How To Manage Your Company Spending In 2024?
When it comes to growing a business, many executives focus on increasing profits and growing revenue as the way to achieve their goals.
However, one aspect of growth that is sometimes overlooked is the expense management of your organization, and how to make it more efficient.
Without proper spend management strategies, your efforts to grow the company revenue could be easily sabotaged by overstuffed budgets, inefficient spending, and a lack of expense tracking that hurts your bottom-line when tax season comes around.
That’s why this article will discuss the importance of managing your company spending, and how to do it efficiently!
The Importance Of Company Spending Management
Business spend management is a combination of strategies and business tools used to track, analyze, and manage business spending, in particular in regard to supplier relationships.
When companies are unable to track and control their spending in real-time, they may expose themselves to financial leaks and lose revenue in the long run.
The majority of a company's costs come from external expenditures, which account for 40-80% of its total costs. A lack of efficient spend management can have disastrous effects on your business; the statistics speak for themselves.
As a result, businesses that understand and wish to mitigate this risk need to use spend management software to do the heavy lifting. Not only does the software offer cost-saving opportunities, but it also prevents overspending.
A spend management solution becomes particularly crucial when it comes to tax reporting, as the expense documenting process simplifies the tax reporting, which makes it easier to receive tax breaks and avoid hefty penalties.
For the United Arab Emirates region, corporate income tax (or CT for short) will be applied to business activities starting on the 1st of June 2023. You’ll be charged 9% for taxable income exceeding AED 375,000, but 0% if your annual taxable income falls below that threshold. As such, keeping track of your expenses and managing spending will be even more important than ever.
Benefits of Expense Management
The importance of spending management is not limited to enterprises with large expenses, but also to small and medium-sized businesses looking to improve profitability, scalability, and sustainability.
There are several benefits to spend management automation, regardless of your business size. These benefits include:
An in-depth analysis of all spending
Saving money for your business requires analyzing all aspects of it in order to find cost-cutting opportunities or other areas of improvement.
Pluto gives you a general overview of your operations in terms of costs, as well as an in-depth analysis of your spending, making it much easier to find what you are looking for.
Maintaining an efficient budget
When it comes to proper spend management, your budget is crucial. But building a proper budget requires that you have both an eagle-eye view of your business, as well as attention to the smaller details. This is made much easier through the use of spend management software.
Control over company spending in real time
It’s much harder to make efficient decisions about your spending when you are basing them on data that is already outdated.
With Pluto, you’ll be working with real-time data to ensure your decisions are based on current information.
An easier time identifying and eliminating out-of-policy and fraudulent expenditures
It’s harder to reduce out-of-policy spending when you can’t track it effectively. Pluto will help you automatically detect fraudulent and out-of-policy employee expenses and alert you to them.
Payables can be tracked and processed easily
If you are managing your expenses properly and using the right account payable software to do so, you won’t have an issue keeping track of your payables, as well as have a better overview of your spending.
Better negotiations with your suppliers
You can make better decisions when it comes to your supply contracts and purchases when you have real-time data of your expenses.
Using Pluto's unified spend management dashboard, finance teams can always see where money flows. Pluto's procurement software enhances the visibility of financial transactions, enabling more informed decision-making for procurement and sourcing processes.
Budgeting is the key to delivering on your promises, growing your team, enhancing your product offerings, and weathering inevitable economic downturns.
The Problem with a Manual Spend Management Process
Trying to manage business spending without proper oversight and strategies in place is like putting all your home expenses on a credit card without checking the statement every month. You might not know what you are facing until it’s too late.
If you don't implement intentional spend controls, you may still be profitable, but you won't know when your situation will change or how close you are to the edge.
The importance of spend control becomes more obvious to companies, especially growing ones, after they face a tight situation or a disruption to their business. As a result of these problems, businesses can experience budget overruns, erratic cash flows, supply chain management issues, and deteriorating customer relations.
But traditional spend management techniques are limited, which is where the aid of software comes into place. If you limit yourself to manual spend management strategies, you might face the following issues:
- Outdated spending reports: Traditional methods of managing spend tend to produce spending data that is at least a month old. As a result, finance teams have difficulty identifying and correcting unnecessary spending before the damage is done.
