Expense strategy 101: Why you need an expense management solution

By having effective expense management in place, your company can keep finances in check, make any necessary updates, and inform decisions. The right expense management software is key here, too. With the right tech solution, your business can automate a lot of its spend management and ensure that real-time visibility is useful and easy to digest.

What is an expense management strategy?

Expense management strategy is a plan for managing business expenses in order to maximise process efficiency and reduce costs. An effective expense strategy should include any processes for tracking and monitoring expenses and feature the key controls you intend on implementing, like spend limits and blocks. It should also include strategies for reducing or eliminating unnecessary costs, and procedures for approving regular and unexpected expenses.

By implementing a comprehensive expense management strategy, businesses can break down all of the ways they incur expenses and ensure that the financial resources used to track and approve them are as effective as possible. First, they might consider how their expense policy will look for different activities and for different teams and senior leaders. Then they might consider how they will make payments and record (and reimburse) expenses. Finally, they will need to ensure that any payments and expenses are also correctly reconciled within their accounting software to ensure that cash flow is correct, and their business is audit ready.

What is expense management software?

Expense management software is a kind of tool that businesses use to automate and streamline their expense tracking and management processes. This type of software allows employees to easily submit, track, and approve expenses, while providing real-time visibility into expenses for managers and finance teams.

Why Is expense management software necessary?

Expense management software makes it easier to track, monitor, and manage expenses in real-time.

A spend management solution like Payhawk features both cards, easy-to-use expense management software and more, which allows businesses to automatically record all of their expenses whenever they make a payment. This real-time visibility gives businesses a complete overview of spending patterns and lets them pull the right levers in order to save money, make decisions, and close their month quickly.

Complete spend management with in-built automation also helps reduces the risk of fraud or errors that occur because of manual data entry.

What are the benefits of expense management software?

Expense management software can help businesses in many ways:

• By automating the process of tracking expenses, saving time, and reducing errors. With expense management software, employees can submit expenses electronically, rather than with manual processes and paper receipts. The right software can also reduce the risk of lost or missing receipts, which means easier bank reconciliation and potential savings via VAT reclaims
• By providing real-time visibility into expenses. This up-to-date view can help businesses identify areas where they can save money. Plus, get detailed reporting and analytics to help make more informed decisions about company spend
• By preventing fraud and misuse of company funds and enforcing spending policies and guidelines
• By ensuring compliance. A spend management solution, like Payhawk features expense management software that will automatically disapprove or flag out-of-policy purchases
• In addition to these benefits, expense management software can also integrate with other financial systems, such as accounting software, to provide a more comprehensive view of expenses and overall financial performance.

Conclusion

Having an effective expense strategy is essential for any business looking to maximise efficiency and minimise costs. Expense management software including smart automations and machine learning makes it easy to track, monitor, and manage expenses while providing valuable insights into spending patterns.

Interested in learning what a good expense management solution can do for you? Book a demo with one of our experts.