Expense management software helps simplify the process of managing all business expenses by automating it. The management of expense reporting, approval, and compensation of employee business expenses is known as expense management. As traditional expense management techniques involve huge risks, expense management software plays a vital role in eradicating these risks. The software helps reduce the need for paperwork, lowers the amount of time spent handling expenses and minimizes errors.
The size of your business matters less, and you need to use expense management software to ensure smooth cash flows. This software is effective and affordable. The expense management system also provides analytical data tools that help better decide the company’s future spending.
How does expense management software work?
Expense management software is used to keep an eye on their spending to reduce a business’s expenses. Here are some of the steps of how expense management software work:
- The employees make an expense and pay it using their funds.
- The employees take a photo of the receipt as proof of purchase, which is immediately captured and collected.
- The employees submit one or more expense claims through automated expense management software.
- After necessary checks, the approver will reject it, approve it, or may ask for more information.
- If the claim is rejected, then the employee will be notified, and if it is approved, it gets passed to a higher-level approver under the finance team.
- The finance team analyzes the report for non-compliance and uses receipt management.
- All approved claims get reimbursed immediately or are scheduled to be paid later. Payment is directly transferred into the bank account of the employee.
Features of expense management software
Some of the key features and capabilities of expense management software are:
- Tracking all employee’s receipts
- Allowing employees to use their smartphones to capture receipts
- Maintaining spending and making policies regarding the expenses of the company
- Allowing a company to change their spending limits and policy whenever required
- Check for policy violations; if violated, correct, or improve the error
Cashflow with expense management software
Cash flow is the amount of money generated and consumed in a certain period. So, to maintain smooth cash flow in any business, expense management software proves beneficial as it saves time and effort and reduces unplanned future expenses.
Advantages of expense management software
Many medium or small-scale businesses often need clarification about whether to invest in expense management software or not, as it is a bit expensive for this business. But investing in this software benefits businesses a lot. Some of the advantages of expense management software are listed below:
- Helps in reducing the cost of finance
Initially, the cost of finance may be of no or little importance, but over time, the cost of finance can add up. Not only this, but the cost of finance includes penalties you may incur due to overdue payments and the loss of bargaining power due to delayed payments. Customers who pay on time often get preferential treatment (rates and services).
- Ensures better cashflow management
Cashflow management or managing working capital is the prime and basic requirement of any business that a finance manager must need to fulfil. When expenses increase, the cash flow also takes a hit. Any unplanned or early expense would affect your budget or balance. Expense management software ensures the planning of all future spending of a business to ensure cash flow or working capital requirements.
- Pinpoints where expenses are out of control
Expense management software not only ensures reducing repetitive manual processes but also getting an overview of the expense management trend within your company. For example, you need a service once a year but are paying for that month instead of a single time. These expenses could be saved by keeping tabs on expenses. In addition, this software helps identify avoidable and unavoidable expenses with no hassle.
- Reduces manual efforts
Expense management software helps reduce paperwork and the manual effort your team puts into it. As a result, time spent on paperwork and manual entry will be saved. No need to get a receipt, fetch it, check it, make entries, etc.
- Better auditory and compliance management
Monthly, quarterly, and yearly closing of books is something that is essential for the finance department. As the closing of books not only ensures that they are keeping track of various financial aspects and helps with audits at the end of a fiscal year. Preparing audits requires a lot of time and effort due to irregularities in records of documents and data. However, with expense management software, the documents are digitized, automatically reducing efforts. The same goes for compliance, as records are created automatically in real-time, and any exception is recorded, which makes the entire process easier. Records are available at the click of a button.
The bottom line
In contemplation, it is safe to say that expense management software results in smooth cash flow and maintaining working capital.
EnKash is the best spend management and card platform that helps to simplify the cash flow. This platform helps to provide a boost to your business with an intuitive and centralized spend management platform, helping you to save countless work hours across payables, expenses, collections, and accounting.
With EnKash, you can simplify and customize all your expenses in one place. Connect now!