurately? And finally, not able to figure a way to control your escalating T&E costs, because you dont have visibility of how and where dollars are spent? This article is for you.
This article explores the importance of expense management for businesses, things to do before even exploring a expense management software, features to consider while choosing the best expense management software, best practices for implementation and finally, how to do a performance and policy alignment review and assessment for the existing software.
What is expense management software? And why does your business need one?
Expense management software automates the employee expense management software from receipt capture to reimbursements. It eliminates the manual expense reporting, allowing employees to record an expense as it happens, allowing them to focus on their core tasks. It is beyond "just a digital transformation tool" but a strategic asset to any organization to gain complete visibility of their spending, enforce policy compliance, and save costs.
Let's see its benefits beyond just a process automation tool:
Time-saving and productivity improvement
For employers, approvers, and the finance team, automated expense software eliminates mundane manual tasks, allowing them to focus on their core tasks.
Cost control and savings
Identify overspending, enforce policies, prevent fraudulent transactions, and leverage data to eliminate maverick spend and drive stronger data driven negotiations.
Enhanced accuracy and reduced errors
Automated receipt capture with AI-powered OCR and direct integrations minimize the errors of manual data entry mistakes.
Robust compliance and audit readiness
With automated expense management software policy enforcement, storage of receipts and documents, audit trails become easy and simple, allowing for a timely closing of books.
Real-time visibility and reporting
Smarter decision-making with real-time access and visibility of data and reports suited to organizational needs such as budgeting and forecasting.
Increased employee satisfaction
Faster reimbursements and more convenience due to automated expense capture, leading to heightened morale of employees.
Choosing the framework: A step-by-step guide
Step 1: Identify your needs and objectives
Integrate T&E management with your broader financial strategy
Aligning T&E policies with financial strategy is fundamental. These combined elements—policies, budgets, rules, limits, and processes—directly fuel company growth. For eg: Companies need to calculate the impact of business travel on their revenue. According to oxford economics and ACTE $1 spent on business travel drives $12.50 in revenue, but only 13% of companies track trip ROI. Although, this differs for different industries. Businesses must identify this statistic and benchmark for their industry.
Current pain-points
List down the challenges in your expense management process like 'too much time spent on reports', 'spend visibility', 'compliance issues' with support data, if available, like reimbursement time, approval time etc.
Build a needs list based on your growth projections
Build a list of what you need based on your current needs and growth projections. How might your needs evolve in 3-5 years? Do you need global expense management to handle expenses? Does it require multi-currency management? Ask these questions. Always have a five-year horizon for planning purposes.
Set up a T&E policy
A key process in this step is setting up an employee travel and expense policy and documenting it. A travel and expense policy is a detailed guideline document that covers directives and regulations for business travel bookings and employee expenses for the company. For help, refer to Zoho Expense's guide to building your company's travel and expense policy.
Budget and user licenses
Determine your budget for software subscription and implementation, the number of employees who will need access to the software based on their travel pattern, or the approximate number of active travelers in any given month. This is needed as most software offer "all user "and "active user" pricing models.
Step 2: Features to consider during selection
Automation capabilities
- Employee self-booking tool with automated policy compliance
- Automated receipt scanning (with AI-powered OCR) with multiple ways of expense capture like email forwarding, mail/web extensions, sharing within apps, and integrations with a third party like Uber, Lyft, andAmazon to get the receipts directly into the system
- Automated expense categorization
- Automated policy enforcement (flagging out-of-policy spending in real-time)
- Automated real-time credit card reconciliation/feeds
- Automatic report generation
- Automatic mileage tracking (if your organization has a mileage reimbursement policy)
- Automated per-diem based on country compliance
User experience (UX) and mobile app
- Intuitive and employee-friendly interface
- Easy to adapt and learn interface for both employees and admins
- Mobile-first approach - Does the software follow a mobile-first approach? Can employees manage expenses through mobile on-the-go?
Custom approval workflows
- Customizable, multi-level approval hierarchies based on organization
- Automated approval routing based on expense type, amount, or department
Spend and audit controls
- Compatible with complicated travel and expense policies
- Designation/department-wise policy configuration
- Hard and soft rules for policy enforcement based on category, user, and department limits
- Live budget tracking
- Fraud detection, receipt mismatch, audit trails
Integrations
- Seamless integration with the accounting software
- Integration with HRIS, payroll, and CRM.
- Third-party integrations with corporate card networks like Visa, Mastercard, and Amex. Integrations with ride-sharing apps like Uber, Bolt, and Lyft.
- Integrations with emission tracking software, VAT reclaim software, collaboration software like WhatsApp, Zoho Cliq, Slack, and more.
Reporting and analytics
- Default, customizable, and easy-to-build reports and dashboards
- Real-time visibility of spend with inbuilt AI-powered analytics
- Ability to track KPIs such as average expense processing time, compliance with organization policy, and such.
- Spending pattern insight and ways to save costs.
Compliance and security
- Advanced audit trails for all transactions, including receipt information and exchange rate manipulation.
- Encryption of data and stringent security standards.
- Compliance with relevant regional tax laws (e.g., US state taxes, India GST, etc.) and data privacy acts (e.g., GDPR).
- Custom compliance policy configurable.
Scalability and flexibility
- Can it handle your current and future transaction volume and user base and take any peak volume surge?
- Can policies and workflows be easily adapted and configured?
- Multi-currency and multi-entity support in case of global expense management (if applicable).
Customer support and training
- Support is available and of high quality (live chat, phone, email).
- Training materials such as help documents and videos for users and administrators.
Step 3: Evaluate and select
- Shortlisting vendors: Shortlist 3-4 vendors based on your defined needs and essential features.
- Requesting demos: See the software in action with representatives from all stakeholders, focusing on your specific use cases.
- User trials/pilots: Test with a small set of users to receive real-world feedback by leveraging free trials.
- Checking reviews and references: Examine independent review websites and request customer references.
- Knowing pricing models: Per-user, active-user, or per-report based?
- Understand hidden costs. For example, see if there is a built-in automatic mileage tracking tool or if you need to pay extra (implementation, support, extra add-on features).
Implementation best practices
Build a Proof of Concept (POC): Start small, then expand.
Internal communication: Ensure employees understand updated expense policies and software usage.
Comprehensive training: Every user must receive comprehensive product training.
Continuous feedback loop: Gather input from users and refine processes within 6 months
Conclusion
As we discussed in this article, expense management software is just beyond your regular "digital transformation" tool but a key piece in the organization's spend management strategy and one of the essential drivers for enhancing employee experience and empowering businesses to gain control and save money.
Ready to revolutionize your expense management? Explore how Zoho Expense ticks all the boxes discussed above. Start by booking a personalized demo with Zoho Expense.
Satheesh KPSatheesh heads global product marketing at Zoho Expense & Spend , a part of Zoho's Finance Suite. He has 17+ years of industry experience across multiple industries and regions. His areas of interest include technological advancements in finance, travel and expense management, spend management, and more.