Financial experts and economists predict that inflation will persist as a big economic problem in the near run. Global inflation will impact small businesses by escalating operating costs and sapping profits. Small businesses can maintain a positive cash flow in an inflationary environment only by managing operating expenses and employee-initiated expenses efficiently.
Your small business can reduce the time and resources required to record, process, reimburse, track, and audit employee-initiated expenses through automation. But you have to consider several factors to implement the right expense management software for small businesses. For instance, you should prefer cloud-based software to on-premise software to avoid infrastructural costs.
Also, the provider will help you configure, customize, integrate, update, and secure the cloud-based expense management solution. But a single expense management solution may not fit into the requirement of every small business. Hence, you must compare the features, tools, and options provided by expense management solutions based on your organization's current and emerging needs.
9 Things to Consider While Choosing Expense Management Software for Small Business
1. Expense Policy Compliance
It becomes easier for your business to control costs when employees understand reimbursable and non-reimbursable expenses clearly. You can prevent employees from incurring out-of-policy expenses by implementing an elaborate expense policy. The policy will define when, where, and how much an employee can spend for work purposes.
Your small business needs software that enables employees to access the latest expense policies anytime and anywhere. The real-time visibility will make them avoid out-of-policy expenses. Also, they can speed up employee expense reimbursement by filing only in-policy expenses.
2. Multi-Level Approval Workflow
Your policy should allow employees to incur certain out-of-policy expenses. But employees must take approval from authorities before incurring such expenses. Your business needs an expense management solution that automates approval workflow.
The software must allow you to define multilevel approvers and permission levels. It must route the employer's approval request to the appropriate authority. Also, it should make approvers approve or reject the request quickly by sending real-time alerts.
3. Expense Reporting Automation
No small business can save time and resources using manual expense management methods. Your business needs software that facilitates digital expense report generation. The expense receipt and report automation will make it easier for your business to track employee-initiated expenses, conduct expense audits, and speed up employee expense reimbursement.
Hence, your choice of expense management software for small business must enable employees to generate expense reports in minutes by capturing information from the receipts and invoices scanned by them. At the same time, the software should speed up employee expense reimbursement by sending automated reminders to both employees and approvers.
4. Multiple Currency and Card Support
Some small businesses provide employees with corporate cards, while others require employees to use their personal cards. Likewise, small businesses reimburse employee-initiated expenses in multiple currencies when they make employees engage in international business travel. Hence, you should opt for expense management software for small business that supports multiple currencies, cards, and payment options.
5. Expense Fraud Prevention
Expense fraud committed by employees makes businesses lose a significant part of revenue every year. Employees these days execute expense fraud in a variety of ways - inflating expense amounts, claiming fictitious expenses, and filing duplicate reimbursements.
Your business needs software that is effective in detecting and preventing various forms of expense fraud. You should choose an expense management solution that detects duplicate receipts, out-of-policy expenses, and weekend spending automatically using intelligence technologies.
6. Regular Expense Audits
Your business cannot improve the expense management process without conducting expense audits regularly. Expense audit results will help you control overspending, curb unnecessary expenses, ensure expense policy compliance, and prevent expense fraud. Hence, you should implement expense management software for small business that automates expense audits.
The software will enable you to access the expense reports, receipts, and invoices submitted by employees seamlessly. Also, it will simplify expense audits by creating an audit trial. You can conduct expense audits effortlessly by seeing the comments approvers made when they accept or reject an expense claim, along with checking the approval flows.
7. Real-Time Expense Tracking
Employees these days incur a variety of work-related expenses. Small businesses can streamline the expense management process only by tracking the expenses incurred by employees in real time. The leading expense management solutions for small businesses unify employee expense data and facilitate real-time expense tracking by featuring dashboards.
You can use the dashboard to track and manage expenses incurred by individual employees. Also, you have the option to analyze employees' spending behavior and predict future expenses by generating custom reports. The dashboard will make it easier for you to reduce employee expense reimbursement time by measuring the average time required to process and reimburse employee-initiated expenses.
8. Expense Data analysis
Your small business can keep ongoing costs under control only by making employee expense data analysis an ongoing process. You should choose an expense management solution that simplifies the analysis of large volumes of expense data using built-in analytics.
The analytics will help you reduce overspending and wasteful expenses by comparing various types of employee-initiated expenses. Also, the actionable insights provided by the software help you find opportunities to control ongoing costs and improve expense processing.
9. Integration and Extension
The cloud-based expense management software can be integrated with widely-used enterprise solutions using application programming interfaces (APIs). You can boost the expense management process by integrating the software with existing enterprise solutions like ERP, HR, or accounting software.
For instance, you can speed up employee expense reimbursement by integrating expense management software with your accounting or ERP software. The integration will accelerate reimbursements by transferring funds directly to the employee's bank account. Hence, you should check if the software can be integrated with your business's existing enterprise solutions.
The cloud-based expense management software for small business will help your organization automate one of the complex business processes end-to-end. But your organization should consider software solutions that automate multiple business processes, including expense management. For instance, you can curtail ongoing costs by implementing software that automates interrelated processes like business travel management and travel expense management simultaneously.