How to choose and implement an expenses management system

The way we’re able to manage employee expenses is changing.

Companies are no longer reliant on the old paper-based approach that create an inherently slow, costly, and ineffective process.

With real-time data and cloud-based management, finance teams now have access to smart tools to effectively process, manage, and control employee expenses.

By moving to a cloud-based expense management solution, a company can reduce costs, improve efficiency, and reduce compliance risks. The switch from a traditional approach can save up to 30% in T&E processing costs.

That’s why so many businesses are now switching to online expense management. Making the switch is easier than you think. This guide provides simple, clear, and informed advice to making the switch to a digital management approach. We will focus on two key areas:

  • How to choose the right system
  • How to implement digital management

Part 1: Choosing the right expense management software

The main challenge you face when searching for the right solution is that each and every business is different. Companies have different structures, processes, and setups which will create a specific set of expense management requirements.

So the first step when choosing a system is to identify what the general operational requirements of your company are. How do you want to manage your expenses and which features are required to achieve that?

Requirements Checklist

Here’s a checklist to help you focus on the areas of a business which will impact on the requirements of a digital expense solution:

  • How many claimants and approvers do you have?
  • What kind of employee expenses do you need to handle?
  • How many office locations do you have?
  • Do you want a finance team to centrally manage and monitor expenses?
  • Does your organization operate across different national/regional jurisdictions?
  • Do you need to manage and reimburse different currencies?
  • Do you need to integrate expense management with existing accounting software?
  • Do you want users to manage expenses and create expense reports remotely?
  • How flexible is your workforce?
  • Do you have offices that manage petty cash systems?
  • Do you recharge expense items to clients or projects?
  • Do you need to reclaim overseas value-added taxes?
  • Does your business use corporate credit cards?
  • What are your internal/external compliance requirements?
  • How do you want to access and report expense management information?
  • How do you want to store your expense data?

It’s by looking at each of these areas that you can start to build up a better understanding of what kind of expense management solution is going to be best for your business. The switch to a cloud-based solution will open up ways of working which are not possible with a traditional approach.

It’s important to not only assess your current needs but also to assess the benefits on offer and your future challenges. One of the most common problems with expense management systems is the failure to handle the changing demands of a growing business.

Features Checklist

There is a range of cloud-based expense management solutions to choose from but most systems will offer a similar set of core features to process, manage, and control employee expenses.

Some of the common features include:

  • Management of expenses via an expenses app
  • OCR scanning of paper receipts
  • Record road travel mileage/kms
  • Policy alerts/notifications reminders
  • Automated handling of imported credit card data
  • Central management and real-time monitoring of expenses
  • Multi-entity handling across different nations/jurisdictions
  • Automated compliance checks, notifications, and alerts
  • Multiple receipt format handling - paper, email, text, PDF etc
  • Integrated petty cash management system
  • Easy integration with existing accounting software
  • Integrated reporting tools for compliance and performance monitoring
  • Customization - system configures to specific needs of the business

By cross-referencing your organization’s requirements against the available features, you can get a feel for which system is going to be best aligned to your needs. While this can help guide the decision-making process, it’s wise not to make it a deciding factor.

The advantages of any specific feature have to be weighed against the general reliability, usability, and reliability of the software. Additional features are of limited value unless the system handles the basic tasks of managing and processing expenses.

Here are some additional tips on choosing the right provider:

Hands-on Experience

An effective expenses management system is a business tool that will be used on a day-to-day basis throughout your organization. It’s vital, therefore, to get as much first-hand experience as possible prior to making any commitment.

The best way of doing this is to see how the software works for yourself. Demonstrations can be arranged to see the software being used - video calls and screen sharing allow this to be done virtually.

Customer Support

Having reliable customer support and training is an essential part of any effective expense management system. A good provider will provide everything needed to smooth the transition to a new system.

You need to be confident that the provider can also provide your organization with reliable, fast, and easily accessible on-going support to help handle any issues that may arise.

A reliable provider should provide case studies to highlight the customer support experiences of existing clients. Online review sites are also a good way to get a feel for the standards of customer support.

You also need to know how you want to handle customer support inquiries, whether you want users to directly contact the third-party provider or if you want these inquiries to be handled via your finance team.

Employee Training

An effective digital solution will require minimal training with a focus on simplicity and ease of use. But the task of communicating the requirements of a new system needs to be considered.

You know your users better than any supplier - what method of training would work best for your organization? Typically the options available are face-to-face training, train the trainer, online webinars, training videos, user guides, support sites, and forums.

Make sure your supplier knows what training is required and find out what additional support, resources, and backup material they can provide to best meet your needs.

Future-Proofing

Technology moves quickly and an effective expense management system needs to move with it. It’s important, therefore, to make sure the provider has a roadmap and a commitment to continually enhance and update the product.

A provider should always be looking ahead, making sure the best use of available technology, while maintaining and prioritizing the core robustness and reliability of the service.

Mobile Working

The real benefits of a cloud-based solution come from the mobility it unlocks. A system should provide simple and effective ways for employees to manage their expenses from wherever they are.

A smartphone app will allow users to instantly convert paper receipts into a digital format, allowing digital reports to be instantly created without the need to return to an office. In doing so, it creates a paperless expense management process and a fast, simple, and secure process.

