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What is an Expense Report? How to Create One?

Vlad Falin

January 19, 2023

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One crucial aspect of business finance management is knowing how the money of your organization is being spent.  You can’t paint a complete picture of your organization’s financial health without understanding how the money is flowing first. This clarity is precisely what effective expense reports provide. When properly maintained, expense reports give you a clear perspective over your organization's finances. 

In this comprehensive guide, we delve into:

  • The Definition of Expense Reports: What are they and why are they crucial?
  • The Importance of Accurate Expense Reporting: How does it affect your organization's financial health?
  • Creating Effective Expense Reports: We'll explore two practical methods to craft accurate and insightful expense reports, empowering you to make informed financial decisions.

What is an expense report?

An expense report is a crucial tool in business finance management. It is a categorized and itemized list of expenses made on behalf of the organization. These reports assist employers or finance teams in determining what money was spent, what was purchased, and how much of the expenditure is eligible for reimbursement.

The purpose of an expense report is to track the expenditures of a business and expense forms should include all purchases necessary to operate a business, such as food, gas, or parking.

It is most commonly used by employees when requesting reimbursement for expenditures. 

When expenditure amounts exceed a certain threshold, receipts are usually attached to the form. 

Employees are paid the requested amounts after the employer examines their submissions for accuracy and validity. 

In this case, the employer will be able to recognize accounting profit and taxable profit based on the reimbursements.

Business expense reports are usually generated on a monthly, quarterly, or annual basis to track business spending:

  • It is important for a company to maintain monthly and quarterly expense reports to track all of its purchases during that period. The reports are used to determine whether spending within the organization's budget is within its limits and to identify areas for cost reductions.
  • Yearly expense reports are in turn used for tax purposes. A company's tax returns are prepared using its annual expense reports.

It is also possible to use expense reports to detail expenditures made against an initial employee advance. 

Employers still record employee expenses as business expenses, but they do not reimburse employees; instead, they deduct the expenditures from employee advances.

Why use an expense report?

Expense reports are essential for small businesses, enabling a clear tracking of business expenses often paid out-of-pocket by employees. These reports detail all reimbursable expenses and require attaching receipts for accurate verification. Once reviewed for accuracy, employees are reimbursed accordingly. Additionally, small business owners and accountants use these reports to analyze total expenses over specific periods, employing accounting tools to assess whether costs align with budget expectations

The following are some benefits of generating a expense report:

1. Facilitates efficient expense tracking and cost control

Analyzing expense report data is the ideal starting point for cost control. This allows you to track your firm's spending over time by giving you a clearer picture of what your money is being spent on. 

Additionally, you can analyze how much your employees are spending on different expense categories, determine which categories are driving up costs, and implement strategies to reduce or eliminate them. In addition to identifying loopholes in expense policies, these reports can help you decide which vendors to prioritize and which ones to let go by identifying loopholes in expense policies.

Tracking expenses over time allows you to identify whether a particular expense category (such as transportation or hotels) is increasing costs excessively. As a result, you can strategize on how to reduce or eliminate these costs.

2. Helps with budgeting

A business's budget is essential to its smooth operation. A detailed and accurate expense report can help your organization develop a strong and informed financial plan. As a result, various departments and projects can be allocated more appropriate budgets. You can maintain your business's financial security long-term by consistently tracking expenses in order to ensure that different departments and projects adhere to their budgets.

3. Makes for accurate reimbursements

In the event that an employee paid for business expenses out of pocket, they would expect a fair and accurate reimbursement. 

Also, you want to make sure that the request is fair so that you don't pay more than you are owed. 

It allows organizations to determine if a claim is legitimate faster by providing employees with a standardized process to learn what can and cannot be expensed. 

In addition to providing solid evidence of when, where, and how expenses were incurred, itemized expense reports with receipts do the same for proving compliance with your organization's expense policy.

4. Simplifies tax deductions

Tax deductions are available for many business expenses incurred by employees at work. In order to claim expenses as deductions, you must properly record them and provide proof that they were actually incurred. 

Business owners sometimes use their bank account or corporate card statements to keep track of their deductible expenses. It's important to keep in mind that these statements may not include all expenses. 

In contrast, expense reports simplify the process of keeping track and deducting deductible expenses during tax season. The finance team simply needs to add up all the expenses that can be deducted and enter them into the appropriate tax forms.

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What should be in the expense report?

By creating an expense report, you (or your accountant) can easily add up all expenses so that they can be entered into your tax return. 

Some crucial elements to include in an expense report include:

  • The name, department, designation, and contact information of the employee who submitted the report.
  • The date and amount of each expense (corresponding to the date and amount on the receipt)
  • What type of expense is being incurred (meals, mileage, internet, etc.)?
  • Vendor or merchant who sold the item
  • If applicable, the client or project for which it was purchased
  • From your accounting chart, determine the account where the expense should be charged
  • A description of each expense in more detail
  • Expense subtotals and total costs, including taxes, for each type of expense
  • (If applicable) a deduction for prior advances made to the employee

How to create expense reports

Companies most often generate and track expense reports using spreadsheets, templates, or expense reporting software. 

You can generate expense reports in two different ways: manually through templates, or through Pluto. 

Manual expense reporting with custom templates

To make the task of preparing expense reports easier for employees, some organizations provide customizable, ready-made templates to download and use. To report expenses in this way, follow these steps:

  1. The employee outlines their name, contact information, designation, the dates covered, and the purpose of the report in the appropriate fields.
  2. Following that, they determine how many rows and columns the expense report should contain. For example, some firms have mandatory columns and categories that correspond to the expense categories and columns in tax returns.
  3. In the report, expenses should be listed chronologically with brief descriptions, with the most recent expense appearing at the end.
  4. In order to calculate the grand total, the employee must first calculate the subtotals for each expense category followed by the total for all expenses. Subtotals assist the finance department in analyzing expenses.
  5. Finally, all expenses mentioned above must be accompanied by receipts. The receipts can either be scanned or photocopied depending on whether the report is being submitted digitally.
  6. Reports are submitted to the line manager or department manager for validation and fraud detection.
  7. As soon as they approve the report, it is forwarded to the finance department for reimbursement.

Automated expense reporting

The use of expense report templates is a quick way to keep track of expenses for small businesses. 

