11 Best Expense Management Software

What Is Expense Management Software?

Expense Management Software is a system that automates and monitors employee expenses. It’s widely used by businesses of all sizes to streamline the process of managing expenses.

The software uses optical character recognition (OCR) technology to capture receipt details and auto-populate report fields, which reduces the need for manual data entry. It also enforces spending limits and policy rules to avoid surprises and reject erroneous submissions.

One of the key benefits is quick reimbursements, as automated approval workflows ensure that employee or contractor reimbursements occur quickly. 

The software also replaces manual paperwork with an automated workflow to upload, track, and submit expense receipts conveniently. Administrators can access these reimbursement receipts through a streamlined process to approve the claims while checking for any corporate policy violations.

Furthermore, the software assists organizations in keeping track of their employees’ corporate expenses.

What Are the Core Functions of Expense Management Software?

Expense Management Software is designed to streamline and automate the process of managing, tracking, and controlling employee expenses. Here are some of the core functions of Expense Management Software:

1. Automated Recording: The software automates the recording of reimbursable expenses incurred by employees.
2. Expense Tracking: It tracks employee spending and determines how the organization will reimburse the costs incurred.
3. Approval and Reimbursement: The software handles the approval and payment of expenses. Approved expenses are then automatically routed to accounting for reimbursement.
4. Policy Compliance: The software aligns with the company’s expense management policy to ensure the business doesn’t overspend on approved (or unapproved) expenses.
5. Receipt Capture: It uses optical character recognition (OCR) technology to capture receipt details and auto-populate report fields.
6. Expense Submission: The software allows for the submission of expense reports and alerts managers to expense reports needing review.
7. Policy Enforcement: The software enforces spending limits and policy rules to avoid surprises and reject erroneous submissions.
8. Quick Reimbursements: Automated approval workflows ensure that employee or contractor reimbursements occur quickly.

These functions help businesses manage their expenses more efficiently, reduce errors, and distribute reimbursements faster. They also help ensure policy compliance and provide valuable insights into spending patterns. 

Why Should Businesses Use Expense Management Software?

Businesses should use Expense Management Software because it simplifies processes, expedites employee reimbursement, eliminates accounting inaccuracies, improves operational efficiency, enforces policy compliance, provides real-time reports for better visibility, enhances productivity, ensures tax compliance, provides security, and is environmentally friendly.

1. Simplifies Processes: EMS automates the expense management process, making it easier for employees to submit and managers to approve expense reports.
2. Expedite Employee Reimbursement: It speeds up the reimbursement process, reducing the time employees have to wait to be repaid for their out-of-pocket expenses.
3. Eliminates Accounting Inaccuracies: EMS helps to reduce errors in expense reporting and accounting, ensuring more accurate financial records.
4. Improving Operational Efficiency: EMS can significantly increase operational efficiency by automating and streamlining expense management.
5. Enforces Policy Compliance: Custom rules in the software can enforce company policies, detect fraudulent activities, and prevent out-of-policy expenses.
6. Improves Visibility with Real-Time Reports: EMS provides real-time reports, improving spending visibility and enabling better financial planning and analysis.
7. Enhances Productivity: By automating manual tasks, EMS can enhance productivity and allow employees to focus on more strategic tasks.
8. Ensures Tax Compliance: EMS helps document all expenses for tax purposes, ensuring compliance with tax regulations and policies.
9. Provides Security: EMS adds an additional layer of security, protecting sensitive financial data.
10. Environmentally Friendly: As an entirely paperless process, EMS is a more environmentally friendly option.

What Are the Potential Drawbacks or Limitations of Expense Management Platforms?

The potential drawbacks or limitations of expense management platforms include human errors, complex approval processes, risk of expense fraud, challenges in ensuring expense policy compliance, lack of spend visibility, complicated processes, and potentially negative impacts on employee experience.

1. Incomplete Data and Lack of Integration: Different data sources can create data silos, making it difficult to have a unified view of all expenses. This can increase errors and create inaccuracies.
2. Manual and Time-Consuming Expense Classification: Despite automation, some aspects of expense classification may still require manual intervention, which can be time-consuming.
3. Difficulties in Controlling Tail Spend: Tail spending (the many small, infrequent purchases made by a company) can be difficult to control and track.
4. Poor Tracking of Cash Flow and Payment Terms: Some platforms may not provide adequate tools for tracking cash flow and payment terms.
5. Inadequate Spend Visibility and Reporting Capabilities: Not all platforms provide comprehensive spend visibility and reporting capabilities.
6. Not Suitable for Large Companies with Multiple Departments: Some software might not benefit a company with multiple departments.
7. Cost: While many platforms offer cost savings through improved efficiency, the initial cost of implementing an Expense Management Platform can be high.
8. Training and Adoption: Employees may need training to use the platform effectively, and there may be resistance to adopting new technology.
9. Dependence on Vendor: There can be a risk of becoming too dependent on a single vendor, especially if the platform is cloud-based.
10. Security Concerns: While most platforms have robust security measures, there is always a risk of data breaches or cyber-attacks.

