When Does Your Startup Need an Expense Management Solution?
As a growing startup, you will likely find your business in the position of reimbursing employees for business expenses sooner than later. But as a nimble team, do you need to invest in an expense management solution? At what point does Excel no longer cut it?
What is an expense management solution?
An expense management solution allows your company to track business expenses, process expense reports, and reimburse employees. A good business expense app supports both mobile and desktop devices, and syncs with your general ledger for better accuracy and simplified reconciliation.
Do early stage companies need a solution?
Strictly speaking, you don’t need an expense management solution in the early stages of your business. It’s possible to manually process each expense as it comes in, but this puts your company in a reactive position and the review and approval process will bottleneck quickly.
The question is whether that’s working for your budget and employee engagement. Implementing a business expense tracking app early on allows your company to drive expense management proactively and align your process with company culture from the onset.
What are the benefits of an expense management solution for startups?
The benefits a modern business expense app can provide to a startup are numerous. They provide visibility into future spend, automate expense tracking, create an efficient process that scales with your company, and save time and money.
Visibility into Business Spend
For any startup, accounting for business spend and maintaining a healthy budget is the key to sustainability, future fundraising, and strategic planning. An expense management solution will allow your startup to see where your company’s money is going, and provide it with enough insight to forecast spend and take action before the money is spent.
Clean expense tracking will also give your company a leg up when it comes time to audit its financial position and adjust spend.
Automation Saves Time and Money
Automating your expense management process can reduce the cost of processing expense reports from over $26 per report to less than $7. To put this into perspective, if you had a company of 50 employees and they submitted the average 1.5 expense reports per month, it would cost your company $23,967 per year to process those reports manually.
Additionally, it saves valuable time for the employees who are tracking business expenses and your finance person who is processing them.
A Solution That is Scalable
Implementing an expense management solution as a startup, will allow you to create a process that will grow with your company.
Look for a solution that is easy to set up, intuitive to use, and serves both your employees tracking expenses and the finance person processing and reconciling them.