The problem arises when your business grows, at which point the process of filling out a report, even if using a template, can become a time-consuming task. 

When multiple departments process several expense reports a day, it is important to switch to an automated expense reporting solution like Pluto, so that these reports can be tracked and managed more efficiently.

  1. Pluto enables employees to create expense reports on the fly. Their receipts need to be captured digitally or filled out in the mandatory fields within the application. 
  2. By grouping all the expense claims together, a report can be created and submitted effortlessly. 
  3. Pluto also provides virtual and physical cards, so the expense data are booked straight into the platform for later use.
  4. Line managers and department managers review reports to identify policy violations, fraud, duplicate expenses, or warnings about them. 

How to simplify the expense reporting process

While expense reports are important when it comes to gaining an overall view of the way money is moving, creating them can be a hassle when your organization incurs too many expenses to keep track of manually.

However, there are a few ways that you can simplify your expense reporting. These include:

Switching to expense reporting software

The first step in expense management is to file expense reports. You must also maintain policy compliance, reimburse expenses on time, and conduct successful expense audits to stay on top of your business expenses. 

This is where Pluto can help. By providing multiple ways to record expenses on the go, we eliminate the need for manual data entry and paperwork. You can benefit from an expense management solution by:

  • Generating and submitting reports automatically;
  • The ability to support multiple expense policies and spend limits;
  • Eliminates policy violations and fraudulent expenditures
  • Analytical reports and intuitive dashboards increase spend visibility

With all of these features, you can save time and money while keeping your employees productive.

Make expenses easy to report and track

Provide your employees with Pluto real-time reporting system where they can track expenses, submit receipts, and report business expenses. 

Business expense reports can be updated in real-time using online or smartphone apps, and receipt images can be added for total transparency, if you use digital technology. 

Time-stamping and expense classification make it easy to catch fraud, which is beneficial to both you and your employees.

Embrace mobile devices

By scanning receipts and automatically extracting and reporting the key data, Pluto saves your employees' time and improves their expense reporting accuracy. 

It makes perfect sense for you to use an app that allows your employees to track expenses easily from their phones since most (if not all) of your employees spend a lot of time on their smartphones. 

Set up a routine audit

Ensure that you also incorporate a routine audit process into your business expense report policies. Your expense report should be audited quarterly, biannually, or annually, depending on the number of expenditures your employees incur. 

You can catch fraud cases through audits, but you can also understand where the biggest expenditures are and reduce them. 

Routine audits can also help you improve management and tracking of your business expenses by letting you know how to refine your reporting process.

Automated expense reporting with Pluto

Pluto allows you to issue virtual cards and physical cards and that immediately solves two things:

  • No need for petty cash or out of pocket expenses;
  • Real-time reporting of all the incurred expenses;

The spend management system allows you to issues cards for a particular employee, vendor, or even expense type. 

It also allows you to set the limits on the go, and see all the expenses in the real-time report. All that, while your employees can easily categorize the expenses and upload the physical receipts just by taking a photo on their mobile device. 

Reporting expenses manually is very time consuming, but having them all digitally stored and automatically reported solves the problem. 

Key takeaways

Expense reports are a crucial aspect of the financial bookkeeping of any business organization. Not only are they important for knowing how much money is being spent by the company, whether as a whole or for a specific project, but also for the purpose of reimbursing employees for business-related expenses. 

Plus, they also help you with budgeting, tax reporting, and cost control measures.

You can easily create an expense report using a premade or personalized template, but you’ll have a much easier time in the long run if you start using Pluto.

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Spend Management
November 14, 2022

Vlad Falin

What is Spend Management? Importance, Benefits & Process

In the realm of business operations, effective spend management is crucial for maintaining a healthy financial bottom line. Businesses grappling with inefficient spending control face risks that can substantially impact their financial stability. 

For example, poor invoicing practices that cause a delay in payment can lead to contract management issues or, even worse, a lost client for your business. It also might cause issues with some of your preferred suppliers if they feel they’re not being paid on time. 

Making a slip-up that disrupts a subscription can mean your company lacks access to critical software or tools until the issue is fixed.

A poor expense report system means charges incurred on your business trip might result in many follow-up questions, so your accounts payable team is on the same page with purchase orders. A system without real-time visibility for spending data is not ideal for any organization and does not make it easy to reduce spend.

Intelligent spend management helps prevent these issues. A business uses spend management to comprehensively track and review organizational-wide spending and purchase orders down to the last dirham. 

In this post we will deep dive into spend management and discuss the best ways to properly manage it. 

What is spend management?

Spend management refers to the systematic process of tracking, analyzing, and controlling an organization's total expenditure. It encompasses all aspects of business spending, including invoicing, contract management, subscription services, and expense reporting. 

The goal of spend management is to enhance financial stability by providing real-time visibility into all financial transactions and purchase orders. This comprehensive approach enables businesses to identify inefficiencies, reduce unnecessary expenses, and maintain strong relationships with suppliers and clients.

The Importance Of Spend Management

Effective spend management is crucial for a company's financial health and operational efficiency. Neglecting careful expenditure tracking or allowing excessive indirect spending can lead to significant revenue loss, risking even the most well-planned business strategies. Managing costs and enhancing efficiency becomes challenging when financial processes are time-intensive and complex.

A report by McKinsey highlights the critical nature of this issue, noting that external spending on suppliers typically represents 40-80% of a company's total expenses. This statistic underscores the vital importance of meticulous spending control. Furthermore, the process of reviewing and optimizing expenditures can have a substantial impact on employee workloads, indicating the far-reaching effects of spend management.

Adopting robust spend management practices enables companies to achieve greater financial stability and avert potential crises. Implementing a system that tracks and monitors all financial transactions ensures that expenditures are fully accounted for, reducing the likelihood of wastage. In summary, efficient spend management is not just about cost control; it is a strategic approach that influences every aspect of a company's operations and contributes significantly to its long-term success.

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Advantages Of Digital Spend Management

In this day and age, using an online tool to keep track of your expenses should be a no-brainer. Let’s have a look at some of the main advantages.