What Are the Different Types of Expense Management Software?

The different types of expense management software are general expense management software, travel & expense software, time tracking & expense software, payroll & expense software, and workforce management & expense software.

What Are the Pros and Cons of Each Type of Expense Management Software?

The pros and cons of each type of expense management software vary based on factors such as ease of use, integration capabilities, automation features, reporting options, and cost. Here are the pros and cons of each type of expense management software:

General Expense Management Software

Pros:

• Streamlines and automates the business’ expense entry, reducing administrative effort.
• Uses technology to capture receipt details and auto-populate report fields, reducing manual data entry.

Cons:

• May require training for employees to understand and use effectively.
• May not be as specialized or feature-rich as other types of expense management software.

Travel & Expense Software

Pros:

• Efficiently manages travel-related expenses.
• Can be integrated with travel management software for seamless operation.

Cons:

• May not be necessary for businesses without frequent travel requirements.
• Can be more complex due to the integration of travel management features.

Time Tracking & Expense Software

Pros:

• Helps businesses track the time spent on various tasks and the associated costs.
• It can be integrated with time-tracking software for better efficiency.

Cons:

• May not be necessary for businesses that don’t bill clients based on time spent.
• Requires diligent time tracking from employees, which may be seen as intrusive.

Payroll & Expense Software

Pros:

• Allows businesses to manage employee salaries, benefits, taxes, and other expenses.
• Can be integrated with payroll software for seamless operation.

Cons:

• May be complex due to the integration of payroll features.
• Requires careful management to ensure accurate payroll and tax calculations.

Workforce Management & Expense Software

Pros:

• Helps businesses manage labor costs, scheduling, compliance, and other workforce-related expenses.
• Can be integrated with workforce management software for better efficiency.

Cons:

• May not be necessary for businesses without a large or complex workforce.
• Can be more complex due to the integration of workforce management features.

What Are the Free and Open Source Alternatives to Commercial Expense Management Software?

The free and open-source alternatives to commercial expense management software include GnuCash, HomeBank, Money Manager Ex, Skrooge, Budget Zen, and BudgetGrid.

GnuCash is a personal and small-business financial accounting software. HomeBank is another free software designed to manage personal accounts.

Money Manager Ex is a free, open-source, cross-platform, easy-to-use personal finance software. Skrooge, Budget Zen, and BudgetGrid are also free and open-source alternatives to Expense Management.

How Do Free and Open Source Expense Management Software Compare to Paid Solutions?

Free and open-source expense management software, while often cost-effective and customizable, typically lack the extensive features, regular updates, and vendor support that paid solutions provide.

When comparing these free and open-source solutions to paid ones, several factors come into play. The most obvious difference is the cost. Open-source software is often free but typically isn’t supported by its creators.

On the other hand, paid software often has support from the vendor. Paid solutions often offer more features and integrations. For example, Emburse Certify, a paid solution, offers features like GPS mileage tracking, Google Maps integration, custom reports, advanced travel and entertainment analytics, and multi-level approval workflows.

Paid solutions often have a more user-friendly interface and better user experience. They also tend to have fewer bugs and more regular updates. However, open-source software often allows for greater customization as users can modify the source code to suit their needs.

How Do You Choose the Right Expense Management Software?

You choose the right expense management software by assessing your needs and goals, identifying important features, determining project parameters, selecting a project committee, and comparing your needs to available solutions.

First, you need to assess your expense management needs and goals. This involves determining the needs within your company and the challenges you are trying to overcome by investing in an expense management software.

Next, you should identify and decide on the most important features. These could include reporting capabilities, receipt scanning, credit card monitoring, and more. It’s also important to differentiate between “must-haves” and “nice-to-haves.”

Then, determine the project parameters. This could involve setting a budget, deciding on a timeline for implementation, and identifying the key stakeholders who will be involved in the decision-making process.

After that, select a Project Committee. This committee will be responsible for comparing your needs to available solutions. They should understand your specific requirements, compare different software options, and follow a structured selection process.