- Overspending: Overspending and budget noncompliance are a consequence of finance teams being unable to track real-time spend. Costs like these can quickly add up to cause trouble for tax authorities as well as overspending.
- Inefficient strategies due to lack of real-time data: If you lack real-time data and work only based on reports that are outdated, you might be missing the forest for the trees. This could have the effect of optimizing your spending rather than improving your overall business process efficiency. In order to cut costs and optimize operations, real-time spend data is essential.
- Manual entry errors: Data entry errors skyrocket if your finance team has to move data between multiple software programs and map employee spending manually. As a result, financial reporting could be delayed.
- Issues with remote working and compliance: Employees who work remotely need to pay for other business expenses quickly and in accordance with compliance requirements. The traditional spend management system, with its shared corporate cards and lengthy approval processes, simply cannot keep up.
- Strained resources: It takes finance teams a long time to manually align expenditures to budgets after the expenditures have been made. This takes up many productive hours and, of course, can lead to errors when entering data.
How To Manage Company Spending
Managing your company spending is both a science and an art, but much more the former than the latter.
Each business will have its own unique challenges to overcome when it comes to spending, but there’s still general strategies you can adopt that will fit most situations.
Create a Budget that Accounts for the Future
When it comes to budgeting, you shouldn’t just think about the expenses in front of you, you also have to consider potential unexpected expenses.
If you limit yourself to budgeting for the present, you’ll have a hard time dealing with expenses that can pop up out of nowhere.
Your budget should be realistic, but also reviewed frequently to ensure it is still appropriate for your business as it grows and evolves.
Creating a good budget will require that you examine your current and past expenses, take a look at your spending habits, and consider your potential expenses as your business grows.
This will give you an opportunity to review your existing processes, expense policies, and track expenses that you might not be thinking about.
Use Zero-Based Budgeting
It’s not uncommon for organizations to focus on past expenses and budgets when creating a new one.
However, businesses and the environments around them change, and so budgets need to change as well.
That is where zero-based budgeting comes in. This technique creates a new budget from scratch for each budgeting period. The budget is then compared to past budgets and weighed against current expenses.
In a company, zero-based budgeting can be used to keep your expenses under control. Your budget needs to be a living breathing element of your operation, and as such you need to constantly evaluate it to find realistic cost-cutting opportunities and areas that can be made more efficient when it comes to expenses.
Report and Track Your Expenses
Any expenses incurred should be documented and filed as soon as possible. This way, your business expenses are accounted for when filing its tax return. This is one area where the use of spend management software becomes crucial, as it dramatically simplifies the process of reporting and tracking your expenses. Pluto helps to categorize said expenditure, further assisting you when it comes to tax season.
Use a Spend Management Platform to Automate Processes and Digitize Expenses
As your business grows, you’ll find that using a spend management tool to track your expenses saves you a lot of time and money. In addition to tracking expenses, it tends to offer many other features, such as the ability to track invoices, payments, and credits all in one place.
Furthermore, Pluto gives you the ability to assess your expenses on the go, thanks to mobile apps and online dashboards.
It is easier to keep track of your expenses and receipts by digitizing them. Employees can do this by taking pictures of their receipts as soon as they receive them. These images can then be uploaded and tracked through Pluto.
Automating your approval workflows and processes will help to reduce, if not outright eliminate, human error.
Key Spend Management Software Features
Using spend management software is almost mandatory if you want to make your spend tracking and reporting as efficient as possible.
When looking to choose a platform, consider the following features:
Complete Control Over Spending Data
If your finance teams don’t have complete control over spending, real-time data cannot be of much use to your business.
Pluto allows your business finance managers to streamline and automate processes with superior customizability and control over workflows.
This freedom allows admins to change or optimize workflows as business/processes scale.
Real-time and in-depth spend analytics
Managing company funds efficiently is the essence of spend management. In order to do that, you need to keep track of your employee expenses as they occur.
Pluto records employee expenditures in real time and provides you with a reliable picture of what they are spending.
You can control expenses by using real-time expense tracking without restricting your employees’ work.
Additionally, Pluto provides your finance team with insights and analytics based on all the data it gets. A feature like this is crucial for proper management, especially if your goal is to cut costs and optimize spending through automation.