1. Insight Into Everyday Expenditures 

Where is every dirham your company makes going? If you don’t know, digital spend management will dramatically strengthen financial accountability, budgeting, and expenses. In addition, reporting on where company funds are flowing makes it much simpler to see how different department heads oversee budgets. Read more on how to improve internal control over financial reporting.

2. Stronger Financial Controls 

Spend management tools like Pluto, allow you to not only monitor your spending in real-time but also set the limits on the go. In addition to that you can issue cards for departments or individuals, and even focus them on a particular type of usage, such as specific vendors only. 

spend management

3. Budget optimization 

Effective spend management is a great solution to ensure a better-looking budget. Analyzing and managing spending makes it simple to find and cancel unneeded services, negotiate lower prices with new supplier contracts, and never have to pay a late fee again. It will also significantly help your board of directors as they’ll have a simplified, streamlined budget to review and discuss at the start of the year. 

Common Spend Management Challenges 

It’s easy to pursue spend management practices that hurt your business’s bottom line if you’re not careful. Many ‘traditional’ best practices might not fit companies with remote-first work policies, engage in cutting-edge industries, or have an unorthodox structure.

If your company has a dynamic structure, spend management becomes all the more important to help you keep up with the competition and get the most value out of every dirham spent. 

Keep these potential challenges in mind as you pursue spend management practices. 

1. Relying On Old Spending Data

Be wary of relying on old budgets or financial data when managing more spend. It’s challenging for leadership to identify problem areas with cash inflows or outflows, when they only have outdated information.

2. Over reliance On Manual Mapping 

Having to go back at the end of the month to match spending to budgets manually can take an inordinate amount of hours and opens the door to errors and mistakes that can throw off a spend management policy. 

Pluto helps to automatically match spend to budgets in real-time, ensuring accounting and finance teams have accurate updates. 

3. Harnessing Too Much Technology

Modern financial software can dramatically help your company’s day-to-day operational flow. However, if these solutions do not work together, chaos can ensue which leads to data migration and processing errors. Pluto integrates with your accounting tools, cutting the data flow time significantly. 

4. Outdated Processes

The post-COVID world of remote and digital work means your employees might be scattered across the globe and in different time zones. Having to arrange shared corporate cards manually or coordinate team spending with employees in different locations can be tricky. Pluto offers unlimited virtual cards, which allow you to provide a payment channel for any employee anywhere in the world. 

spend management challenges

How To Improve Your Spend Management Process

Optimizing your spend management process might seem tricky at first glance. Fortunately, small and large businesses often rely on the same core strategies to optimize spending. 

1. Rely On Spend Management Software: Pluto can help automatically track expenses, keep abreast of budgeting, and help manage strategic sourcing. CEOs and CFOs then have relevant, real-time data at their fingertips to see where their company is financially. 

2. Focus On A Few Payment Methods: Do you have too many company cards in your pocket? It might be time to streamline purchasing methods to help simplify your spend management strategy. For example, your business can dramatically improve expense tracking by asking employees to only use company cards for business expenses instead of asking for their personal cards to be reimbursed. 

3. Have An Organized Approval Process: You can clarify your spending process (you might want to check our post on how to create a corporate card policy)  by ensuring employees have a clear hierarchy of how and by whom purchases need to be approved. If your team is unclear, they might complicate the payment process by not filing the right reports, which means your financial team could be left in the dark about purchases. 

6 Efficient Spend Management Strategy Tips

Your company needs to optimize its spend management strategy to ensure the final results lead to reduced procurement costs, improved efficiency, and streamlined workflows. 

Spend management best practices also help improve vendor relationships and communication, procure the optimal goods and services your business needs, and even help you earn volume and early payment discounts due to more effective and simplified financial practices. 

Keep the following steps in mind for the best results regardless of your organization’s industry or size. 

1. Calculate Expenses

Do you know exactly where employees spend company funds? If not, you’ll need to build a comprehensive list of company expenses, suppliers, and entities where funds are going. 

This might quickly become a challenge if you’re in charge of a large business. If so, look to designate specific team members to review employee salaries, utilities, marketing, training, and all other day-to-day expenses to have the most detailed list. 

You can’t improve what you do not measure. You can use Pluto to get a firm grip on your expenses. Pluto allows you to monitor and control your expenses so you clearly see how much was spent in which category. 

2. Confirm Data

You’ll want to ensure all accrued expense data is accurate and can be cross-checked with receipts and inventory records. Ensuring transaction data is precise, and expense lists are free of duplicates, spelling mistakes, and other mistakes makes the entire spend management process more efficient. 

Take this step extremely seriously if your company spend practices have relied on more manual processing methods. Standardization ensures that multiple currencies, formatting differences, and other nuances are accounted for when looking at spend analysis data. 

(Goes without saying that when using Pluto this is all pre-done for you!)

3. Categorize Information

While optimal spend management brings all expenditures under a single umbrella to review, your team will still want to categorize expenses into various groups to make reviewing and making adjustments across different departments simpler. 

It’s usually best to categorize expenses in multiple ways to understand where money is going. Pluto allows you to categorize expenses both through specialized cards or just by tagging, so everything is nicely grouped together when it is review time. 

spend management strategy

4. Review Expenses

A well-thought-out process of calculating, verifying, and categorizing spending information will simplify your entire review process when you’re looking at spend data. 

You should immediately be able to spot expenses that are anomalies or recurring spending that might be able to be cut out from the start. 

Pluto’s dashboard can give you a high level but also a detailed view, so you can clearly identify trends and separate expenses.

5. Devise A Strategy

You’ll want to move decisively once you’ve identified potential changes to spending habits and department budgeting approaches. 

It might seem difficult at first glance to start reducing budgets, cutting out vendors, or make other dramatic changes to your company’s budget and expense habits. Rely on good change management practices and your leadership team to cultivate employee and stakeholder buy-in to any adjustments.

6. Practice Good Data Forecasting

Keep updating your expense data as you make a budget and spending adjustments. Doing so keeps your team on top of where funds are going and can help forecast different spending scenarios and how they might impact your business’s bottom line. 

Keeping data and information updated becomes particularly important if your expenses grow to ensure financial operations run smoothly. Don’t forget to cultivate supplier relationships if you work with different vendors for optimal inventory management.

Should You Rely On Spend Management Software? 