Finally, compare your needs to available solutions. This involves researching various expense management software options, evaluating their features, and considering user reviews and ease of use.

How to Assess Your Business Needs Against Expense Management Software Capabilities?

You assess your business needs against expense management software capabilities by evaluating your organization’s specific needs, identifying key software features, checking compatibility with existing systems, considering scalability, reviewing user feedback, and ensuring compliance and security.

To assess your business needs against expense management software capabilities, you should follow these steps:

• Evaluate Your Organization’s Specific Needs: Consider the size of your company, the complexity of your expense reporting processes, and any unique requirements you may have.
• Identify Key Software Features: Determine which features are most important to your business, such as time tracking, expense tracking, automated invoicing, mobile accessibility, customizable reporting, and integration capabilities.
• Check Compatibility with Existing Systems: Ensure the software is compatible with your existing financial systems and workflows for seamless integration.
• Consider Scalability: The software should be able to accommodate your business’s growth, offering scalable options that can adapt to changing needs and requirements.
• Review User Feedback: User reviews can provide insights into the software’s performance and the quality of customer support.
• Ensure Compliance and Security: The software should comply with regulatory requirements and maintain data security standards to protect sensitive information.

What Are the Common Mistakes to Avoid When Choosing Expense Management Systems?

The common mistakes to avoid when choosing expense management systems include not having a clear expense policy, failing to consider inventory visibility, ignoring scalability and future growth, failing to consider automation, not getting input from all stakeholders, and choosing a system that doesn’t integrate with existing systems.

• Lack of Clear Expense Policy: One of the most common mistakes is not having a clear expense policy. This can lead to confusion and ambiguity about what expenses are eligible for reimbursement, how much employees can spend, and what documentation is required.
• Insufficient Inventory Visibility: Failing to consider inventory is a common mistake when choosing a technology expense management solution.
• Ignoring Scalability and Future Growth: Choosing a system that can scale with your business is important. If you choose a system that can’t handle your future growth, you may need to switch systems down the line.
• Overlooking Total Cost of Ownership (TCO): Don’t just consider the system’s upfront cost. Also consider the ongoing costs, such as maintenance and upgrades.
• Neglecting Data Security and Compliance: Data security and compliance are crucial. Ensure the system you choose complies with relevant regulations and has robust security measures.
• Failing to Consider Automation: Manual expense management approaches require a lot of paper and spreadsheets. An automated expense management system simplifies the expense reporting process for employees, supervisors, and accounting teams.
• Not Getting Input From All Stakeholders: It’s important to get input from all stakeholders before choosing a system. This includes not only the finance team but also the employees who will be using the system on a daily basis.
• Choosing a System That Doesn’t Integrate With Existing Systems: The system should seamlessly integrate your existing systems and processes. This will ensure smooth data flow between departments and minimize manual entry errors.

What Are the Pricing Models for Expense Management Software?

The pricing models for Expense Management Software include subscription-based, per-user pricing, freemium, one-time license, tiered pricing, usage-based pricing, and feature-based pricing.

• Subscription-Based: This is a recurring payment model where users pay a set fee monthly or yearly for the software. The fee often includes support, updates, and full access to the software features.
• Per-User Pricing: In this model, the cost of the software is determined by the number of users. The more users an organization has, the higher the cost.
• Freemium: This model offers basic features for free, while advanced features and capabilities are locked behind a paywall. Users can test the software and upgrade to a paid plan if they find it useful.
• One-Time License: This is a traditional model where users pay a one-time fee to own and use the software indefinitely. This model may or may not include future updates and support.
• Tiered Pricing: In this model, different tiers or levels of the software are available at different prices. Each tier offers different features, allowing users to choose a plan that best fits their needs and budget.
• Usage-Based Pricing: In this model, users only pay for what they use. This can be beneficial for companies with fluctuating needs.
• Feature-Based Pricing: In this model, pricing is based on the user’s desired features. More advanced or premium features are priced higher.

How Do the Pricing Models of Different Expense Management Systems Compare?

The pricing models of different expense management systems are compared based on factors such as subscription fees, feature sets, scalability, and the size of the business they cater to. Here’s a table showing a comparison: 

What Are the Potential Hidden Costs or Fees Associated with Expense Management Systems?

The potential hidden costs or fees associated with Expense Management Systems can include increased risk of errors and fraud, inefficient use of employee time, difficulty in tracking expenses, costs related to software updates, system integration, training for employees, ongoing support, and fees for additional features, increased storage, or higher levels of customer support.

One of the most common hidden costs is the increased risk of errors and fraud. Manual processes are more prone to mistakes and poor management, which can lead to incorrect expenses being reported and processed, causing a loss of money.