You need to look at how you want to implement this, whether employees can use their own smartphones to carry out this or you supply them with business-specific devices. You also need to know that the app itself is reliable and simple to use.

Compliance Tools

The ability to effectively monitor and manage employee compliance is a powerful feature offered by some EMS software. Systems can be configured to provide employees with the point of entry reminders to prompt them to confirm compliance with laws such as tax legislation and the Anti-Bribery Act.

Petty Cash Control

An effective system will allow the management and monitoring of any petty cash funds that are operating within an organization. By integrating these into the main expenses system, finance teams have the power to keep costs under control and to maintain effective compliance.

Flexible Advantage

Agility and flexibility are important features for any management solution that operates in such a fast-paced and rapidly-changing business world. An expense management provider needs to be able to maintain a system and support that can respond to your changing needs.

This is a particular requirement for business growth and the changing expense management challenges as an organization expands in scale and complexity. Your provider needs to be able and willing to support these changes. Find out if there are any cost implications associated with this.

Summary

As you work through these points and decide on the features that are important to your organization, you should be able to develop some selection criteria against which
you can evaluate the potential of product and service offerings in the marketplace.

Part 2: Implementing expense management software

Now you have selected a provider, there are a number of elements that you need to be aware of when planning implementation. There are two main changes that need to be effectively managed:

Process - the mechanics of implementing and configuring a new system
Communications - achieving ‘buy-in’ amongst employees for the new process.

By making sure both of these areas are covered, the move to a cloud-based system should be a fast and smooth transition with minimal organizational disruption. The bottom line is that the system works, employees know how to use it and understand the benefits.

Process Implementation

A good provider will handle most of the ‘heavy lifting’ that’s required to implement a new system. This means configuring all of the core setups to make sure it matches your organization’s structure and financial process.

Many service providers will request system setup data from the customer in a spreadsheet format. You will need to provide details such as ledger codes, mileage/kilometre rates, and specific categories. This is used to configure the system to your business requirements.

An effective system should also provide the customizability to allow finance managers to easily adjust and adapt settings for themselves, allowing system performance to be honed and improved over time.

System Communication

Any kind of change within a business tends to be met with some resistance and the less informed employees are, the more this is liable to be a problem. So before a new expense management system is implemented, users need to be kept fully informed.

You need to communicate the benefits delivered by making the change and to provide them will all the help, training, and support they require to allay any fears. There are some particular methods that can be used to achieve this:

Support Network

Once the initial setup is completed, you need to be sure that you have all the expertise, knowledge, and resources required to support first-time users. Company administrators should be ready to help and advise; employees should have access to guides, how-to videos, and support materials. Internal communication systems, whether an email list or forum, can be an effective way for users to share knowledge, ask questions, and provide tips on using the system.

Pilot Groups

A pilot group is an effective way to test out a system and identify potential issues before a company-wide rollout. By trialing it with a small subset of employees, you can gain invaluable feedback - technical issues and training requirements.

It also provides you with a set of employees who can act as system ‘champions’. Their experiences and knowledge can be used to help train and support colleagues as the system is implemented across the company.

Roll Out

Once setup has been completed, a date can be set for the system to ‘go live’. Users’ details are added to the system, they will receive a user login and password by email and are fully briefed on how to start using the software.

Systems will often have additional features and settings that can be enabled or disabled. When you’re rolling out a system, it’s often good to initially focus on just the core functionality, with additional features being enabled once things are running smoothly.

Expense Management System – What next?

Once you’ve got your new expense management software solution in place, what next?

If you’re moving from a paper-based approach, it may take some time to understand the full benefits that come from cloud-based management. It allows for a fresh approach to expense management, harnessing all the advantages of real-time data and automated processes.

Here are some ways to set-up a stable and reliable system:

Policy Enforcement

A major advantage of cloud-based management is the ability to automatically check expense reports for compliance. Finance teams are able to set levels for specific expense categories - if a submitted claim breaches this level, the system is able to send out an alert or notification.

It allows an expense policy to be integrated into the everyday workflow in a way that isn’t possible with a traditional paper-based approach. By making the most of this feature, it can help to boost compliance and reduce the risks of fraud.

Paperless Process

The use of a smartphone app to scan and digitize paper receipts allows a finance team to benefit from a fully paperless process. To make the most of this, a workforce needs to be constantly supported and encouraged to use the digital approach.

There can often be resistance to the change from employees who are so used to the traditional method of attaching a bundle of paper receipts to a report. Good communications and training can help increase the use of the smartphone app.

The Champion’s Role

One approach that many companies use is to appoint an employee to acts as an advocate or ‘champion’ for the system. The person is given the responsibility for promoting the benefits of the system and helping to handle any support or training that’s required.

It provides a clear point-of-contact for anyone and creates a person within the organization who is constantly looking to share and promote best practices.

Changing Workplace Culture

The most dramatic change that’s delivered by a cloud-based management system is a shift in the workplace attitude towards employee expenses. With a simple, user-friendly process and much better policy enforcement, the old toxic attitudes to expenses can start to be changed.

Rather than expenses being a drudge, a breeding ground for fraudulent behavior, they become a seamless part of business life. Expense management is able to become what it always should have been - an efficient and equitable way to reimburse legitimate costs.

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