Manually processing expense claims, keeping up with petty cash, and tracking company credit cards can quickly turn inefficient, hinder your company’s financial management, and inhibit the overall procurement process.

In contrast, the right spend analysis solution can aid real-time expense tracking, provide easy-to-read charts and graphs of high-level expenses, and capture and store financial-related documents, so your finance team members are not scrambling to find a receipt or report. 

Pluto has a multitude of features including procurement software and account payable that will help you with spend management and make spend control much easier.

1. Flexibility

Pluto allows you to create cards for various purposes, edit spending limits on the go and monitor your expenses in real time. This allows you to scale up or down depending on what your business needs at any given moment.

2. Powerful Analytics

With Pluto, you will be able to track spending patterns and areas of high expenditure and get real-time insights into your business finances. The powerful analytics will help you make better decisions about where to allocate your resources.

3. Ease Of Use

The main bottleneck of many spend management platforms is that the employees do not use them - as it is just too time-consuming. Not with Pluto!  The sleek and user-friendly interface makes expense management a breeze.

4. Simplified Reimbursements

Receipt upload and reimbursements can be quite a burden for the team. Pluto allows you to take pictures of receipts with your phone and just add them to your reimbursements list. With the use of categories and tags, you will be able to both submit and review them in record time!

Key Takeaways For Company Spending

Spend management remains an essential component of all organizations regardless of size. Accountability for every dirham flowing in and out ensures your company maximizes revenue and remains growth-focused, no matter the budget.

You can take the first step today by relying on Pluto and processes to establish control over budgets, track spending, manage payments, cut costs, and boost your financial team’s day-to-day operations and processes.

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Procurement
November 23, 2023

Mohammed Ridwan

Top 9 Procure-to-Pay Software for Enterprises

You want a procure-to-pay (P2P) software that automates your procurement process and addresses issues like lack of visibility, double payments, and delayed approvals. However, since such a tool has multiple users at different hierarchies and a complex workflow, you often end up with a more complex process if you don’t choose the right software. 

With ad-hoc processes, many issues pop-up: employees wait weeks for approvals, procurement teams have no real-time visibility over purchase requests and don’t know how to prioritize, finance teams get minimal control over expenses, and the entire process is chaotic. Hence, choosing the right procure-to-pay solution requires a focus on ease of use and flexibility. 

In this post, we will share the best procure-to-pay software for businesses in the UAE. We will discuss how P2P software helps with procurement management and which tools are worth considering. 

What is Procure-to-Pay Software?

Procure-to-pay software is a tool to automate the complete procurement process, which combines accounts payable (AP) software and procurement software.

Instead of having your procurement processes and data scattered across emails, Jira, different task management tools, and custom ERPs, you bring it onto a single platform. 

Procure to Pay software

By moving from your legacy tools to an automated P2P software, you can:

  • automate approval workflows, making the purchase request (PR) process easier and faster. Flexible approval workflows enable all stakeholders to approve requests with a trigger-based flow. 
  • integrate with ERPs to maintain a preferred vendor list and manage order items. While most P2P software supports record-keeping only, some allow the conversion of PRs to purchase orders (PO) automatically after approval.
  • match the goods received note (GRN) to enable two-way or three-way matching and ensure proper inventory and timely vendor payments. 
  • process payments with multiple payment options to avoid delays and foster vendor relationships. It also helps avoid double payments, underpayment, or overpayment. 
  • reconcile data faster via integrations with accounting software, enabling more visibility and control. Accounting teams get the right documents, and finance teams get visibility over expenses.

Since legacy ERPs aren’t enough to manage your entire procurement process, adding P2P software makes purchasing and payments easier. 

Top 9 Procure-to-Pay Software

Here is a procure-to-pay software list for companies in the UAE: 

1. Pluto

Procure-to-Pay software by Pluto

Pluto is an all-in-one procure-to-pay solution to transform your procurement and AP processes. It sits on top of your ERP as a layer to manage the multiple stages of the procurement process. From automating PRs to setting multi-layer approval workflows and managing vendors, it is the ultimate solution to transform a chaotic procurement process into a faster and more efficient one. 

Key Features:

  • Features fully customizable workflows for raising PR and POs, requiring no technical expertise
  • Offers a flexible approval engine capable of managing intricate hierarchies
  • Enables multi-layer invoice approvals with policies to align with your company's structure
  • Ability to upload invoices easily via WhatsApp images, eliminating the need to search for invoice details. Also facilitates invoice capture via emails directly to speed up the receipt capture process
  • A centralized dashboard to gather bills in one place and track the status to avoid double payments
  • Vendor-specific corporate cards to control budgets and detect irrelevant expenses
  • Supports local and international wire transfers to make payments 
  • OCR technology minimizes manual data entry by creating and populating bills from invoices
  • Supports ERP integration to synchronize your vendors, POs, and bills and integrates with accounting software, such as Oracle, NetSuite, Zoho, Quickbooks, Wafeq, Xero, etc.
  • Integrates with payment gateways and accounting software for seamless payments and reconciliation (a feature not available in other solutions)
  • Raises alerts for upcoming payments and enables scheduling payments in advance and automate invoices 
  • Provides a complete audit trail of the process to ensure visibility at each step
  • Shows real-time analytics to facilitate deep insights for supporting budget control

Pricing: 

Request the sales team for a custom quote

Pros:

  • More financial control with vendor-specific corporate cards 
  • Better Forex rates than most local banks 
  • Multiple integration options including Netsuite, Dynamics and more

Cons:

  • Slightly longer on-boarding due to unlimited corporate purchasing card offering 
  • Directly integrates with all other major ERPs except Tally

2. Order.co

Procure to pay solution by Order

Order.co is a procure-to-pay platform that provides you access to over 15,000+ vendors in addition to your preferred vendors. It acts as an online marketplace like Amazon or eBay to help you procure items for your business. You add items to the cart, and it enables a rule-based approval system for POs with complete control and visibility. 

