A start up business needs a lot of attention to ensure that it can grow and become profitable. With limited cash flow, costs should be managed efficiently. From expenses on sales and marketing strategies to operation expenditures, you need to be on top of how your start up spends money. Accurate reporting and data analysis are important elements to make your brand successful. Expense management software offers the business solutions you need.
Expense Management Software
Before looking at features and functions that the software can offer, it is important that you first understand what it is. What is it for? What can it deliver?
According to Intacct, an expense management system provider, it is the software that allows you to manage the costs incurred by your business. These include expenses spent on travel and entertainment as well as other miscellaneous activities needed to run your business. While there are other methods available such as manual tracking with spreadsheets, Expense management tool makes the entire process simpler and easier to complete. Below are some of the features that most automated systems have,
- Receipt Tracking – With this feature, you no longer need to hold on to those receipts that seem to start fading the minute you fold it up and put it in your wallet. You can now say goodbye to stressing about whether you accidentally threw it away. Business expense management software turns the process that once involved being elbow deep in receipts virtually paperless. You or your employees can take a picture or scan the receipt and upload it straight into the software. This can be done almost any location where receipts are received like restaurants or coffee shops. So, even if you or your sales reps are busy entertaining clients, those valuable receipts are kept safe and sound and ready to be attached to expense reports.
- Payment Integration – The best expense management tools often have this feature. It eliminates the need to check credit card charges against the receipts. It lets you import data from your credit card or bank accounts and feed it into the software.
- Itemized Expense Report Creation – This feature cuts the time of filing an expense report into almost half. With the software creating the itemized report, there is no more need to manually enter data into confusing spreadsheets. It uses the information from linked accounts and receipts uploaded to create the report. This reduces the risks of your documentation not matching the claims you file.
- Mobile Friendly Software – You don’t need to get special equipment for your staff to be able to use most of the travel and expense management software They can access the system on their own phones so they can update their reports or upload receipt from practically anywhere.
Check out reviews of expense management tools available online to see how businesses enjoy the features mentioned above
Expense Management Challenges of Start-up Companies
With such impressive features, it is obviously something that any SMB or start-up company would benefit from. However, if you’re asking yourself what challenges these can answer, then below are some of the expense management pitfalls that an automated system can solve.
- Slow Approval Process – Whether you have 50 or 10 employees, running a start up involves a variety of tasks. From marketing your brand to billing customers, you certainly will have a lot on your plate. One of the tasks that often get overlooked is expense management. From office supplies to business trip necessities, requests often need to be approved before anything can be processed. Sadly with such a dynamic work environment, which is often the case for start-ups, delays in approving requests are almost inevitable.
What do these delays actually mean for your operations? It could mean anything from delayed business proposals due to lack of resources to low employee morale because of long reimbursement timeframes.
- Insufficient Data Collected – As a start-up company, one of your main goals is to drive profitability. Cutting costs is an acceptable business strategy to achieve this goal. But before you make changes you want to make sure that you’re making the right ones. WIPFLi, a national accounting and consulting firm based in Wisconsin, listed lack of visibility on how the company spends money as one of the challenges in expense management.
Are your travel expenses giving you sufficient ROI? Are your marketing strategies producing quality leads for your sales force? Are you getting the best prices from your current suppliers? These are just some of the questions that you need to ask yourself to know if you’re investing efficiently.
So, where do you get the right answers? Market research is of course a handy tool, but you have a resource that’s right on your fingertips, your expense reports. However, if it is not managed properly, you don’t get the right data to make the right decisions. And this for a start-up company can spell the difference between becoming successful and going under.
- Lack of Efficient Processes – Finextra, an online source for financial technology, identifies the lack of an efficient process as one of the challenges in expense management. With a start-up company, you may need to go through a few processes and tools before you find ones that will work with your business. In addition, these should also be ones that you and your employees can effectively use.
Some of the processes and tools that you may be using may not be the best fit for your company. This will certainly have an impact on your business as the lengthy and confusing steps can cause inaccurate data or delays.
Boosting Your Start-Up
The challenges that start-up companies experience with managing their expenses can be addressed by the features expense management software delivers. By transitioning to an automated system, you can boost the profitability of your start-up. So, how exactly can it do that?
- Optimized Employee Performance – With expense report management software, you can save time and money by ensuring that your employees are focused on what they were hired to do. Your sales team can concentrate on closing deals to drive profit for your company rather than spend hours on admin tasks such as filing expense reports. Your accounting staff can review claims and process reimbursement requests more efficiently on an automated system. There will be fewer revisions necessary as the software can ensure that all necessary data are included when the report is filed.
- Prevent Fraud – According to a 2010 report by the Association of Certified Fraud Examiners, smaller organizations are more prone to fraud because of the lack of internal control policies. The absence of an automated travel and expense management software increases the risk of fraudulent claims which can have a huge impact on your finances. The same report also cites that 15% of business fraud happens in expense reimbursement. It has a median loss of about $33,000 and takes about an average of 24 months to be discovered. What’s even more alarming is that most of these cases are found out through tips from other employees and not necessarily by audit.
Fraudulent reimbursement claims can certainly set you back in terms of growth and profitability. Using an expense management tool can help makes sure that company funds are spent efficiently whether in or out of the office.
- Prevent Overspending – Early Growth, a financial services consultant, states that overspending may result in the early demise of a start up business. This is a fate that you would want to avoid for your start-up. Having a visual of the expenses your business incurs allows you to make critical decisions. You can ensure that you are able to focus on strategies that bring an ROI rather than simply large revenue. Cost cutting becomes a business tool and not just as a way to patch up holes in the operations.
- Expense Reports Filed on Time – Filing a manual expense report is a tedious and time consuming task that most employees dread. This is one of the reasons why it is common for these reports to be delayed. Unfortunately, when these are not submitted on time, the company does not have the necessary information to analyze whether sales strategies are profitable or not. Revenue alone for the closed deals is not enough to determine the profit the company makes. For a start-up company such as yours, keeping track on the ROI of business trips is crucial.
Setting up a start-up company takes a lot of hard work and the last thing you want is for all your effort to go down the drain. Taking a close look at how your business spends money prevents overspending or costly strategies. Managing your finances gives you a chance to grow your investment by keeping costs from spiraling out of control. One of the most basic business solutions that can help you do this is an automated system that makes tracking your expenses a simpler task.
Find out your more about how expense management software can help drive the profit of your start up business. Check out the list of providers on CrowdReviews.com and start managing your costs the efficient way.
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