How to Choose Small Business Expense Management Software

Managing expenses is an important part of running a successful small business. Of course, as your operation grows, tracking business spend becomes more complex. That’s why expense management software for small businesses is an essential tool that streamlines the process, saves time, and improves accuracy.

But with so many options out there, how do you choose the right one for your small business? Here are the key factors to consider.

Why Your Small Business Needs Expense Management Software

Many small businesses handle expenses manually, but this approach is time-consuming and prone to errors. From chasing employees for receipts to painstakingly matching numbers in spreadsheets, the whole process can drain valuable time and resources. 

By implementing the right expense management software, small businesses can:

• Automate the entire process and reduce human error
• Gain real-time insights into spend, which helps with more accurate budgeting and financial planning
• Enforce compliance with company policies and reduce the risk of fraudulent claims
• Speed up reimbursements to keep employees satisfied and productive

Key Considerations When Choosing Expense Management Software

When picking the right expense management software for your business, it's essential to look at a few key factors to help ensure a smooth choice. You’ll be better equipped to choose a system that meets your needs with confidence. Here are four important points to consider.

1. Assess Your Business Needs

Before making software comparisons, you need to assess your company’s specific needs. 

• Are your expenses primarily related to travel? 
• Do you need to track events like client dinners, or is your focus on project-related expenses?
• What types of expenses need tracking? (e.g., travel, office supplies)
• How many employees will use the software?
• Do you require real-time visibility?

Understanding these details will help you narrow your options.

2. User-Friendly Features

The most advanced software in the world is useless if it’s too complicated for employees to navigate. Look for expense management software that’s user-friendly, with a simple interface that even less tech-savvy employees can grasp. Prioritize mobile apps that allow users to capture receipts on the go.

Some features that make expense management tools more user-friendly include:

• Receipt Scanning: Employees snap a photo of a receipt, and the software automatically uploads and matches it with expenses.
• Expense Categorization: This allows automated classification of expenses for faster reconciliation.
• User-Centric Interface: The design and structure of the platform allow for intuitive usage with little to no training.

A tool that employees actually want to use will encourage high adoption rates and expedite the efficiency process.

3. Integration with Your Accounting Software

Small businesses typically use accounting platforms to streamline closing the books, so make sure your expense management software integrates with them. Seamless integration means expenses are automatically updated, which reduces manual entry and improves accuracy.

Navan’s solution for small businesses integrates with accounting platforms like NetSuite and Xero. With an automated categorization and reconciliation process, closing the books becomes easier than ever with Navan.

4. Pricing and Cost Structure

Expense management software comes in all price ranges — some are even free. But don’t think that a free solution can do it all or is the most cost-effective choice. When making your decision, it’s important to consider all of the costs and the benefits of the software.  

When considering the cost, don’t forget to factor in:

• Implementation fees
• Training costs (if required)
• Customer support aspects

When selecting expense management software, consider any possible additional costs that may apply as your business grows. Consider which features you’ll want to access as subscription rates increase. 

Must-Have Features for Expense Management Software

Now that you’ve considered your business needs let’s dive into the core features to look for.

Real-Time Tracking and Reporting

One of the most significant advantages of expense management software is tracking expenses in real time. It gives business owners and managers immediate insights into where the money is going and helps them spot trends or discrepancies early on.

This feature also allows you to generate custom reports to track employee spending, project costs, or department budgets. For small businesses looking to stay lean, access to real-time data is invaluable for making informed decisions quickly.

Automation and Receipt Matching

Automation is where expense management software really shines. Look for a system that automatically:

• Categorizes expenses based on pre-set rules
• Matches receipts to expenses using OCR (Optical Character Recognition)
• Flags expenses that don’t comply with your policies (such as overspending or unapproved vendors)

This automation reduces the burden on your finance team and secures accuracy.

Compliance and Policy Enforcement

Adhering to internal expense policies is critical for financial control at small companies. Expense management software should allow you to:

• Set spending limits
• Designate approved vendors or suppliers
• Automatically flag expenses that fall outside of these policies

Some tools even allow you to customize expense workflows so that specific types of expenses trigger manager approvals.

Scalability

As your business grows, so will your expense management needs. Make sure the software you choose can scale with your business, whether you add new employees, handle larger expense volumes, or integrate with other software solutions.

Choosing a scalable solution will save you the hassle of upgrading or switching systems down the road.

How to Implement Expense Management Software in Your Small Business

Once you’ve chosen your expense management software, it’s time to implement it. The following steps will help achieve a smooth transition:

• Set Up Your Account: Configure the software with your expense categories, spending policies, and approval workflows.
• Connect to the App: To manage expenses on the go, download the platform’s app and have a world of information at your fingertips.
• Monitor Adoption: Monitor how well employees are using the software. If adoption is low, gather feedback and provide additional training if needed.
• Review Reports Regularly: Use the reporting tools to track spending patterns, identify areas for cost-cutting, and review policy compliance.

Streamlining Your Expense Management

Choosing the right expense management software for small businesses is an investment that pays off in time savings, financial accuracy, and employee satisfaction. By assessing your business needs, focusing on user-friendly features, and considering scalability options, you can select a tool that supports your growth while staying within your budget.

Up-level expense management at your small business today by choosing Navan’s solution. Get started now.