Another significant hidden cost is the inefficient use of employee time. Due to the time-consuming nature of manual operations, employees may spend too much time on activities like data input, expenditure reconciliation, and error correction. This not only leads to a loss of productivity but also increases operational costs.

Difficulty in tracking expenses is another hidden cost associated with manual expense management. This can lead to a lack of visibility into spending patterns and make it challenging to identify areas of unnecessary expenditure.

Furthermore, there can be hidden costs associated with the implementation and maintenance of the system. These can include costs related to software updates, system integration, employee training, and ongoing support.

Lastly, some systems may have hidden fees that are not included in the initial pricing. These can include fees for additional features, increased storage, or higher levels of customer support.

What Security and Compliance Features Are Important in Expense Management Software?

The important security and compliance features in expense management software include data encryption, secure access controls, two-factor authentication, regular system security updates, compliance with relevant regulations, an automated approval process, and robust security features such as multi-factor authentication and regular security audits.

Security and compliance are paramount in expense management software. A key feature is data encryption, which ensures the confidentiality of financial data and prevents unauthorized access.

Secure access controls are also essential, allowing organizations to manage data access through role-based permissions. Two-factor authentication provides an additional layer of security, requiring users to verify their identity using a second factor.

The software should also be regularly updated to protect against new threats and vulnerabilities. Compliance with relevant financial and data protection regulations is crucial, ensuring that the organization’s expense management practices are legally compliant. An automated approval process can be set up using rules-based workflows, ensuring expenses adhere to company policies.

Lastly, leading expense management solutions should offer robust security features, including multi-factor authentication and regular security audits. These features safeguard the organization’s financial data and ensure transparency, efficiency, and compliance with internal policies and external regulations in the expense management process.

However, the specific security and compliance features required may vary depending on the organization’s specific needs and context, so a thorough assessment is essential before selecting expense management software.

Who Are the Leading Providers of Expense Management Software?

Some of the leading providers of expense management software include Emburse Certify, Expensify, JAMIS Prime ERP, Zoho Expense, and SAP Concur Expense.

Emburse Certify is highly regarded for its quick deployment, support for custom categories and fields, and GPS mileage tracking. It also offers over 40 built-in reports and accounting integrations. 

Expensify is a popular choice, especially for startups and small businesses, due to its free plan. It offers unlimited receipt scanning and next-day ACH reimbursements. However, the free plan has some restrictions, such as standardized categories and no integration with accounting packages.

JAMIS Prime ERP is tailored for government contractors and project-focused businesses. It integrates expense management into a wider array of financial and management tools.

Zoho Expense is known for its convenience of simplified travel booking, faster expense reporting, and effective cost control. It enhances the expense reporting experience and simplifies countless business processes.

SAP Concur Expense is another leading provider that offers comprehensive expense management solutions. It’s particularly known for its user-friendly interface and robust features.

What Are the Best Expense Management Software Solutions in 2024?

The best expense management software solutions in 2024 are Concur Expense, Webexpenses, Expensify, Zoho Expense, and Emburse Certify.

How to Get Started with Expense Management Software?

To get started with Expense Management Software, you need to identify your business’s expense management needs, list the required features, involve key stakeholders, explore possible solutions, choose the right software, implement it, and continuously monitor and improve its effectiveness.

Here’s a guide to help you get started:

1. Identify the Need: Pinpoint the pain points in your current expense management process. Determine your expense management needs. Small businesses have fewer expenses than large corporations, while a mid-sized or larger company needs more extensive functionality, which requires a bigger budget.
2. List the Features: List the specific features you need in the software. Think about how easy it is to use, if it has a mobile app, how customizable it is, how secure it is, what kind of reports it generates, and if it can grow with your company.
3. Get Key People on Board: It’s important to involve key stakeholders in decision-making. This includes the finance team and the employees who will be using the software.
4. Explore Solutions: Research and explore possible solutions. Many expense management software options are available, such as Emburse, Expensify, Zoho Expense, and others. Attend webinars, download apps for a trial, and invite some initial users.
5. Choose the Right Software: Choose the software that best matches your business needs. Consider factors such as cost, ease of use, integration with existing systems, and customer support.
6. Implement the Software: Start the implementation process once you’ve chosen a software. This may involve setting up the software, integrating it with your existing systems, and training your employees.
7. Monitor and Improve: After implementation, monitor the software’s effectiveness and make necessary adjustments. This could involve tweaking your expense policies, offering additional training, or switching to a different software if necessary.