Key Features:

  • Provides a custom, pre-approved Order.co catalog, including your current vendors and a vast network of 15,000+ vendors
  • Supports purchases from multiple vendors regardless of their ordering methods (API, website, email)
  • Sources the best prices for your needs to automatically generate POs and set up recurring orders to save time and reduce manual errors
  • Offers real-time budgeting and reporting insights by the user, location, cost center, or vendor
  • Simplifies payment processing by consolidating all orders from multiple vendors into one monthly invoice

Pricing:

Dependent upon locations and usage; contact hello@order.co for pricing information

Pros:

  • Customizable product lists for ordering 
  • Easy-to-create customizable workflows
  • Ability to categorize purchases and run reports

Cons:

  • Set up is confusing and requires customer support help
  • Can not order from multiple vendors at the same time

3. Yooz

Procure to pay platform by Yooz

Yooz optimizes the procurement process by focusing on invoice management.  It is suitable for mid-size companies of all sectors wanting to automate procurement with a cloud-based procure-to-pay solution. It uses artificial intelligence (AI) and machine learning (ML) technologies to enhance security and control in their account payable automation software.

Key Features:

  • Enables online, real-time management of supplier relationships, improving communication and collaboration
  • Provides mobile access for invoice approval and communication
  • Maintains regulation-compliant traceability, ensuring adherence to relevant laws and standards
  • Automates real-time general ledger (GL) coding and PO matching
  • Captures all types of documents through various channels, such as email, drag and drop, mobile, scan, and secure file transfer protocol (SFTP)
  • Integrates with accounting software and ERPs
  • Allows users to approve and pay invoices in batches, offering multiple payment options, such as virtual credit card, ACH, e-check, and paper check
  • Offers a range of services, including consulting, configuration, training, and user support

Pricing: 

Free trial for up to 15 days followed by a "pay-as-you-use" model. Also offers “gold edition” subscription pricing (based on the volume of documents) for an unlimited number of users and 4 hours of complimentary service

Pros:

  • Integrates with Sage Intacct
  • Ability to tag people in the comments and email them directly from the invoice
  • Numerous criteria available for setting up the approval workflows

Cons: 

  • Doesn’t offer payment services in the UAE, so you need to carry out payments on a different platform
  • Doesn't have integrations with major vendors as a form of punchout
  • Time-consuming to download and export files
  • Hard for vendors to send the invoices through Yooz

4. Kissflow

Procure to pay solution by Kissflow

Kissflow simplifies and enhances procurement processes while ensuring transparency and compliance. It helps users automate the entire process without requiring technical expertise or coding experience. It comes with 50+ ready-to-use applications, enabling unlimited automation applications.  

Key Features:

  • Offers fluid forms to enable easy capturing, approval, and tracking of PRs
  • Allows users to register and maintain vendors with access to multilingual catalogs
  • Integration with accounting systems, ERPs, and finance systems like Quickbooks, SAP, and Microsoft Dynamics 
  • Accelerates the invoice approval process with timely alerts and automated checks. Connect invoices to contracts, POs, and service entry sheets in a single dashboard
  • Customizable reports to visualize data using charts, filters, and heatmaps
  • Ability to define and manage budget restrictions with dynamic rules throughout the entire procure-to-pay lifecycle
  • Customized approval workflows to ensure transparency with rule-based approval processes
  • Smart alerts that provide real-time updates on the status of POs and invoices to keep stakeholders informed 

Pricing: 

Starts at $2499/month (billed annually). Pricing varies based on transaction volume and number of users

Pros: 

  • Intuitive interface with a relatively short learning curve

Cons:

  • Does not support payment flows in the UAE
  • Cost of its license is high (particularly for SMBs)
  • Can not handle intricate processes that require a high degree of customization or involve multiple conditional branches
  • Customization options are limited, including specific integrations, advanced business rules, or more sophisticated automation capabilities

5. Coupa

Procure-to-pay software by coupa

Coupa is a cloud-based automation platform to manage procurement processes. It facilitates supply chain optimization by providing visibility and control. It brings consumer shopping ease to the procurement process. With a focus on user adoption, it provides an intuitive shopping experience for employees, making it easier to adhere to pre-approved spending guidelines.

Key Features:

  • Simplifies procurement by allowing organizations to track pre-approved spending and get real-time visibility into POs and order lifecycle
  • Maximizes pre-approved spend to offer complete visibility over the purchase-to-pay processes
  • Promotes user adoption at all levels with an easy-to-use interface, creating value for both employees and vendors
  • Provides a centralized platform within Coupa Procure, allowing easy comparison of items across multiple vendors
  • Offers real-time budget management with budget meters, allowing organizations to assess budget sufficiency before committing to spending
  • Employs AI and machine learning to detect errors and fraud across business spend
  • Enables quick notifications of disruptions and allows vendors to confirm availability, minimizing unplanned downtime
  • Provides real-time visibility into inventory availability, helping organizations reduce redundant and wasteful spending

Pricing: 

Request the sales team for a custom quote

Pros:

  • Several categories and filters in the analytics section to streamline data
  • Chat option enables approver and claimant to discuss issues with receipts
  • Enables setting up of customized approval chains and including additional new approvers  

Cons:

  • Lots of unnecessary notifications, making it difficult to select the ones that need action or comment
  • Low receipt searchability, making retrieval time-consuming
  • Inconsistent syncing of remit-to address from NetSuite
  • Complex to implement and not intuitive, forcing admins to spend more time resolving employees' queries
  • Slow customer service 

6. Esker

Procure to pay platform by Esker

Esker is a cloud-based automation procurement software. It helps you optimize procurement processes and collaborate strategically with your vendors. With the ability to integrate across various company departments, it simplifies user adoption while facilitating visibility and control.

Key Features:

  • Facilitates approval mechanism and GRN matching for each PR and invoice 
  • Offers real-time analytics, enabling you to maintain tighter budget controls
  • Gives access to products from preferred vendors, aligning purchases with company procurement policies
  • Provides a self-service portal, facilitating supplier onboarding, catalog management, and invoice status access
  • Customizable dashboards to manage daily tasks, monitor productivity, and identify issues and opportunities as they arise
  • Enables you to customize the interface with your company's corporate identity, enhancing the supplier's ability to identify and engage with your organization seamlessly

Pricing: 

Contact sales for pricing

Pros:

  • Contains filtered views to allow for focused priorities 
  • Auto-sends payment reminders

Cons:

  • Gets expensive with each customization implemented
  • Doesn’t allow unused/old customer accounts to be deleted
  • Integration with accounting software isn't seamless 
  • Approval workflow requires a manual trigger to start

7. PayEm

Procure to pay software by PayEm

PayEm offers a procure-to-pay solution, covering everything in one place to replace your traditional procurement process. With a core focus on processing PR, it simplifies the creation of POs with custom forms and approval workflows. It facilitates collaboration between procurement and finance teams to enhance visibility and control. 

