This article contains general information and is not intended to provide information that is specific to American Express, or its products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
Modern expense management (EM) tools could provide a real-time overview of what a business is spending, potentially helping to enable leaders to track and manage cash flow, make better, data-informed decisions, and improve supplier relationships. They may also help reduce fraudulent claims, as well as help facilitate prompt and reliable reimbursement, which could build team morale.
Faster and more intuitive than traditional systems based on cumbersome paper and error-prone spreadsheets, the new generation of expense management tools have benefited from the lightning evolution of technology since the remote work revolution. But that means a tool that might have felt transformational in 2019 could seem completely out of date now.
Changing your expense management tool can be a big decision. Here are 10 key indicators that it might be time to consider a new option.
1. Your Tool Is Not Mobile-Ready
With workers increasingly prioritizing smartphones over laptops, allowing your team to capture receipts and track expenses on the go doesn’t just make life easier for them — it means your company could receive expenditure data more quickly, if not immediately. By requiring an actual photo of an expense rather than a digitally alterable PDF and reducing the time lag in which bad actors could alter receipts, mobile-first reporting might help reduce fraud.
Automated options such as smart scanning could also help streamline the process and potentially reduce the risk of accidental or deliberate typos, such as an additional zero.
2. Your Tool Lacks Mileage Tracking
Expense management tools with mileage tracking options may help ensure that your business pays only for miles traveled on business — this may prove particularly important when company vehicles are also used for personal travel.
Taking the guesswork out of mileage tracking may help reduce the risk of both intentional fraud and innocent overstatement, while streamlining the claims and approvals procedure. Consider an option that’s fully compliant with all relevant local, national, and international privacy laws.
3. Your Tool Has Security Issues
Security in expense management tools requires a delicate balancing act. A useful tool may be sufficiently secure to protect business-critical and legally sensitive data, including but not limited to employee personal data, company credit card details, and financial information for your company and your suppliers alike. Yet when the security burden is overly onerous, team members may underuse the tool or resort to less secure practices, such as storing their password on their device.
An expense management system that performs well for a company with 10 employees and one layer of expense approval may be inadequate for a business with 500 or more employees and multiple layers of approvals.
Working closely with digital security teams could help facilitate integrations with your broader tech stack that are both secure and compliant.
4. Your Tool Doesn't Offer Virtual Cards
Virtual cards are digital, online credit cards, created for a specific purpose with customizable spending controls. They eliminate the need for manual reconciliation, via automated reporting that lets you track your expenses in real time. Single-use virtual cards could help cut the risk of online fraud — even if intercepted by cyber-criminals, the number is only valid for the purchase that has already been made.
5. Your Tool Is Not Intuitive
Modern expense management tools can help make both filing expenses and approving claims simple and intuitive. Time spent on calls to the tool’s tech support — or even your own in-house team — is time that could be used for more productive work. Further, when tools are not intuitive, employees and managers may delay both filing and approving expenses, reducing visibility for leaders and delaying reimbursement for team members.
6. Your Tool Does Not Sync Well
Today's expense management tools are designed to sync effortlessly with team members’ cards, recording and categorizing transactions and matching them to receipts. Slow synchronization, unreliable categorization, or basic errors — where the software duplicates transactions, for example — could result in lost productivity, inaccurate data, and even financial losses.
7. Your Tool Is Poorly Integrated
Not all expense management tools pair well with the many different types of finance, travel, human resources, and enterprise resource management software on the market. If your finance teams are finding themselves manually exporting data from your expense management tool before they can gain insights from your systems, it might be time to look for a plug-and-play alternative that works efficiently, securely, and compliantly with your existing tech stack.
8. Your Tool Can’t Scale With Your Business
An expense management system that performs well for a company with 10 employees and one layer of expense approval may be inadequate for a business with 500 or more employees and multiple layers of approvals. Pricing needs may also change: per-seat models that seem cost-effective for a team of three or four might seem much less affordable for a scaling business. Once a business involves international travel, currency conversion may pose a concern, too.
9. Your Tool Doesn’t Integrate Travel Spending
The days of paper receipts should be a thing of the past with contemporary expense management systems. Integrating hotel booking may let your company enjoy the benefits of corporate travel discounts while potentially helping to reduce the risk of error, fraud, or inadvertent overspend. Some tools could also coordinate directly and securely with popular ride-sharing apps, helping to make taxi receipt fraud a rarity.
10. Your Tool Fails Under Pressure
Is your EM technology leaving your team staring at a spinning loading circle or endlessly refreshing their dashboards? Consider a tool that’s designed for your company’s size that may minimize lag and downtime.
A regular review of your expense policy — and related technology — could help ensure your company remains compliant and in sync with contemporary working practices. Modern expense management tools could help set up your company for success, potentially ensuring timely and efficient reporting.
Photo: Getty Images
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