The Ultimate Guide to Spend and Expense Management

Post sponsored by BILL

Does your accounting department struggle to keep your company’s spending and expenses in check? Most likely, it does—it’s a common challenge for small and midsize businesses (SMBs). Chasing down employees for their expense reports and receipts, reconciling corporate credit cards, managing your budget, and closing the books waste a lot of time—time your financial team can put to better use.

While your company may already have automated its accounts payable (AP) and accounts receivable (AR) systems, spend and expense management is another story. Too often, it is overlooked. Business owners think it’s handled, but it is frequently not, like the financial disaster that happened to Macy’s last fall.

If your financial team doesn’t have the right tools for spend and expense management, it can cost your company time and money. Optimizing the expense process improves visibility, reduces headaches, and helps businesses scale more smoothly—especially if you’re growing when hiring and expenses start piling up. A smarter approach to spend management can make all the difference.

The bottom line is that handling your corporate card spend and expenses is just as important as managing the rest of your financial operations.

Defining Spend and Expense Management

Spend and expense management is all about controlling your budgets, managing business credit, allocating resources, and tracking spending (except payroll) across all parts of your business. It encompasses charges on company cards (by you or your employees), employee reimbursements, business travel expenses, and purchases of equipment, software, or even basic office supplies.

There are various tools your accounting team can use to help them with spend and expense management, including:

• Corporate cards
• Expense management software
• Business credit
• Bank account software
• Accounting software
• Accounts payable and accounts receivable software
• Budgeting tools

However, even armed with these tools, spend and expense management can be challenging for your accounting team. Some of the issues they face include:

Visibility: If your employees use their personal credit cards for business travel or other purchases, your accounting team cannot quickly see how much the company spends and must wait until the month-end close to know their spending. Even if your team uses corporate cards, keeping track of multiple accounts can be challenging, especially if they’re not integrated with your accounting software.

Employee compliance: Employees commonly lose or misplace receipts, miscategorize purchases, and exceed spending limits. In some instances, employees deliberately try to defraud the company. One way to maintain compliance is to use software that gives you control over your budget limits.

Approval processes: Some companies implement pre-approval requirements for employee spending, which can take time and interfere with employee responsibilities. Having mobile access to approve or deny employee purchases can solve this issue.

Paper problems: There’s a reason more and more businesses don’t want to deal with paper, whether it’s printed receipts, invoices, or credit card statements. Paper products are easy to lose. Plus, even when employees have paper proof of their expenditures, it’s time-consuming for your accounting staff to wade through them.

Improving Your Spend and Expense Management Processes

The sad truth is most SMBs don’t have an efficient expense management system and still rely on manually entering financial data into spreadsheets, which is a tedious waste of time and prone to human error.

Instead of relying on such an outdated process, you can automate the spend and expense management process. A great way to do that is via BILL Spend and Expense. It offers these five primary benefits:

1. Improved Cost Efficiency

Implementing a new system is more cost-effective than working with an outdated one. BILL Spend and Expense, a free software, allows you to:

• Automatically import data, decreasing errors from manual inputting.
• Help eliminate traditional expense reports.
• Save you from paying for expense management subscription costs.

2. Increased Visibility

You and your accounting team can see where and when money is being spent in real time—all in one place.

3. Reduced Risk of Fraud

BILL Spend and Expense allows you to control purchases so your employees can only spend pre-approved amounts of money on approved purchases. Using the virtual cards provided by the BILL program reduces concerns about physical credit cards falling into the wrong hands, preventing non-compliant spend

4. Time Savings and Automated Spend Controls

Traditional spend and expense management systems typically aren’t scalable, which hinders growing companies. Businesses can manage and centralize spend controls and expense management in one integrated BILL Spend and Expense platform, which saves time and can be easily synced with their accounting software of choice. Plus, it’s all mobile-enabled, so you and your team can access the software, submit expenses, and approve it from anywhere.

Considerations When Creating Spend and Expense Management Processes

When you’re ready to implement a spend and expense management process, here are some components to consider:

Approvals and spend controls: Approval processes vary from company to company. Some businesses impose limits on some employees and not on others. It can get messy.

Spend and expense management software can simplify the process by automating approvals for certain types of spending (such as team lunches) while also setting the max limit that can be spent, who can spend on what merchants, and imposing restrictions on items that can or cannot be purchased.