Key Features:

  • Offers custom request forms equipped with conditional logic to ensure a user-friendly experience
  • Provides fully customizable automated approval workflows based on factors like amounts, subsidiaries, and stakeholders
  • Integrates with communication platforms like Slack and email, allowing request tracking and approvals
  • Consolidates all the requests and approvals, simplifying discussions, document sharing, and creating an audit log
  • Enables real-time updates and clear overviews of request statuses, minimizing the need for follow-up inquiries
  • Offers OCR technology for invoice processing
  • Syncs with your ERP and enables exporting reconciled transactions and uploading them to your ERP 
  • Automates vendor management with payment scheduling, funds transferring, and limits setting for each vendor

Pricing: 

Request a custom quote

Pros:

  • Multiple virtual credit cards for different vendors
  • Supports global transactions 

Cons:

  • Some vendors don't accept PayEm cards
  • High transaction clearing time 
  • Limits the user to either a virtual or physical card at one time 

8. Pipefy

Pipefy Procure to pay platform

Pipefy is an automation procure-to-pay tool to manage end-to-end procurement processes, from PR to paying vendors, to create a frictionless experience. It aims to break silos between teams to simplify purchase and AP. 

Key Features:

  • Allows you to create and customize workflows, from purchase requisition to supplier management
  • Provides secure portals where records and documents can be organized, ensuring that all information is easily accessible, especially during audits
  • Ensures compliance with custom forms that include required fields to accelerate POs
  • Enables access to real-time insights to help you forecast ideal quantities and vendors for requisitions
  • Evaluates your processes, delivering reliable data to enable strategic and data-driven decisions
  • Integrates with your existing ERPs and accounting systems, such as NetSuite, Oracle E-business Suite, QuickBooks, Sage Intacct, etc.  
  • Enables deadline alerts, approval flows, and information exchange to prevent late fees and cashing in on early payment discounts
  • Offers a customizable dashboard to streamline vendor registration, updates, onboarding, and contract management

Pricing:

Offers three packages starting with a free option for smaller teams, and a subsequent model that costs $20 per month per user and $34 per month per user. Also, offers an enterprise plan with custom pricing

Pros: 

  • Offers templates for organizing processes

Cons:

  • Complex sign-up process
  • Workflows aren’t flexible with difficulty with respect to adding new users and making changes 
  • Difficult to import data and search in the database for information

9. Procurify

Procure to pay software solution by Procurify

Procurify speeds up the procurement process, enhances internal communication, and reduces financial risks. It is an easy-to-implement tool that saves time for finance and operations teams. From catalog management to custom user controls, it helps to track the procurement process in real time. 

Key Features:

  • Tailors POs to match your internal processes and vendor expectations
  • Creates, tracks, and maintains an audit trail of all procurement transactions for transparency and compliance
  • Enhances financial controls by enabling PO-based purchasing
  • Ensures that requested items are approved against budgets before procurement
  • Syncs PO with your accounting system or ERP, whether via API, CSV, flat file, or direct integration
  • Integrates with trusted vendors through punchout catalogs to streamline the ordering process
  • Enables blanket PO, which involve making multiple purchases against a single PO, even when details of future purchases may be unknown
  • Provides PO workflows to save on shipping costs, unlock vendor discounts, and reduce paperwork 

Pricing: 

Starts at $2000/month with a custom pricing tier

Pros:

  • Easy-to-make amendments in the original PO
  • Enables ordering from multiple websites for resources, including Amazon
  • Makes it easy to upload documents to support expense and order reports

Cons:

  • Doesn’t offer payment services in UAE, so you will need to carry out payments on a different platform
  • Doesn’t cater to the UAE market, and does not support UAE-specific workflows such as VAT management
  • Cannot edit orders once they are approved
  • Cannot see the order history for a catalog item without running a report
  • Physical inventory has to be tracked outside Procurify

Which Procure-to-Pay Software Should You Pick?

Don’t choose a platform that offers the maximum functionality. Instead, choose the one that is user-friendly and flexible. 

Procurement is already a complex process that requires visibility by different stakeholders. Choosing a tool that offers visibility and accommodates complex business needs will help you transform your chaotic procure-to-pay process

If you want to get started, book a demo, and our team will help you identify the bottlenecks and make the entire process simpler and manageable.

Disclaimer: The comparisons and rankings of procure to pay software competitors in this article are based primarily on reviews found online. While we strive to provide accurate and up-to-date information, these reviews are subjective and reflect the opinions of the users who posted them. The information presented is intended for general informational purposes and should not be considered as a definitive guide for choosing a software provider. We encourage readers to conduct their own research and consider their specific needs before making a decision.

5
All
Procurement
November 15, 2023

Mohammed Ridwan

Top 7 Accounts Payable Software in 2024

Processing bills is the most difficult part of procurement. 

Bill payments are often mistakenly duplicated, goods aren’t received as per purchase orders, or there are delays in the approval workflow. 

An accounts payable software makes the process hassle-free by automating approvals and payments and giving more visibility and control over your accounts payable (AP). It also enhances reconciliation and improves vendor relationships. 

While the core job to be done by an AP manager is to ensure good vendor relationships, manage between timely payments & cash flow, ensure compliance in payments, what you need is a solution that supports your organization’s finances in one place and ends the chaotic back and forth. 

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What is Accounts payable software?

Accounts payable (AP) software is a tool that helps businesses automate invoice and vendor payments via a centralized platform. An accounts payable automation software brings together all the key information into a single source of truth and enables teams to do the following:

  • Tracks bills and their statuses to avoid double payments
  • Enables two-way and three-way goods received note (GRN) & PO matching 
  • Supports customizable approval workflows for complete visibility
  • Supports local and international payments via various payment methods

Thus, AP software simplifies the payment processes and reduces unnecessary friction between finance, procurement & other teams. 

