The Small Business’s Guide to Finding Expense Report Software

If you’re finding that manually managing business expenses takes too much time, you’re not alone. Forty-nine percent of companies still rely on a manual expense management process.

The right expense reporting software automates your workflows, freeing finance and accounting to focus on the big picture. This article dives deeply into the process of finding the right software for your small business. Or, you can download the PDF version with interactive worksheets here.

Why you need expense report software

✓ Increase visibility for better decision making backed by data

By 2025, the world’s volume of data will expand tenfold. We increasingly need tools to help us parse through that data.

✓ Gain control over expenses to keep costs low

Companies saw a 64% reduction in errors and 40% improvement in policy compliance when using an expense reporting solution, according to the Aberdeen Group.

✓ Lower costs and reduce time spent on expense management

Reduce the cost of processing expenses by nearly 60% when implementing an expense reporting solution, according to the Aberdeen Group.

“In the past, organizations looked to the CFO to ensure the financials of the company were accurate. Today, with the increase of data across organizations, CFOs are looked upon to advise leaders as they plan out the strategic future of the company.”

— Adaptive Insights CFO Jim Johnson, as told to Forbes

Step 1: Evaluate Your Current Process

Outline your current concerns about your expense management process before you start evaluating solutions. Then, identify what you need from a tool to address that challenge. It will be much easier to compare tools and your process will be much smoother. 

Outlining concerns and needs

Here are some examples of common concerns for small businesses regarding their expense management.

  • Concern: Manual syncs with accounting and bill pay software
    • Need: Seamless integrations with accounting software
  • Concern: Manually reviewing expenses one by one
    • Need: Automation that enforces expense policy rules
  • Concern: Expenses getting stuck in reviews and approvals
    • Need: The ability to set approval workflows
  • Concern: Manual expense entry taking valuable time
    • Need: Management of corporate card programs
  • Concern: Waiting for bank statements to categorize and enter expenses into accounting systems
    • Need: Automatic syncs with accounting systems and credit cards
  • Concern: Asking employees for the nature of each transaction in order to properly code them
    • Need: Automation that enforces expense policy rules and employee expense submission that captures receipt data.
  • Concern: Slow reimbursements causing complaints
    • Need: To bill expenses back to clients and track and reimburse travel spend
  • Concern: Lack of visibility over employee spend
    • Need: Tracking spend against projects
  • Concern: Employees holding onto receipts for months on end
    • Need: Easy employee expense submissions and reimbursements

Step 2: Look for the right features & functionality for your small business

As you evaluate solutions with your list of needs and requirements, be sure to understand what features are available, how they’re best implemented, and how they work in the solution.

Submitting and Approving Expenses

Speed and Convenience

Mobile apps for Android and iOS

Capture expenses as they happen for better data from employees. Reviewing and approving expenses from an app is more convenient for managers and expedites bookkeeping.

Automated receipt scanning (OCR)

This feature uses Optical Character Recognition (OCR) algorithms to identify key expense data for import in seconds. 

Linked business credit cards

Syncing a card speeds up the submission process, and leads to easy and streamlined approvals. 

Automated expense creation

Look for features such as matching receipts to card feed transactions, reading receipt data, auto-drafting and suggesting expenses, and categorizing expenses based on past behavior.

Integrated accounting system lists

Seek out accounting system integrations with an “activity-based sync.” Your expense reporting software will immediately pick up on changes made to list data in your accounting or bill pay system. 

Simplified travel expenses and booking

In addition to a user-friendly travel booking experience, look for integration with expenses, automatic enforcing of your expense policy, and travel-specific dashboards or reporting.

Mileage tracking

For frequent travelers, mileage tracking can be a frustrating, manual process. Look for a solution that can track and calculate mileage for employees — employees just need to hit “start” and “stop,” and enter their departure and destination addresses. 

Workflow and Organization

Approval hierarchy

Look for the ability to add levels of approval, such as a user manager, project manager, or monetary threshold. This helps control departmental spend and improve policy oversight.

Company organization

Be sure you can group employees by department, teams, and projects. This will affect how your policy is applied, the automation rules you can create, reporting, and accounting syncs.

Non-employee users

You may need the flexibility to invite users outside of your small business for actions such as providing access to your accountant, paying contractors, or reimbursing interview candidates.

Credit Card Transaction Management

Corporate Card Transaction Integration

Your solution should be able to import corporate credit card data by:

✔ Setting up auto import;

✔ Uploading a credit card statement; or

✔ Uploading a credit card bank file with sub-accounts

Look for a central view into issued corporate cards to see unexpensed transactions before month’s end. (Your data should only be entered once reconciled, ideally through a report that matches the card statement.) The ability to distinguish reimbursable and non-reimbursable expenses will help determine employee payment and support clean reporting.

Corporate Card Statement Reconciliation

Rather than manually coding credit card transactions, your software should enable a check-and-confirm management experience that eliminates hours of work on monthly reconciliation. Once your company is pulling in credit card transactions, your software should be able to auto-categorize the expenses that come in. It should also have functionality that can mark expenses as possible duplicates. 

Card Issuing

Your solution should allow companies to issue virtual and physical cards to their employees that draw from the company funds. This gives your company end-to-end control over employee expenses.

Issued from your solution, administrators can set spending rules for where, when, and how much an employee can spend for approved expenses. The company can then kick off automated expense reconciliation after a card is swiped. Think of it like a debit card with preset rules that’s connected to the software you use for expense management. 

Expense Policy Compliance & Internal Controls

Your solution can help enforce your expense policy by solving communication challenges and automating policy enforcement.

Communication

The majority of issues causing expenses to be rejected are often cleared up with a simple question or additional information. Use a solution that makes communication more efficient — and, ideally, ties each communication to the expense it relates to. 

Look for:

  • Chat
  • Commenting
  • In-mail

Automated Policy Rules

A solution’s system-triggered rules can allow you to catch issues before expenses are even submitted and set up card issuing without a hitch.

Look for policy rules that boost compliance by automating your expense policy to prevent or warn of out-of-policy expenses before they’re submitted. 

Examples of commonly automated rules are requiring a receipt for any expense over $75 and setting a daily budget for meals when traveling.

Transparency

An expense management tool should provide you with a place to store your written expense policy, while helping you implement rules and communicate about specific expenses.

Integrations With Accounting Software

Any tool that you add to your finance toolkit should work well within your existing ecosystem. Your expense reporting solution’s data should automatically flow into your accounting software, matching expense categories to your existing chart of accounts and mapping custom expense fields like customer or department. Your integration should also help automate bookkeeping by matching and reconciling expenses with bank debits.

Also, be sure that you can download your expense data as a .csv or PDF file. 

Reporting and Analytics

Finance is being asked more than ever to produce data and insights to help companies make strategic business decisions. In fact, five of the top 10 threats cited by CEOs are financial in scope:

  1. Uncertain economic growth
  2. Over-regulation
  3. Exchange-rate volatility
  4. An increasing tax burden
  5. Social instability. 

The information from company expenses is valuable data. And finance functions are critical to providing insights on navigating these threats. 

Reporting & Data Tracking

Your reporting should help you provide context and tell a story about topics such as return on marketing spend, customer acquisition and retention costs, and spend by project. It should also index expenses individually, storing data in individual fields. This will allow you to pivot your spend data to add context to strategic decisions. 

Look for software that:

  • Sorts data based on merchant, category, user, class, project, etc. over any time period
  • Syncs and tracks data from your integrations, such as your accounting system

Audit Preparedness

Source documentation and soft copies of expense reports with approval history should be automatically sent to your system of record, such as your accounting system or bill pay system.

Support

There will always be times when you or your team needs assistance or has questions.

Consultative Services

If you want a team to lean on, consider a solution that offers services like:

  • Administrative services that manage day-to-day operations and system changes of your expense reporting tool, while providing best practices. 
  • Approval services that can offload the approval process from your in-house team, to ensure compliance and protect internal relationships. 

Customer Support

Reach out to Support as if you were a customer. Make sure your concerns are addressed in a time period that you feel is appropriate. 

Look at a solution’s social media channels and phone, chat, and email availability.

Also take a look at customer reviews on sites like G2 Crowd and Capterra. 92% of B2B buyers are more likely to purchase after reading a trusted review — what other customers say can play an important role in your decision.

If you anticipate needing faster, in-depth support for urgent matters, research whether premium support is an option too.

Documentation

The ability to troubleshoot issues will help you keep your expense report software up and running. Proper documentation and videos should be available to get you through common issues and questions, for both you and your team.

Before you purchase, comb through the support documentation. Does it seem helpful? Is it easy to understand? Read through any FAQs. 

Reimbursements and Cash Flow Management

Your solution should make reimbursing employees as easy as possible. Look for integrations with bill pay systems, such as Bill.com, that provide a central place for reviewing all payments — both for expense management and accounts payable.

Employees’ experience and wait time for funds is an important — often overlooked — consideration for reimbursing expenses. Real time systems can initiate reimbursements as often as you approve individual expenses — meaning employees can get quickly reimbursed.

Step 3: Evaluate solutions

There are clear cost and time saving benefits when using expense report software. Selecting the one best suited for your needs will solidify those benefits and increase adoption throughout your small business.

Our PDF version of this guide has 2 interactive evaluation worksheets that can help get you started:

  1. A pre-evaluation worksheet to make sure you’re internally aligned.
  2. A feature evaluation worksheet to make sure you’d get the features you need.

In addition, consider asking each solution the same questions. This will ensure you can compare answers equally as you evaluate. Here are suggested questions to ask:

Solution Structure and Basic Features

  • Can I create custom expense level fields and team level fields to filter and report on expenses?
  • Are reports created automatically from expenses? 
  • Can I create dynamic, custom reports?
  • Can I tie individual expenses to events, clients, projects, etc.? 
  • Can I customize my approval process?
  • Do you offer direct deposit to employee bank accounts for reimbursements? 
  • How long do funds usually take to be received by the employee?
  • Do you offer travel booking and travel expense management within your system?
  • What security features do you have to protect bank account and credit card information?

Expense Policy

  • Can I automate my expense policy by building granular rules?
  • Can I build rules off of any standard or custom field? 
  • Can I build rules off of a combination of fields?
  • Can I set rules and budgets down to the employee, category, time period, etc.?
  • Can I choose whether I want to warn a user or block an expense from being submitted if it’s in violation of a rule?
  • What tools do you offer inside the platform to communicate with employees? 
  • Is employee communication attached to the individual expense that it refers to?

Managing Corporate Cards

  • What tools do you offer to help me manage my corporate card program?
  • Do you offer card issuing through your system?
  • What will my monthly reconciliation process look like?
  • Is there a way to manage outstanding expenses on corporate cards?

Extracting Data

  • What accounting software do you sync with?
  • How often is data synced over? What triggers data to be synced?
  • Do you match the synced expenses to the associated debits in my accounting software?
  • Can I export my data? Can I select what fields are exported? What file types are supported?
  • How long is data stored?
  • How is data accessed in the event of an audit?

Mobile

  • Do you have a mobile app for both Android and iOS?
  • What features are available in mobile?

Additional Questions

  • Do you offer a free trial? For how long?
  • Is any feature or capability unavailable during the trial?
  • How is your pricing structured? What price point would I fall into based on my needs?