Expense strategy 101: Why you need an expense management solution

With an effective expense management approach, your company can keep finances on track, respond quickly to changes, and make more informed decisions. The right software plays a critical role here — helping automate much of your spend management process and giving teams real-time visibility that’s accurate, accessible, and easy to act on.

What is an expense management strategy?

An expense management strategy is your company’s structured approach to controlling, tracking, and optimizing business spending to improve efficiency and reduce unnecessary costs. An effective expense strategy should include any processes for tracking and monitoring expenses and feature the key controls you intend to implement, like spend limits and blocks. It should also include strategies for reducing or eliminating unnecessary costs, and procedures for approving regular and unexpected expenses.

A well-designed expense strategy helps teams understand where costs originate, how spending decisions are made, and which controls ensure accuracy, efficiency, and compliance across the organization. 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 digital solution that automates and streamlines the way businesses capture, track, approve, and reconcile expenses. 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, reducing manual work and helping teams maintain accurate, up-to-date financial information.

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.

Automated spend management also reduces the risk of fraud and eliminates many of the errors that stem from manual data entry or inconsistent approval processes.

What are the benefits of expense management software?

Expense management software offers a wide range of benefits that streamline financial processes, strengthen control over day-to-day spending, and improve efficiency across the entire business:

• It automates expense capture and submission, saving time and significantly reducing manual errors - especially those caused by paper receipts or spreadsheet-based processes. 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
• It provides real-time visibility into spending patterns, helping businesses spot trends, identify cost-saving opportunities, and make faster, data-driven decisions. Plus, get detailed reporting and analytics to help make more informed decisions about company spend
• It strengthens internal controls by enforcing spend policies, flagging out-of-policy purchases, and reducing the risk of fraud or misuse of company funds.
• It simplifies compliance by automatically flagging or blocking out-of-policy expenses, ensuring employees follow company guidelines without extra manual oversight.
• 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

A clear expense strategy is essential for any business aiming to maximize efficiency, improve financial control, and reduce unnecessary costs. Expense management software, including smart automation 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.