Your finance team will struggle to drive meaningful change without detailed analytics, requiring them to go through reams of data and make sense of it.
Reports on expenses provide an overview of your expense history, making it easier to track down individual purchases. Maintaining accurate records, limiting expenditures, and avoiding fraud are all made easier with this functionality.
Easy to Use
The most advanced software in the world is worthless if no one wants to use it. Simplicity and ease of use of essential business software, such as spend management, should therefore be a priority.
You might find, for instance, that employees don't use your spend management software if they find it clunky and difficult to use. This can result in a manual spend reporting process that is time-consuming and error-prone.
A lot of time is spent by businesses storing and processing invoices, receipts, and purchase orders.
Pluto makes it easy to retrieve and keep track of essential documents, including matching documents to authenticate transactions, for record keeping and due diligence.
An all-in-one platform
Your spend management platform should be a centralized solution for all your spending needs. Keeping all company spending in one place, in real time, is more efficient (and more secure) than using multiple smaller tools.
Pluto has it all:
- Unlimited virtual cards
- Spend management platform
- Real-time analytics
- Real-time spend control
Essentially, anything that will allow you not only manage your expenses, but really take you spending under control and make sure that everything is at it's maximal eff
Key Takeaways
Managing your company spending is a crucial aspect of company growth that is sometimes overlooked. Proper spending management strategies can help you find cost-cutting opportunities, gain a better overview of the health of your business, and simplify your tax reporting to avoid penalties.
When it comes to developing effective spending management strategies, you should focus on creating a budget that can evolve with your organization, reporting and tracking your expenses in real time, and using a spend management platform to automate and simplify your expense tracking and reporting.
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At Pluto Card, our mission is to assist businesses of all scales make well-informed choices. To uphold our standards, we follow editorial guidelines to guarantee that our content consistently aligns with our high-quality benchmarks.
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•
Mohammed Ridwan
How Corporate Fleet Cards Help Modern Transport & Logistic Businesses
Companies use petty cash for managing driver and transport expenses, including maintenance, repairs, and small purchases, by allocating a small amount of physical cash to drivers. Drivers submit receipts for reconciliation, and they manually track these small transactions.
However, tracking numerous trivial transactions becomes time-consuming, and discrepancies emerge during reconciliation. There's always a risk of misuse or theft, demanding strict security measures. Moreover, negotiating favorable terms with vendors for minor, recurring transactions becomes challenging. They must carefully budget and maintain a sufficient petty cash fund, which strains their overall cash flow.
Overall, the manual process raises efficiency concerns, necessitating a balance between control and practicality in managing day-to-day vehicle-related expenses.
A better alternative to petty cash is a fleet card.
This post will explore corporate fleet cards, their benefits for transport and logistics, and strategies to overcome potential fuel card challenges for improved spend management.
What Is Meant by Fleet Card?
A fleet card, also known as a fuel or gas card, is a specialized payment card used by businesses to cover expenses related to their vehicle fleets. It is issued by fuel companies or financial institutions specifically for fuel purchases, maintenance, and other vehicle-related expenses.
What Can Fleet Cards Be Used For?
The fleet cards are primarily used for fuel purchases, maintenance, and repairs. They facilitate seamless payments for routine servicing, tolls and parking fees, and purchasing vehicle-related products.
You get cards with custom spending limits and advanced controls, such as real-time transaction monitoring mechanisms, category-specific restrictions, and automated alerts for enhanced security and streamlined expense management.
Drivers purchase fuel, maintenance, and other vehicle-related expenses at authorized locations with the cards, and you enjoy complete visibility on a centralized dashboard for each transaction.
What Are the Benefits of a Corporate Fleet Card?
Switching from manual petty cash management to a fleet card yields the following benefits:
- Simplifies payment processes by reducing the complexity of cash handling
- Improves tracking and monitoring of all vehicle-related expenses
- Minimizes the risk of theft or misuse, providing enhanced security measures
- Automates the expense management and reconciliation process, eliminating manual record-keeping and ensuring accuracy with reduced likelihood of errors
- Promotes compliance by enabling you to set controls and restrictions on card usage according to company policies
- Enhances budgeting by providing detailed reports and insights into the spending patterns for a structured and controlled approach to managing vehicle-related costs
- Streamlines transactions with vendors, offering an efficient payment method for small, frequent transactions
Should I Use a Fuel Card or a Credit Card?
Fuel cards and credit cards share similarities in providing a convenient payment method for expenses. Both can be used at gas stations and offer detailed transaction records for monitoring expenditures. Moreover, both cards come with features such as spending controls, reporting tools, and rewards programs.
However, here are some differences between the two:
- Fuel cards restrict card usage to fuel and maintenance-related purchases, providing greater control and limiting potential misuse.
- Fuel cards come with fuel discounts or rewards programs at specific gas stations, providing potential cost savings that credit cards do not generally offer.
- While credit cards provide transaction records, fuel cards offer more detailed reporting on vehicle-related expenses like fuel consumption, maintenance costs, and odometer tracking.
- Fleet cards partner with fuel providers, service centers, and other vendors, allowing businesses to negotiate favorable terms and discounts for bulk purchases or regular transactions. For instance, a fleet card's partnership with a fuel station yields discounted fuel prices, facilitating substantial cost savings.
So, for transport and logistics businesses, corporate fleet cards offer specialized controls for fuel and maintenance, streamlined reporting, and potential fuel-related discounts.
What Are the Risks of Fuel Cards?
Fuel cards, tailored for fleet management, are designed to address the unique needs of companies in the transport and logistics sector. However, organizations face the following challenges when switching to corporate fleet fuel cards:
1. Gas Station Availability Issues
Fuel cards encounter challenges related to gas station availability that limit refueling options. As a result, drivers can not find suitable gas stations, leading to increased travel time and delays in delivery schedules.
3. Location-Dependent Acceptance
The acceptance of corporate fleet cards varies by location, leading to constraints and inconveniences for companies operating in areas where certain cards are not widely accepted.
Drivers will encounter difficulties during interstate routes if you offer a nationwide delivery service and the fleet card is only accepted at specific gas stations or regions. It complicates expense management and hinders the company's ability to streamline fuel-related transactions.
3. Management Complexity
The specialized design of fuel cards introduces an administrative burden when managed separately. For instance, a company using distinct fuel cards for different vehicles finds consolidating expenses difficult, leading to increased administrative efforts and potential operational inefficiencies.
As a result, administrators have a hard time reconciling statements, accurately tracking expenses, and ensuring compliance. This burden increases processing times and errors in financial reporting.
4. Reward Limitations
While crafted to suit industry needs, fuel cards encounter limitations in cashback offers. Consider a scenario where a company's preferred fuel card provides cashback benefits only at select stations, restricting potential cost savings for the entire fleet.
Why Should You Switch to Pluto Corporate Fleet Cards?
Pluto fleet cards don't restrict the use of cards at their discretion. Instead, they facilitate advanced controls and real-time visibility. From issuing budgeted fuel cards to creating vendor-specific cards, you can set rules that align with your company's needs and policies. Then, with each transaction, you track all fleet expenses from a single dashboard and get real-time data without manual effort.
So, you set cards and add controls, and you are good to go! Drivers can spend them at convenient gas stations while you enjoy complete visibility and control. Each transaction appears on the dashboard and notifies drivers to upload the receipt directly from WhatsApp. Once uploaded, you can approve the expense, and the data syncs with your accounting software to help you close your books ten times faster.
Here are the top six benefits of switching to Pluto corporate fleet cards:
1. Unrestricted Access Anywhere
Unlike traditional restrictions, Pluto corporate fleet cards liberate your drivers. There are no limitations on locations or specific fuel stations. Enjoy the convenience of using cards at the most budget-friendly and strategically located gas stations, repair shops, or truck stops that welcome Mastercard.
2. Easy Cashback
Pluto corporate fleet cards make cashback benefits straightforward. With up to 2% unlimited cashback on over 100+ currency spends, enjoy seamless cost savings without intricate conditions or restrictions.
3. Smart Budgeting
Pluto fleet cards, functioning as debit cards, provide smart budgeting without blocking cash flow. Drivers can request limit increases in seconds, ensuring operational flexibility with swift approvals. This distinctive feature sets Pluto apart, seamlessly blending budget management and uninterrupted cash flow for efficient fleet operations.
4. Driver-Friendly Controls
Provide drivers with budgeted fuel cards and set spending rules. Real-time data and advanced controls give you complete transparency of fleet expenses, enabling strategic decision-making.
5. Grow With Ease
Whether you have hundreds or thousands of drivers, the streamlined process of issuing corporate fleet cards and setting controls remains hassle-free, supporting your scalability with ease.
6. Eliminate Fraud
Lock or freeze cards instantly from the Pluto app, ensuring proactive measures against fraud. Enable company policies to ensure in-policy transactions, eliminating the risk of unauthorized spending.
Enhance End-to-End Spend Management
Pluto eliminates the need for separate investments in corporate fleet cards, offering an all-in-one spend management solution.
Pluto's comprehensive platform facilitates both corporate purchase cards and fleet cards, streamlining your financial operations. Enjoy the same benefits as traditional corporate fleet cards but with enhanced functionality, all within a unified platform. With Pluto, you get unparalleled efficiency in managing corporate expenses, ensuring a seamless and integrated approach to financial control.
Transform your spend management today. Book a demo and discover how Pluto can optimize your financial processes and elevate your business operations.
•
Mohammed Ridwan
Top 6 Expense Management Software for Global Businesses in 2024
You have just received an OTP, and now you are guessing which one of your employees is spending this amount and why. You don’t have time to review it, nor can you delay the payment too much. You neither have control nor visibility. This is the problem of shared corporate cards.
If you want to make it simpler for your employees, invest in expense management software. It is an automation tool to streamline employee-related expenses—reimbursement, petty cash, and corporate cards. In addition, it offers a centralized platform with real-time visibility into how employees spend company money. As a result, the entire cycle of approval and accounting becomes simpler.
In this post, we share the top six expense management software to help you get started.
Top 6 Expense Management Software
Here are six options for expense management software to manage employee-related expenses:
1. Pluto
Pluto is the best platform for managing employee expenses as it streamlines petty cash management, corporate cards, employee reimbursements and account payables. It is trusted by the largest finance and procurement teams in the Middle East, such as Tamara and Petrochem. With Pluto, you can transform reimbursements to get more control and visibility without causing delays or confusion.
Key Features:
- Provides custom no-code approval workflows that adapt to the company's hierarchy for timely and accurate approvals
- Automates receipt capture through optical character recognition (OCR), with the ability to support bulk upload via WhatsApp
- Supports unlimited corporate cards—virtual and physical, with budget controls to maintain expenses within corporate policies
- Offers zero-balance cards, which get funded once the expense is approved
- Ability to add comments and other transaction details to maintain a comprehensive audit log. View-only access is available for external accountants to review financial data without making changes
- Facilitates card-specific policies to make branch and subsidiary-level reimbursements easy
- Gives the option to make mass payments to reimburse employees
- Offers custom expense reports to overview business expenses and spending trends
- Alerts in case of duplicate receipt uploads to avoid fraud and compliance issues
- Integrates with accounting platforms like Netsuite for advanced general ledger (GL) coding and tax tracking
- Provides secure document storage with a five-year audit log and bank-grade encryption
Pricing:
Pros:
- Enables branch and subsidiary-level spend tracking (not offered by other platforms)
- WhatsApp integration to make receipt upload easy
- Offers up to 2% cashback on all non-AED transactions
- Independent PCI DSS Level 1 Certification
Cons:
- Slightly longer onboarding due to a corporate card offering
- Integrates with all other major ERPS except Tally
2. Airbase
Airbase simplifies expense reporting with AI and ML and ensures quick, hassle-free, and smart corporate expense management. It is an automation solution for small to midsize businesses (SMBs) and large enterprises with 100-5,000 employees.
Key Features:
- Offers OCR to populate details, including GL category, date, amount, and purpose
- Ensures compliance by sending reminders and, if needed, locking cards until policies are met
- Facilitates reminders to upload receipts, eliminating the need to chase employees for receipts
- Offers a designated email address to send receipts of virtual card transactions
- Allows custom approval workflows and budget limits for physical cards
- Provides alerts for suspicious activity, enabling quick responses to potential fraudulent purchases
- Enables real-time audit trail with receipts, notes, and documentation for transparency
- Automates expense reimbursements to employees' bank accounts once the expenses are approved
Pricing:
Request the sales team for a custom quote
Pros:
- Flexible to accommodate varying team sizes and user base
- Intuitive and easy to use; no training or previous knowledge required
Cons:
- Slow mobile app; takes time to load pages
- Glitchy SSO-based login
- Not suitable for complex branch-level approvals and expenses
3. Ramp
Ramp is an integrated solution that streamlines expense management with corporate cards, automated expense tracking, and real-time reporting to help teams track expenses. It is a suitable solution for businesses of all sizes.
Key Features:
- Provides corporate cards with the ability to add spending policies to prevent unauthorized or non-compliant expenses
- Facilitates customizable workflows for expense approval
- Enables employees to submit expenses on the go through SMS, mobile app, and integrations with platforms like Gmail and Lyft
- Automates the capture and matching of receipts for every transaction, ensuring accurate expense tracking
- Flags non-compliant expenses, including weekend spend, excessive tipping, and alcohol purchases, reducing the need for manual review
- Provides instant access to real-time spending data, allowing businesses to make timely adjustments before exceeding budgets
- Identifies cost savings opportunities, such as duplicate subscriptions and unused solutions
Pricing:
Offers 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:
- Unlimited 1.5% cash back on credit card purchases made using their VISA branded cards
Cons:
- Only available to businesses registered in the US
- Doesn’t have a mobile app for Android phones
4. Bill.com
Bill.com simplifies employee expense tracking by providing real-time visibility and customization. It is an expense management solution for SMBs to control all corporate expenses. It streamlines a scattered expense management process with seamless syncing.
Key Features:
- Extends credit limits ranging from $500 to $5 million to control spending within constraints
- Provides custom approval workflows to speed up the approval process with minimal friction
- Offers multiple payment options, including ACH, credit card, check, international wire transfers
- Automates purchase order workflows with the ability to sync and automate two-way matching and three-way matching
- Enables quick coding and sync with accounting systems to streamline expense reconciliation
- Enables automated receipt matching, categorization, and expense reporting, reducing administrative workload
- Offers security features, including the ability to freeze and create corporate cards instantly
- Notifies administrators of each employee's transactions, ensuring timely oversight
Pricing:
Offers 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
- Glitches in the reimbursement process lead to pending approvals
5. Rydoo
Rydoo is a cloud-based expense management tool that streamlines reimbursement cycles, automates expense flows, and enhances team productivity. It combines the capabilities of an expense tracker and a travel service, enabling you to book flights and hotels. It is suitable for medium-sized businesses that are building international relationships with overseas offices as it supports multiple languages and currencies.
Key Features:
- Supports OCR scanning feature for receipt management
- Automates approval flows for expenses based on company policies
- Assures global compliance by setting up rules, mileage rates, per diems, and tax rates for specific countries and regions. Also provides an advanced rule engine for tailored policies in the admin panel.
- Reimburses employees in their local currency, supporting diverse international operations
- Integrates with popular third-party apps like Dropbox, Slack, Uber, Lyft, and SAP
- Supports accounting software widely used in the European Union, such as Exact Online and E-conomic
- Offers full audit trails for maintaining company policies, IRS compliance, and resource conservation with a 10-year data storage period
Pricing:
Offers a team plan at €8 per user per month with OCR scanning and integrations, growth plan at €10 per user per month adding controls and SAP/Oracle integrations, and enterprise plan with API support and custom pricing for ERP and HR
Pros:
- Makes it easier to add expenses in different currencies and get paid in local currency with multi-currency support
Cons:
- Increases in prices over time leading to significant cost jumps over the years (Source)
- OCR doesn’t work efficiently and requires manual entry
6. Zoho Expenses
Zoho Expense is a travel and expense management solution designed to cater to the needs of growing businesses. Trusted by thousands of businesses across 150+ countries, it is a customizable expense-tracking tool offering a mobile-first approach, automation, and integration capabilities. Its integration with the Zoho suite makes it suitable for SMBs seeking efficient travel and expense management.
Key Features:
- Provides complete control over all stages of employees' business trips—pre-travel approvals, bookings, and post-travel management with a powerful self-booking tool for efficient business travel
- Offers customization and multi-level pre-travel approval flows along with automated visa requests, documentation, and forms
- Supports expense reporting by auto-scanning receipts for automatic expense creation
- Enables simplified approval processes and timely reimbursements
- Integrates with company cards to offer direct card feed retrieval and automated reconciliation
- Facilitates budget creation and comparison with actual spending with customizable rules to restrict overspending
- Provides AI-driven fraud detection for expense audits with country-specific editions for local compliance and mileage rates
- Supports real-time communication with employees through chat, comments, and notifications
- Integrates with leading travel, HRMS, accounting, ERP, and collaboration solutions
Pricing:
Offers flexible pricing plans, starting with a free option and scaling up to $3 per active member per month, $5 per active member per month, and custom enterprise pricing
Pros:
- Adaptable to global taxation regulations
- Easy to set up and deploy, very affordable for SMEs
Cons:
- Limited payment gateway integration options
- Can be a little confusing to learn especially when transitioning from app to desktop
Finding the Right Expense Management Solution
Consider these three factors while choosing the right expense management software — ease of use, security, and flexibility. Choosing the right expense management software can help you start your journey towards a healthy financial ecosystem.
In the end, what matters are your internal policies and controls that govern the expenses. Because no matter what platform you choose, if there are gaps in your internal control systems, the software will not be able to do the heavy lifting.
If you want more clarity on how you can stop the chaos in your company and manage expenses better, read our detailed post on internal control over financial reporting (ICFR). You can also book a call, and our team will help you better understand the bottlenecks and how you can streamline your expense management.
•
Vlad Falin
Procure-to-Pay Process: What it is, Benefits, and Steps Involved
The procure-to-pay process doesn’t mean the procurement process. It is a subset of procurement that integrates purchasing and accounts payable.
Traditionally, the procurement process is scattered across the business, and the procurement team needs help to gain visibility or control. The employees purchase from different vendors, the approval process is chaotic and delayed, the stakeholders are stuck in email threads to review the expenses, and the procurement team struggles to get an overview of the organization’s needs.
Procuring the best goods and services becomes problematic since the team is left with open information loops. As a result, it spends more time optimizing the procurement cost and improving the bottom line.
What is the Procure-to-Pay Process?
The procure-to-pay process streamlines the scattered procurement parts to combine purchases and payments. Instead of a process spread across different software, the procurement process shifts to a centralized platform.
The employees get a dedicated platform to raise purchase requests and obtain approvals. The platform notifies stakeholders, such as managers, legal teams, finance teams, IT teams, and other relevant decision-makers to review and approve the proposals. As a result, the procurement team seamlessly moves to the vendor evaluation and negotiation stage without worrying about approvals or delays. The finance team efficiently handles accounts payable since the purchase and payment process is integrated.
So, while earlier, the purchases were handled solely by the procurement team and payments solely by the finance teams, the procure-to-pay process gives both teams an overview of the process from start to finish. In this post, we will discuss how this procure-to-pay process helps you optimize your procurement function and improve your bottom line.
Why Do You Need a Procure-to-Pay Process?
The procure-to-pay process is not just for your finance team or procurement team. It helps the entire organization to gain resources efficiently. Here are eight ways that demonstrate how moving to a streamlined process benefits you:
1. Visibility
All the relevant stakeholders get visibility into the process and the status. Be it the employee, managers, finance team, legal team, IT team, or procurement team — each one can track the progress without delving into multiple email threads. Additionally, teams get insights that help procurement teams optimize costs with data-driven decision-making.
2. Compliance and Control
You can implement advanced controls, such as customized approval workflows and spending budgets, without micromanaging the teams. You can successfully enforce internal control over financial reporting without creating unnecessary team resentment.
So, for instance, if any expenses or purchases beyond $50,000 require additional approval from the legal and IT team, you can easily configure those controls within the approval workflow.
3. Streamline Workflows
The traditional process demands the employees to go from one office to another or spend days on email and Slack conversations before the managers give the green signal. At times, approval of a critical stakeholder is missed, causing delays and disrupting the workflow.
With the procure-to-pay process, you can create custom workflows depending on the purchase category, department, amount, etc. This accelerates workflow, and all the relevant stakeholders get notified right away.
4. Centralized Management
The procure-to-pay process integrates purchases and payments to bring all the critical information on a single dashboard. As a result, any discrepancies in the procurement process are identified in minutes. The entire procedure accelerates the real-time visibility of each stage.
