Spend-Management Software Boosts Employee Experience

Marion Steward

In most small businesses, spend management is still done manually. That means issuing credit cards to employees, collecting receipts for every transaction, downloading the credit card statement from the bank, matching the receipts against the transactions and adding more details to the expenses in their accounting software. 

If the business has 15 employees with cards, and each card has 10 transactions, the accounting department must collect 150 receipts. If there are discrepancies, the accounting department must follow up with the employees. Even if all goes smoothly, the process is time consuming and error-prone. 

“The process of collecting receipts involves multiple reminders to employees at the end of the month, and I’ve yet to come across an accountant who enjoys doing it,” Yashwanth Madhusudan, co-founder and CEO of Fyle, told PYMNTS. 

Looking for a Better Way 

For these and other reasons, small businesses are looking for a better way. Fyle, a provider of expense-management software, has found that two-thirds of the customers who come to the company looking for a solution are transitioning from manual processes.

Demand for spend-management software has also been driven by people’s use of apps and software in their personal lives, which makes them want to see that kind of efficiency in the workplace; COVID and remote work accelerated the adoption of technology that allows employees to submit paperless expense reports, and FinTechs have launched business credit cards tied to expense-management software. 

“While demand has undoubtedly increased, it pales compared to the existing market opportunity,” Madhusudan said. “Roughly $1.5 trillion is spent on commercial credit cards with millions of small businesses that are yet to streamline their processes.” 

Meeting the Spend Management Needs of Small Businesses 

The spend-management needs of small businesses are fairly straightforward, Madhusudan said. They want an easy way to record all businesses expenses; verify and reconcile these expenses via credit card statements; classify the spend into the right category, job codes, projects or departments; push the spend data into their accounting system; and get real-time insights into their card expenses. 

Madhusudan said too many banks don’t offer small businesses the same kind of tools or data access that they give corporate customers, such as live data feeds for their business credit card spend, while too many FinTechs that offer credit cards coupled with new-age expense management software require monthly cash balances ranging from $25,000 to $250,000. 

“While issuing cards bundled with software is one way to address the problem, we believe that offering great software that can work well with the cards customers already use presents an opportunity to have a more significant impact,” Madhusudan said. 

Deploying Smart AI-Powered Automation 

Spend-management software delivers an experience that is quite different from the manual process so many small businesses are still using. 

With spend management software, employees turn in receipts inside apps that they already use, such as Gmail, Outlook and Slack; the software uses machine learning to extract the data from the receipt and automatically code the expense to the right merchant and category and add other attributes, and this data becomes available to sync with the accounting software. 

With real-time spend management on Visa credit cards, which Fyle launched April 19, there’s also another way for employees to submit receipts. When the employee makes a purchase, they receive an instant SMS notification asking them to reply with an image of the receipt. 

“Great experience for employees translates to efficiency and automation for the accounting department,” Madhusudan said of small businesses that transition to expense-management software. “The easy employee experience and smart AI-powered automation save days at the end of the month for accountants in closing books.” 

 

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NEW PYMNTS DATA: THE TRUTH ABOUT BNPL AND STORE CARDS – APRIL 2022

About: Shoppers who have store cards use them for 87% of all eligible purchases — but this doesn’t mean retailers should boot buy now, pay later (BNPL) options from checkout. The Truth About BNPL And Store Cards, a PYMNTS and PayPal collaboration, surveys 2,161 consumers to find out why providing both BNPL and store cards are key to helping merchants maximize conversion.

https://www.pymnts.com/spend-management/2022/employee-experience-efficiency-get-a-boost-with-spend-management-software/

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