Travel and expense policies: It’s up to you to develop your own travel policies. Some companies establish a limit above which travel expenses need to be approved, such as $2,500. Consult with relevant staff (like your sales team) when starting the process and remember to update the policy as your business grows. BILL Spend and Expense can help enforce these policies through spend controls and approval workflows.

Expense reporting: Everyone hates expense reports. Employees routinely forget to get a receipt or lose the ones they have. They often procrastinate filling out their reports (heck, I once waited six months to file mine). Then, accounting needs to collect and reconcile the reports. With the right expense management software, employees can keep track of expenses with ease. Smart software like BILL Spend and Expense can also help get rid of the need for employees to do monthly expense reports.

Software: Look for software that can help increase company efficiency and free your staff to concentrate on other strategic work, allowing you to see, at a glance, a real-time financial snapshot of your business. More importantly, find software that can work well with your tech stack and grow with your company. BILL Spend and Expense’s innovative software automates the process and offers budget controls, photo receipts, automatic coding of purchases, one-click approvals, and mobile apps.

Cards: Credit card usage can be quite convoluted. Some companies let employees use their personal cards and get reimbursed, which is not recommended. It can lead to delays, doesn’t give an accurate financial picture, and can cause headaches for the accounting team.

Using corporate cards is a better solution, offering several advantages:

• Keeping business spending separate from personal expenditures makes reconciling accounts every month and filing annual taxes easier.
• Saving time and resources (something SMBs never have enough of).
• Creating a credit line for business purchases helps you establish a strong credit history and increase your credit score. You also earn perks and rewards, such as free travel or cash back.

With BILL, you’ve got an even better solution—the BILL Divvy Card powered by Visa*. The BILL Divvy card has no annual fees and features seamless automatic integration with BILL Spend and Expense software. It also offers flexible rewards, access to virtual cards, giving you greater control of online purchases and subscriptions, and set budgets so you can control spending.

Amber Tialino, BILL’s SVP and General Manager, Spend and Expense, explains, “By using a company card that ties directly to software, businesses can eliminate cumbersome manual processes and save time and money. The BILL Divvy Card helps eliminate monthly expense reports and tedious expense reporting for businesses looking for a more controlled way to spend. Unlike other traditional business credit cards, the BILL Divvy card provides SMBs with company cards, spend controls, flexible rewards, and expense management software all rolled into one—giving businesses the streamlined efficiency they need to grow and thrive.”

Here are the key benefits for BILL Divvy card:

• Business credit: Access to fast and flexible credit for businesses of all sizes with no annual fees.
• Mobile app: Gives SMBs the tools needed to spend smarter wherever they are, with easy receipt capture and AI receipt matching and validation capabilities.
• Reimbursements: Allows SMBs to track out-of-pocket expenses and manage reimbursements in one place.
• Competitive rewards: Businesses can earn competitive rewards, including cash back, gift cards, and travel benefits.

The Benefits of Pairing Your Business Card with Expense and Spend Management Software

Integrating a corporate card with your expense and spend management software has numerous advantages. When a charge is made on the card, it is automatically reported to the software in real time, making it visible to management and helping prevent unauthorized spending. Proactive spend controls can also help customize spending to your unique business needs.

The BILL Divvy card gives you more control over employee spending. Chris Wadsworth, COO at Cal Wadsworth Construction, says, “Being able to instantly set someone’s limit on their BILL card is freaking awesome. We can give a card to any employee with $200 bucks on it, and if they go rogue, it's not a big risk.”

In addition, each expense is tracked as it’s charged, prompting the user to attach a receipt, eliminating the need for traditional expense reports. And since all charges occur in one program that integrates with the most popular accounting software systems, your accounting team can close the books much faster. You could even move from monthly to biweekly or weekly closes.

So, if you, like many SMB owners, have not yet automated your spend and expense management, now is the time to do it. You’ll gain real-time insight into your company’s spending. Using a system like BILL Spend and Expense, which syncs to your accounting software, saves time, controls spend, freeing your staff to focus on vital tasks and allowing you and your financial team to better forecast your company’s finances.

*The BILL Divvy Card is issued by Cross River Bank, Member FDIC and is not a deposit product.

About the Author

Rieva Lesonsky is the owner of SmallBusinessCurrents.com and has been covering small businesses and entrepreneurship for over 30 years. Get more insights about business trends by signing up for her free Currents newsletter.