5. Reconciliation
A centralized management system makes collecting and storing documents easy; additionally, since it integrates purchases and payments, the information syncs across accounting systems and ERPs.
During the audit season, this becomes a blessing where the finance team doesn’t have to chase teams for complete records. Also, it becomes easier to store and lock all the transactions and share these records with external parties.
6. Risk Management
The procurement operation is prone to financial, operational, and reputational risks. With the procure-to-pay process, teams can efficiently manage the vendors, purchase requests, approvals, and payments on a centralized platform in real time. It reduces the risk of fraud, ensures policy compliance, and provides visibility into spending patterns without burdening any team.
7. Insights
You can easily see the inside out of your procurement process, whether you want to know how much the marketing team spends or which vendor costs you the most. It makes it more convenient to reduce procurement costs and optimize purchases to improve the bottom line. Also, as all the information is centralized, there are no gaps or missing loopholes, providing complete transparency of your expenses.
8. Invoice Management
The procure-to-pay process ensures that all the invoices are captured and extracted into a centralized platform. This facilitates two-way and three-way matching without causing delays. Moreover, the reconciliation process becomes easy as all the records are systematically recorded.
So, whether you receive an invoice via email, WhatsApp, or physical copy, you can easily add it to the system without risking losing an invoice.
What are the Stages in the Procure-to-Pay Process?
The traditional procurement process has over nine steps strewed across different platforms. These include identifying goods and services, purchase requests, vendor selection, negotiation, purchase orders, inspection of the goods received, three-way matching, approvals, and payment and reconciliation.
While the procure-to-pay process doesn’t alter these stages, it integrates them for a streamlined workflow. So, earlier, if the approvals took days or weeks, keeping employees and the procurement team on hold, now it only takes a few minutes or hours. You centralize the procurement process and save money and time.
Here are five key stages in the procure-to-pay process:
1. Purchase Request
Employees no longer need to travel from one office to another, seeking approvals manually from managers. The streamlined procure-to-pay process gives employees a centralized dashboard to raise requests and specify their needs. It helps the procurement team to understand what the employee needs as well as examine the purchase details. Moreover, the stakeholders can quickly approve or reject the requests from the dedicated platform.
Administrators add customized approval flows to enforce internal policies. They create trigger-based approval workflows based on the expense amount, category, and department to accommodate intricate hierarchies.
For instance, they have the option to create separate workflows for expenses below $5000 and those exceeding a certain budget. Similarly, they can add specific stakeholders to the custom workflows for minimum friction and delay.
2. Purchase Order
While the vendor evaluation, selection, and negotiation happen on dedicated ERPs, the procure-to-pay process enables you to bring all this information on a consolidated platform. You maintain a synced and consistent database to make purchases faster and more secure.
Pluto integrates with your ERPs and allows you to maintain a centralized vendor database. You can add the vendor directly to the platform and systematically record information. You can add a field in your approval workflow to determine whether the employees are purchasing from a vendor list or a new vendor.
A systematic list helps you consolidate expenses and optimize costs. Moreover, ordering becomes more accessible with a unified platform for raising and approving purchase requests and maintaining an ERP-synced vendor database.
3, Invoice Management
Traditionally, vendors send invoices to a dedicated email or an address. The employees send them for approval and payment. It takes days to clear the expenses. Additionally, the accounting team spends considerable time and energy on maintaining records.
The procure-to-pay strategy reduces this effort and streamlines the procedure. It captures and extracts the invoice from the emails and attaches to a dedicated purchase request and order. This helps the teams match the purchase order, invoice and goods received note (GRN) without juggling multiple platforms.
It pulls all the information with optical character recognition (OCR) technology, reducing manual data entry. Since this platform syncs with the accounting system, the accounting team spends minimal time on data entry.
4. Payment Processing
Processing payments becomes a task when the finance team has to chase employees for invoices and wait for approvals and verification. The procure-to-pay technique centralizes the entire process, giving real-time visibility and helping finance teams make timely payments.
Moreover, with Pluto, you can integrate your procurement software with the payment gateways to ease the payment process further. Also, you get better Forex rates than banks, helping you save more money. