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How do expense management tools improve financial planning and analysis?

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Expense management is a crucial aspect of corporate finance, as it involves tracking, reporting, and controlling the costs incurred by a business. However, traditional methods of expense management, such as manual data entry, paper receipts, and spreadsheets, can be time-consuming, error-prone, and inefficient. That's why many companies are turning to expense management tools, which are software applications that automate and simplify the process of managing expenses. In this article, we will explore how expense management tools can improve financial planning and analysis, and what benefits they can bring to your business.

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Ahmad Nakib

1 What are expense management tools?

Expense management tools are software solutions that help capture, process, and analyze business expenses. They can integrate with accounting, payroll, and ERP systems, as well as employee credit cards, bank accounts, and mobile devices. Artificial intelligence, optical character recognition, and machine learning can be used to scan, categorize, and validate receipts, invoices, and bills. Features of expense management tools include online expense reporting and approval workflows for real-time visibility and control over spending; policy compliance and fraud prevention; budgeting and forecasting; expense analytics and dashboards; reimbursement and payment processing; and tax and regulatory compliance.

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2 How do expense management tools improve financial planning and analysis?

Financial planning and analysis (FP&A) is the practice of assessing a business's financial performance and outlook, and providing strategic guidance and recommendations to support decision-making. This process involves collecting, organizing, and analyzing financial data, as well as creating financial models, scenarios, and projections. Expense management tools can improve FP&A in numerous ways, such as reducing manual work and errors by eliminating the need for manual data entry, reconciliation, and verification. Furthermore, they can streamline the workflow of expense reporting and approval, saving time and resources. Additionally, expense management tools can capture and store expense data in a standardized format to ensure its accuracy. They can also generate expense analytics and dashboards to monitor key performance indicators. Lastly, they can enable you to create different scenarios and forecasts for budgeting and cash flow optimization.

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Ahmad Nakib
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Expense analysis is a fundamental component of financial planning. By understanding and tracking your expenses, you gain valuable insights into your spending patterns, identify problem areas, and make necessary changes to achieve your financial goals. Through effective expense analysis, you can create a realistic budget, prioritize expenses, monitor your progress, and uncover cost-saving opportunities. Leveraging technology enhances the expense analysis process, provides tools and software to streamline tracking, categorization, and analysis. By incorporating expense analysis into your financial planning efforts, you can take control of your finances and achieve long-term financial success.

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3 What are the benefits of expense management tools for your business?

Expense management tools can bring many benefits to your business, such as improved efficiency and productivity, reduced costs and risks, and better support for strategic decision-making. Automating and simplifying the expense management process can enhance employee satisfaction and retention, as well as reduce administrative burden and turnaround time. Additionally, the tools can help you enforce your expense policy and compliance rules, preventing unauthorized or excessive spending. Lastly, they can provide reliable insights into your expense performance and outlook, allowing you to align your spending with your business goals and identify opportunities for cost savings.

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4 How to choose the right expense management tool for your business?

When selecting an expense management tool, it's essential to consider various factors such as compatibility and integration, scalability and flexibility, security and reliability, and customer support and service. For example, you should make sure the tool is compatible with your existing systems, such as accounting, payroll, and ERP software. It should also be scalable and flexible enough to accommodate changing needs and preferences. Additionally, it should be secure and reliable with features like encryption, authentication, backup, and recovery. Furthermore, it should provide customer support with a dedicated account manager and 24/7 help desk. This way you can ensure a smooth data flow and user experience while protecting your data and transactions from unauthorized access.

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Drew Howell

VP, Account Management & OEM @ Beamery
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Spend management systems are critical for businesses of all sizes. Depending on your technology stack, you want a system that integrates seamlessly with your planning, HR, and accounting systems. Often overlooked, consider the size of your business. For smaller businesses, working with a technology-first provider vs. a bank directly may have benefits, such as your own corporate card that delivers instant control & data visibility. For larger businesses with established banking relationships, maintaining your existing card and treasury relationships is highly beneficial, meaning that technology-first providers that require adoption of their card are not best. Ask providers how you can keep your card and also access their software.

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5 How to implement and use expense management tools effectively?

Once you have chosen the right expense management tool for your business, you need to implement and use it effectively to maximize its benefits and potential. To do so, you should communicate and train your finance team and employees on how to use the tool, and provide them with clear and updated guidelines, manuals, and tutorials. You should also monitor and review the performance and usage of the tool, track the impact of using it, adjust and improve the settings and configurations, customize it to suit your needs, update and upgrade it regularly, and take advantage of its new features.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Drew Howell

VP, Account Management & OEM @ Beamery
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Multiple audiences all leverage the spend management system you choose. While the primary selector (and power user) is the finance team, the technology platform will only be as effective as the employees who use it, enter data, and adopt the processes associated with effective spend management practices. Take for example a business I worked with. The finance team selected a vendor who met all its requirements: a corporate card, integrations, and appropriate price. However, the submitter experience for the average employee for the chosen provider was cumbersome, clunky, and inaccurate, meaning everyone hated the tool and did not use it. Now, finance is selecting another tool, but this time it learned, "Don't forget end users!"

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How do expense management tools improve financial planning and analysis?

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1 What are expense management tools?

2 How do expense management tools improve financial planning and analysis?

3 What are the benefits of expense management tools for your business?

4 How to choose the right expense management tool for your business?

5 How to implement and use expense management tools effectively?

6 Here’s what else to consider

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