Whether you’re getting started or scaling up, having the right tools in place to support your growth is key to success. Out of all the areas to focus on, having a clear process for managing employee expenses needs to be a top priority for your business.
The truth is that filling out time-consuming spreadsheets, manually entering data and getting bogged down in receipts and paperwork isn’t going to get the best out of your finance team. Plus, your management team will lack the visibility they need to manage risk, shave down unnecessary expenses and accurately assess budgets.
With the right expense management platform in place, you can power up your people with tools that automate routine tasks, reduce the chance of human error and ensure compliance every step of the way. To help you find a tool that delivers on all fronts, let’s cover five key tips for picking an expense management platform.
Long reimbursement cycles can mean your employees are waiting weeks to be repaid for expenses they’ve incurred. By making your team pay for work expenses with their own money, you’re adding extra steps and friction into your expense management process (and essentially taking a free working capital loan from your employees).
Instead, it’s worth looking for a platform that gives your team access to virtual cards, backed with spend limits to give you total control over your budgets. With maximum limits, real-time monitoring and the ability to freeze cards as needed, your finance team will be able to reduce risk and score easy, secure monitoring of your expense costs.
Plus, the best platforms will allow you to destroy cards after use (such as once a project-specific budget has been spent) to protect you from unexpected charges and fraud.
Cash flow is the lifeblood of every business. Even in uncertain times, you need the confidence to seize opportunities and access the operating capital you need to move fast.
That’s why it's worth seeking out an expense management platform that offers helpful tools like corporate cards. These cards should seamlessly integrate with the expense software and can help you spread out costs, even if you’re waiting on cash to come into the business.
Many business credit cards will set a limit on how much credit you can access, based on your business’s credit score. You’ll also need to check if you’ll be hit with penalty interest rates or extra fees if you don’t repay the balance within a certain time phrase. Plus, if you opt for a pre-paid card, you’re tying up your working capital into the card (whether or not you actually use those funds during the month).
That’s why it's important to find a corporate card that is transparent and has zero hidden fees.
The other important thing to consider is whether the rewards offered by corporate cards actually add value to your business. Some cards might use a points system for every dollar spent which can encourage unnecessary spending, especially if these points go unused.
Recent reports suggest as much as 31% of cardholders never redeem these rewards. Plus the fee structure of the card might make it feel like these points are “free”, when you’re in fact paying for them with fees.
Instead, it's worth looking for cards that offer things like cash back offers or discounts that will deliver tangible rewards rather than encourage surplus spending).
With an expense management platform, you’ll be able to take control of company spending and plug any holes that might be impacting your profitability and cash flow.
To automate this process, make sure to find a platform that offers customisable spend controls and approval thresholds for each user that self-police your expense policy. That allows your team to control transactions before they happen and prevent excessive or out of scope spending.
These platforms should be giving you access to consolidated data for all transactions so you can review spending with ease. Plus, these tools should be able to set limits to ensure expenses are only incurred on company time. That means your finance team will spend less time approving expenses and more time adding strategic value to your business.
Adding new tools to your business is a smart move, but only if you’re not being hit with excessive fees along the way.
Keep an eye out for costs like foreign exchange fees, interest fees, and late fee charges, which can all add up over time and eat away at your business’s cash flow.
It’s a good idea to clarify what you’ll be charged and when before signing up to an expense platform to make sure you’re not going to be stung with unwanted charges.
The best way to get the most of an expense management platform is to ensure it seamlessly integrates with your current tools and systems. Make sure to check that the platform is compatible with your accounting software to ensure your finance team can automate as much as possible from the beginning.
Having the ability to seamlessly integrate with your current workflows and processes is key, particularly as your business scales. The less room you leave for human error, the more chance you have of taking that next step, sooner.