Top 7 accounts payable software in 2024

Here are the top 7 AP platforms for businesses. 

Based on your company size and needs, you can pick one of these to support your accounts payable.

1. Pluto

Accounts payable software by Pluto

Pluto is an accounts payable software that transforms your AP processes by simplifying bill processing. From enabling GRN matching to setting fully customizable multi-layer approval workflows, it is the best accounts payable solution to manage your vendor payments and relationships. 

Key features:

  • Facilitates three-way GRN matching with purchase orders and item-based matching
  • Consolidates approved invoices in a single window to highlight pending bills and avoid delays
  • Offers a flexible approval engine capable of managing intricate hierarchies without requiring technical expertise
  • Enables multi-layer invoice approvals with policies to align with your company's structure
  • Ability to upload invoices easily via WhatsApp images and emails directly to speed up the receipt capture process
  • A centralized dashboard to gather bills in one place and track the status to avoid double payments
  • Vendor-specific corporate cards to control budgets and detect irrelevant expenses
  • Enables creation of a preferred vendors list for quick payments 
  • Supports local and international wire transfers to make payments 
  • OCR technology minimizes manual data entry by creating and populating bills from invoices
  • Supports ERP integration to synchronize your vendors, POs, and bills and integrates with accounting software such as Oracle, NetSuite, Zoho, Quickbooks, Wafeq, Xero, etc.
  • Raises alerts for upcoming payments, enables scheduling payments in advance and automates invoices 
  • Provides a complete audit trail of the process to ensure visibility at each step
  • Shows real-time analytics to facilitate deep insights for supporting budget control

Pricing:

Request the sales team for a custom quote.

Pros:

  • Enables branch- and subsidiary-level spend tracking (not offered by other platforms)
  • Offers up to 2% cashback on all non-AED transactions 
  • Independent PCI DSS Level 1 certification
  • SSO/SAML Capabilities for Enterprises
  • Integrates with Netsuite, Microsoft Dynamics
  • Better Forex rates than most local banks 
  • Multiple integration options

Cons:

  • Integrates with all other major ERPs except Tally
  • Slightly longer on-boarding due to corporate card offering 

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2. Tipalti

Accounts payable solution by Tipalti

Tipalti is an automation tool that supports end-to-end AP processes. It helps you streamline accounts payables and make global payments in local currencies for various recipients, from suppliers to freelancers. The cloud-based platform helps finance teams manage payments without losing visibility and control. 

Key features:

  • Supports supplier onboarding and vetting to ensure supplier reliability and trustworthiness
  • Integrates with ERP and accounting systems to help with reconciliation reporting
  • Uses OCR to scan, capture, match, and process invoice data to reduce manual errors
  • Provides built-in approval workflows and payment scheduling 
  • Offers invoice processing, including two-way and three-way PO matching and approval to avoid overpayments
  • Assists AP processes for subsidiaries and entities

Pricing:

Starts at $129 per month per user for the platform fee and charges for additional features separately.

Pros:

  • Can manage supplier bank account details in a secure environment

Cons:

  • Cannot use it for prepayment invoices on inventory purchases with the ERP system
  • High foreign currency exchange fees
  • Tax forms can be difficult to fill out and very difficult if you do not speak English

3. Airbase

AP solution by Airbase

Airbase is an automation solution for managing global AP processes. It focuses on ensuring compliance and syncing with your accounting tool to streamline the payment process. 

Key features: 

  • Offers OCR to populate details, including general ledger (GL) category, date, amount, and purpose
  • Supports onboarding with a self-service vendor portal and custom questionnaires
  • Has a centralized dashboard with all key information about the invoice to avoid friction 
  • Accepts invoices from email or vendor portal across all subsidiaries
  • Offers automated approval workflows based on multiple parameters, such as vendor, amount, GL category, etc.
  • Enables three-way invoice matching to ensure compliance and reduce wasted spend
  • Facilitates payments and approvals, including multi-subsidiary support, international currency, and real-time GL sync
  • Real-time audit trail with receipts, notes, and documentation for transparency

Pricing: Request a custom quote.

Pros:

  • Intuitive and easy to use; no training or previous knowledge required
  • Seamless approval workflows

Cons:

  • The mobile app is slow and takes time to load pages 
  • SSO-based login is not smooth
  • Not suitable for complex branch-level approvals and expenses

4. Ramp

Ramp's Accounts payable platform

Ramp is an accounts payable solution designed to manage payments and business expenses. It automates bill entries, approvals, and payments while offering complete visibility and control. By tracking each AP step from data recording to approvals, it simplifies payment processing and takes the burden off teams. 

Key features:

  • Uses AI to automatically extract key details from invoices to offer accuracy and eliminate data-entry errors
  • Identifies duplicate invoices and helps with two-way matching to purchase orders
  • Offers custom approval workflows to minimize errors and ensure timely payments 
  • Provides a unified dashboard with visibility into the status of invoices
  • Consolidates multiple payment options, such as check, card, same-day ACH, or international wire
  • Integrates with accounting solutions, such as QuickBooks, Xero, Oracle NetSuite, Sage, etc. for auto-sync bill pay transactions
  • Supports international payment processing in multiple currencies 
  • Tracks vendor data and transactions for easy reporting and data-driven decisions

Pricing:

Three pricing packages—free or basic features, $15 per user per month for Ramp Plus, and custom quote for enterprises with features like enterprise ERP integration, custom implementation, and local card issuance. 

Pros:

  • Works with multiple subsidiaries
  • Offers cash back on credit card purchases made using VISA cards

Cons:

  • Can’t unmatch an incorrectly matched invoice (invoice to credit card)
  • Approval routing can only be set on the vendor level, not department level
  • Limitations in syncing repayments

5. Bill

Accounts payable software by Bill

Bill is a spend management solution for SMBs to control payables, receivables, expenses, and all corporate expenses. It allows businesses to streamline scattered AP processes into a single platform and gain more control over their finances. 

Key features:

  • Enables tailored approval processes to facilitate approvals with minimal hassle
  • Automates purchase order workflows with the option for automated two-way and three-way matching
  • Simplifies expense reconciliation through quick coding and integration with accounting systems
  • Automates receipt matching, categorization, and expense reporting, decreasing administrative tasks
  • Syncs with all major accounting systems like QuickBooks, Sage, Intacct, and NetSuite
  • OCR auto-populates invoices for data entry
  • Provides bulk payments of approved invoices with payment choices, such as ACH, credit cards, checks, and international wire transfers
  • Offers audit trail of any changes or actions related to the invoice on a single page

Pricing: Provides a free trial and essentials pack starting at $45 for six standard user roles. Its team and corporate pack are for $55 and $79, respectively. Enterprises need to request a custom quote.

Pros:

  • One-click swift payments
  • Minimum training required
  • Easy-to-use mobile app

Cons:

  • Customer support is difficult to initiate, slow, and unresponsive
  • Frequent changes in the interface create confusion for users
  • Limited customization options for reporting 

6. Melio

AP Software by Melio

Melio is a bill payment tool that enables businesses to pay via bank transfer and debit cards. Even when the vendor accepts only checks, it pays checks on your behalf to facilitate bill processing. It processes payments and issues checks without the payee having to use the platform. It is a tool suitable for small businesses to process payments without hassle. 

Key features:

  • Enables payments via credit card even when the vendor doesn’t accept the card to support deferred payments
  • Allows inviting additional users (such as accountants) to set up roles and permissions and manage approvals easily
  • Supports two-way sync with QuickBooks and Xero
  • Facilitates bulk payments and split payments (splitting bills into multiple payments) 
  • Offers international payments across the border 
  • Raises duplicate payment alerts to assist in fraud detection

Pricing:

Free to process ACH payments to vendors; charges a fee for other payment modes (check Melio pricing)

Pros:

  • Offers a free-to-use payment module (only with QuickBook)

Cons:

  • Lack of integration with accounting software
  • Turnaround time on a check is three business days 
  • Support is very limited
  • Limits payments to two checks per month 

7. Spendesk

Spendesk: Accounts payable platform

Spendesk automates the AP process by bringing together purchase orders and invoices to facilitate budgets, payments, and approvals. It creates a single source of truth to cut hours of manual work and detect errors better. It is a cloud-based software that improves budget control and financial reporting. 

Key features:

  • Offers a centralized platform for tracking payments right from the purchase order stage 
  • Supports invoice capture via email and image/file upload
  • Uses OCR to extract key information from the invoice, such as supplier name, amount, dates, and purchase details
  • Enables budget changes in real time without a manual data-entry system
  • Allows scheduling of payments and matching of purchase orders with the invoice for effective GRN matching
  • Provides customizable and built-in approval workflows and controls to monitor spending 
  • Raises alerts for duplicate invoices to enable teams to avoid overpayments and defect frauds

Pricing:

Request a custom quote.

Pros:

  • Super convenient for ad-hoc expenses 
  • Intuitive and interactive interface
  • Easy manual upload in case OCR doesn’t support receipt capture  

Cons: 

  • Glitchy virtual card payments with delayed notifications and declined transactions
  • OCR-based receipt capture only works for emails
  • Basic features like memorizing accounting patterns for vendors are only available in the paid module

What are the benefits of accounts payable software?

Adopting AP software helps you in the following ways: 

  • Gives real-time visibility into the status of invoices and payments
  • Provides insights into spending patterns, vendor performance, etc.
  • Streamlines payment and approval workflows, leading to smoother payment processes and vendor relationships

How to choose a good accounts payable Software

Ease of use

The AP software must be flexible to accommodate complex hierarchies without making it difficult to follow the workflows. It should offer trigger-based workflows and a clean user interface. Your team shouldn’t struggle to learn how to use the product and rely on the support team to get basic invoices cleared. 

Multiple payment options

From local transactions to international wire transfers and other digital payment options, AP software must support multiple payment options. It becomes easier with vendor-specific cards that make payments safe and fast. Pluto helps you set up vendor-specific cards, even for public relations officers. This is something most platforms on the market do not support.

Accurate data capture

AP software with OCR capabilities makes invoice processing faster and reduces errors. The ability to process invoices from different platforms and sources, such as emails, Slack, and WhatsApp, is required. Moreover, moving these captured invoices into the centralized database and syncing with accounting software eliminates the manual data entry task.

Approval workflow

Approval workflows are key for timely and accurate payments. An AP software must have a simple no-code workflow builder, even for complex hierarchies. This is especially useful for large organizations where this process can be intricate and long. 

Integration

Vendor payments need to be recorded across accounting systems for effective reconciliation. The AP software must integrate with your accounting systems and platforms to automate data entry and facilitate a synchronized record-keeping system.

Centralized dashboard

The AP software should offer a dedicated dashboard with all the key information such as vendor, invoice number, status, description, etc. Also, it must give a separate centralized view for expense tracking. This gives you visibility into where you spend the most and helps you optimize resource allocation. 

Supports GRN matching

The AP software interface must be designed in such a way that it supports GRN matching, both two-way and three-way matching. Be it in the form of OCR invoice capture or offering item-based matching capabilities. This will avoid any under- or over-payments and support a healthy vendor relationship. Also, this eliminates complications in the reconciliation process.   

Reporting 

Reporting capabilities of AP software help to identify the spending patterns and other key insights related to department-specific expenses, budgeting, etc. Hence, AP software must provide a dedicated reporting dashboard with the option to export the reports for enhanced analytics and reporting. 

Transforming Accounts Payable with the Right Software

Accounts payable is not just about clearing bills and vendor payments. It is the basis for vendor relationship management and proper order in financial processes. From getting approvals to matching GRN, you need software that offers ease of use with the right blend of functionality. 

Too complex of a product will leave your employees confused, leading to double work. Lack of customization will have teams work harder to adopt the product. Limited integration will have the accounting department working twice as much on data entry and syncing. 

Make the right decision and choose software that gives you control, customization, security and speed, all while embracing automation capabilities. 

Book a demo and discover how a simple automation tool transforms your AP process.

Disclaimer: The comparisons and rankings of accounts payable software competitors in this article are based primarily on reviews found online. While we strive to provide accurate and up-to-date information, these reviews are subjective and reflect the opinions of the users who posted them. The information presented is intended for general informational purposes and should not be considered as a definitive guide for choosing a software provider. We encourage readers to conduct their own research and consider their specific needs before making a decision.