Spend management tech provides real-time insights

Spend management means having visibility into your company’s procurement, expenditures, and business and travel expenses. Not having it, or relying on old spend data, can spell trouble for company revenue.

But according to the experts at PYMNTS.com, most small businesses still use a time-consuming manual approach to spend management. For instance, employees have to be reminded to turn in their receipts, receipts must be matched against credit card statements, and details have to be added into accounting software. Then, if there are discrepancies, the accounting department has to follow up with individual employees.

In fact, expense management software provider Fyle found that two-thirds of their customers said they were seeking a solution to transition away from manual processes, such as having to download statements each month from the bank that issues their credit cards.

Spend management needs

If you’re like your peers that are working with Fyle, you’re looking for efficient fintech that equips employees to use business credit cards that are directly synced to expense management software that also enables them to submit paperless expense reports.

The AI-enabled spend management software that’s on the market:

• records all business and travel expenses
• verifies and reconciles expenses via credit card statements
• classifies the spend into the appropriate category, job code, project or department
• streamlines elements of the reimbursement process, like expense approvals
• pushes the spend data into your accounting system, and
• provides real-time insights for analysis into card expenses.

Some fintech providers even offer live data feeds for business credit card spend.

Yashwanth Madhusudan, the co-founder and CEO of Fyle, told PYMNTS: “The easy employee experience and smart AI-powered automation save days at the end of the month for (accounting team members) in closing books.”

“We work with a handful of clients that code expenses down to the customer and the project level. And some of them have a reasonably high volume – a couple hundred charges on their (credit) card a month. And the process of having to manually … track down who did what and try to get those assigned to the correct project was incredibly cumbersome,” said Jillian Mittelmark, the founder and president of Eden Prairie, MN, accounting firm Resolve Works.

“And now it’s very simple because Fyle integrates with QuickBooks Online, and so we can pull in all of the customers and projects directly from that system. And then whoever is coding the expense report can just go in and easily select what the project was, and what the charge was for, and attach the receipt,” she said.

Seeing, controlling spend in real-time

A lack of adequate spend management oversight on business credit cards can be as risky as turning an irresponsible teenager loose with a personal credit card.

But with spend management software, employees can turn in receipts using apps that they already use every day, such as Gmail, Outlook and Slack. The software uses machine learning to extract data from receipts, automatically code the expense to the right merchant and add other attributes. Then, that data becomes available to sync with your accounting software.

For example, Fyle recently launched a real-time credit card spend management program on the Visa network (with support for other networks set to launch over the next few quarters) where, when an employee makes a purchase, they receive an instant SMS notification asking them to reply with an image of the receipt.

Kevin Permenter, the research director for financial applications at International Data Corporation, commented on the program in a press release. “It offers their users the opportunity to utilize their own business cards in support of business spend management initiatives. Fyle’s ‘bring your own card’ approach has the potential to provide real-time insights, visibility and control to the millions of small businesses that use business and corporate cards as cash management tools,” he said.

Spend management software explosion

Fortune Business Insights is reporting that spend management software is becoming popular with your peers. In addition, key tech players are investing in research and development and this particular market is poised for growth.

With more and more vendors introducing spend management tools, there are some important questions they’ll all need to be able to answer when you check out their product demo. Among them:

• Is a minimum monthly cash balance required?
• Can we keep the company credit cards we have, or do we have to issue new cards?
• Is it easy to integrate and use or will we have to train employees on how the system works?
• Is this platform scalable? Can it grow with our business?
• What does the business rules engine that allows employees to spend from our allocated budget look like (e.g., how we can use it to prevent overspending)?
• Can remote employees access it? Is it a streamlined user interface?
• What can be customized for our Finance team?
• How will it help us to cut costs?
• Is it compatible with our existing ERP?
• What are the vendor’s deployment options and implementation processes?
• What’s the customer support experience like if there’s a problem?
• Is the pricing model easy to understand?

In addition, BetterBuys.com offers insights on accounting software platforms that include expense management solutions as major features.

Some vendors offer customers their software in a modular format, so companies can choose and pay only for the features they need. Other vendors have pricing tiers with different features under each tier.