Managing employee expenses can be a difficult task for small business owners. When done manually, it's often time-consuming and prone to errors. However, the right tools can make tracking and managing employee spending easy — and help your business grow. 📈
If you’re ready to get clear on cash flow and help your team stay on budget, we’ve got you covered. 🙌
In this article, we’ll discuss:
Let's dive in.
What is employee expense management?
The process of employee expense management involves tracking, categorizing, and reimbursing employee expenses. This includes recording all relevant information about an employee's purchases — like receipts, the purpose of the purchase, and any applicable taxes or other deductions. 🧾
Employee expense management covers a wide range of tasks, such as:
Setting up a clear and comprehensive employee expense policy
Implementing a systematic process for submitting expense reports
Reviewing and verifying the submitted expense reports for accuracy and policy compliance
Approving and reimbursing employee expenses on a timely basis
Analyzing employee spending trends to identify cost-saving opportunities
Integrating expense management software to streamline, automate, and enhance the efficiency of these tasks
By carefully tracking and managing employee expenses, you can maintain control over cash outflows and gain a deep understanding of spending. As a result, you’ll be able to make better-informed decisions that can help your business stay competitive and profitable. 📊📈
The importance of employee expense management for small businesses
If you're a small business owner, expense management might seem unnecessary — especially if you only have a few employees. However, even small teams can generate significant business expenses, and without proper tracking and management, these can spiral out of control. 😬
By taking the time to implement an effective employee expense management process, you can make sure your team is staying within budget while still getting the job done. This can help you reduce expenses and improve cash flow, which will ultimately benefit your bottom line.
Remember: good expense management isn't just about tracking dollars and cents, it's about gaining valuable insights into spending habits, identifying potential areas for savings, and staying on top of your business's financial health. 👍
Does my business need expense management software?
Employee expense management software is a tool that automates the process of tracking, managing, and reimbursing employee expenses. It can help you save time, improve compliance with financial regulations, and make sure employees aren’t overspending.
Another benefit of expense management software is that it can provide a digital audit trail for business transactions. ✅ This boosts the transparency of your company's expenses, protecting your business from fraud and other financial risks.
Here are some signs that it might be time for your small business to invest in expense management software:
Your current expense reporting process relies on spreadsheets and manual data entry 📑
You don’t have a clear approval process for spending requests (so they get lost in your inbox) 😬
You want more visibility into your team's spending habits 🔎
You feel overwhelmed with the amount of time it takes to manage expenses ⏰
But what if you don’t want to add another software solution to your tech stack? 🤔You might be able to avoid the complexities (and extra cost) of expense management software with an online banking and money management platform like Relay.
Relay is an all-in-one platform that helps you get crystal clear on cash flow, from 20 free, individual business checking accounts to expense management features like debit card controls.
💡Want to learn more? Jump to expense management software alternatives
Different types of employee expense management software
Some expense management tools provide a comprehensive solution for everything from approving expenses to automating data entry and generating detailed reports. 📊 Others specialize in a particular area, such as tracking receipts or reimbursing travel. 🌎
Ultimately, the right tool for you will depend on your business’s unique needs and goals. To help you make the best choice, here’s a breakdown of the four main types of expense management software:
✈️ Travel and expense (T&E) management software: These tools help you manage employee expenses related to business travel, including airfare, accommodation, and meals. They often include features for booking travel and tracking reimbursements.
💳 Corporate card management software: This type of software helps you manage (and sometimes issue) corporate credit cards. It allows you to set spending limits, track usage, and more easily reconcile bank statements.
📊 Expense analytics software: These tools help businesses analyze expense data, identify trends, produce reports, and make informed decisions to control costs.
💻 Integrated expense management software: This type of software integrates with a company's existing financial system, such as ERP or accounting software. It helps automate processes like approvals, expense reimbursements, and reporting.
5 expense management tools for business owners
Ready to find the right expense management solution for your small business? These five tools can help you save time, reduce manual labor, and get crystal clear on employee spending trends. 📊🔮
Certify is a cloud-based software best known for its travel expense management features. With online booking capabilities, automated expense reports, and streamlined employee reimbursements, Certify helps finance teams save hours of time on expense management.
However, small businesses that don't engage in frequent corporate travel may not have a need for Certify’s specialized travel-related capabilities.
✅ Receipt scanning from your mobile device
✅ Google Maps integration for accurate mileage tracking and reimbursement
✅ Affordable pricing options for small businesses with less than 25 employees
✅ Multiple user roles for easy collaboration with your accountant
❌ May be excessive for businesses with minimal travel expenses
❌ QuickBooks is the only integration available on the small business plan
Spendesk is an end-to-end spend management solution that simplifies payment tracking and processing. From issuing pre-paid virtual cards 💳 to defining approval workflows, this platform can help you handle almost every aspect of employee expense management. 🗂
While beneficial for larger companies, however, some of Spendesk’s features could be overwhelming or unnecessary for smaller teams.
✅ Instantly issue pre-paid virtual cards for one-time and recurring expenses
✅ Mobile app allows employees to instantly claim reimbursement for business expenses
✅ Automate receipt capture with OCR technology
✅ Integrations with Netsuite, Xero, and Slack
❌ Limited integrations with other accounting and money management platforms
❌ Advanced features might not be necessary for smaller teams
Expensify is an employee expense management platform that helps businesses manage, track, and report their expenses. It includes features like real-time expense tracking and alerts, automated reporting, and more.
Expensify’s features become even more powerful when using the Expensify corporate card. If you decide not to use their card solution, however, the platform can be a little pricey for the features.
✅ Unlimited, one-click receipt tracking
✅ Automatically reconcile corporate card transactions
✅ Dozens of travel, tax, accounting, and HR integrations
✅ Free plan option when you sign up for the Expensify corporate card
❌ Less affordable than other expense management solutions (if you don’t use the Expensify corporate card)
4. SAP Concur
SAP Concur is an employee expense management system that helps businesses manage travel expenses, prevent spending policy violations, and more.
However, SAP Concur can be an expensive solution and might not be the best fit for businesses with minimal expenses. Additionally, its setup process can be time-consuming and may require additional resources to manage effectively.
✅ Highly customizable for businesses with unique needs
✅ Extensive integrations with compliance, IT, finance, and travel-related apps
❌ Less affordable for small businesses
❌ Intensive setup and onboarding process
5. Zoho Expense
Zoho Expense is an intuitive, cloud-based employee expense management solution that helps businesses automate their entire expense process. Plus, its integration with other Zoho apps makes it easy to manage business finances from one platform.
However, unlike the other solutions, Zoho Expense might not be complex enough for some businesses. If your business needs highly customized features, Zoho Expense isn’t the best option.
✅ Automated credit and corporate card reconciliation
✅ AI-driven fraud detection and other compliance features
✅ In-depth travel and expense management analytics
✅ Seamless integration with Zoho apps
❌ Limited receipt scanning on lower-tier plans
❌ Might not be ideal if you don’t use Zoho for other business operations
Alternatives to expense management software
Expense management software isn’t a must-have for every business. Ultimately, it's crucial to remember that the goal of implementing any new tool or software is to streamline operations, not complicate them, and sometimes, simplicity is the most effective way forward.💡💻
For example, a small graphic design studio with a team of five people may find that expense management systems are too complex. Their spending only consists of software subscriptions, occasional equipment purchases, and minor office supplies.
These expenses can easily be tracked and managed using their existing accounting software. An online business banking platform like Relay (that’s us! 👋) can also help them set limits on team spending—without the need for separate expense management software.
So how do you decide if you can go without expense management software? Let’s take a closer look at two alternatives for small businesses.
🧾 Manage employee expenses with accounting software
If you use accounting software like QuickBooks Online, you might be able to handle expenses with your existing subscription. This can be a great solution for businesses that are just starting out or have very straightforward expenses. 🙌
Most accounting systems offer basic expense management features like:
Automated expense categorization
Receipt scanning via a mobile app
Create and manage expense reports
Generate detailed spending reports
Employee expense claims and reimbursement
However, if you find your business needs more advanced expense management features like approval workflows and expense policy compliance monitoring, you might need to upgrade to a separate solution.
🏦 Manage team spending with online business banking
Some online business banking platforms also help business owners manage spending. This can majorly simplify your processes—instead of juggling multiple software solutions, you might be able to rely on one or two platforms for all your business’s money management needs.
For example, Relay is an online business banking and money management platform with employee expense management features like:
✅ Instantly issue 50 virtual or physical debit cards, which allows you to organize spending based on expense categories, projects, and team budgets.
✅ Set custom spending limits and rules for each card, giving you total control over cash outflows (plus, you instantly freeze cards at any time).
✅ Enriched, automatically categorized transaction data, so you can gain a deep understanding of where your team is spending money — and speed up bookkeeping.
✅ Integrations with QuickBooks Online and Xero, so you can make sure every transaction is accurately categorized and reconciled at the end of each month.
Ultimately, an online business banking platform is one of the best ways to access expense management features without investing in a new software solution. 🏆
How to choose the right employee expense management tool
The best expense management software for your business depends on the features you need and your budget. For basic expense management capabilities, your accounting software or online business banking platform might be enough.
On the other hand, if you have more complex requirements—or need to track expenses for a large team—then investing in an enterprise-level solution like SAP Concur might be wise.
Here are a few questions to ask yourself as you make your decision:
Does my business need to track expenses for a large team?
Do I need features like multi-level approval workflows and policy compliance monitoring?
Is scalability important, and if so, does the software offer options for businesses of different sizes?
Does the solution integrate with other tools I already use, such as accounting software?
Is the software easy to use for both administrators and employees?
What is the cost associated with implementation and ongoing support?
Answering these questions can help you identify which employee expense management tool is right for your business. Once you’ve made a decision, it’s time to move forward with implementing your new system—and start saving time and money on your expense management process. 💰
Streamline your expense management process
Effective employee expense management can help your business manage costs and achieve new levels of growth. Whether you choose a full-fledged expense management solution or stick with your accounting software, the key is to find a platform that helps you get clear on cash flow.
Ready to get crystal clear on your business’s expenses? A robust business banking solution like Relay can help. From real-time visibility into team spending to multiple free business checking accounts, Relay simplifies cash flow management—so you can spend more time growing your business. 🚀 Sign up here to get started today.