In every business, whether it is a small firm or a big organisation, efficient financial planning, budgeting, and management is crucial. A company needs to manage receipts, invoices, and other documents to keep accurate and safe financial records. While this can be done manually, data entry errors will likely occur. Expense management software makes the whole process faster and simpler.
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What is Expense Management Software?
It is an application that controls, tracks, and processes expenses, reimbursements, and credit card transactions. Therefore, by automating them, firms and organizations can easily manage receipts, accounts, expense reports, claims, approvals, etc., in real time. Doing so streamlines the process, reduces manual efforts, and allows you to monitor expenses.
Types of Expense Management
Organizations have different ways of collecting and managing expense-related data, which include the following:
Manual paperwork: Employees submit paper bills, receipts, and notes to the accounting section of the firm, where the submissions are checked, verified, and approved or rejected accordingly. It can be one every month, every four or six months, or every year.
Excel sheets: Spreadsheets reduce the use of paper, but the data entry work involved may lead to errors and consume time.
Software: Using expense management software eliminates the use of paper, saves time, and provides accurate results.
Why an Expense Management Software Required?
Every company spends on travel and expenses. For instance, a company may give daily allowances to its employees for meals, daily commute or travel charges, accommodation, and expenditure for business conducted outside of the office, etc. Therefore, it also needs to keep track of all these expenses and document all of this for tax purposes as well. The software automates everything and makes reimbursements and documentation faster and easier.
Role of Expense Management Software
Good software for expense management not only keeps track of employees’ expenditures but also regulates how the company reimburses those expenses. Thereby, also helping in financial planning and budgeting. Listed below are a few roles performed by expense management software.
- Faster Reimbursements
When an employee makes an expense on behalf of the company, they need to submit reports or documentation, which may be in the form of scans, photos of the bills, and receipts. Instead of carrying the slips to the department and requesting verification and approval for reimbursement, they can upload the invoice on the software. Doing so eliminates the need to fill out forms. It also expedites the reimbursement process and thus keeps the employees happy with timely reimbursements. An expense management software provides an efficient way to manage expenses with remote employees as well.
- Fewer Errors and Delays
In addition to speeding up the reimbursement process, the software features provide accuracy. It scans and analyses the receipts. The software also sorts the data itself. This results in lesser data entry errors. In addition, it can also flag errors and prevent duplicate entries.
- Useful Insights
Expense management software makes accounting and bookkeeping an easy task. It gives valuable insights which can lead to better outcomes. You can review data and spot problems before they arise.
- Compliance
Expense management software helps organizations provide tax agencies with the correct and necessary details. Expenses can be categorized into different groups, such as office, travel, meals, etc. Other expenses that are not tax deductible can be removed. You can also easily access copies of all the reports and bills in case the company is audited.
- Improved Visibility
The software presents data in an easy-to-understand and explained form. Managers and clients can view the analyzed reports and understand how the expenses have been incurred and dealt with. You can even save the data for future reference. Tasks can be automated or delegated. Thus this improves visibility and communication.
- Increased Efficiency
Since the need to manually fill forms and enter data has been eliminated, the employees can now focus on their work better. This improves the input and output ratio in the workplace. Faster reimbursements mean employees remain happy and not frustrated by any delays. Therefore, they add value to the organization by working more efficiently.
Features of an Expense Management Software
While there are many advantages of using software, here are some of the features:
- You can use smartphones to capture receipts, invoices, financial documents, etc.
- It automatically publishes the receipts on the accounting software.
- It differentiates all the documents and sorts the data accordingly.
- Easily sync your bank accounts with the software.
- Uses OCR technology to analyze the data.
- Integrate with accounting software properly.
- All the receipts reach the designated departments.
- It manages approvals or rejections.
Conclusion
Managing expenses remains one of the most important concerns for any company. Earlier, this was done manually, wherein employees had to submit receipts and notes to the accounting department, which would verify and approve their expenses. However, expense management software makes it easy and error-free. With a few clicks, you can scan, capture and upload bills and receipts in seconds. The expense management software extracts and analyses information and sorts it just as quickly.
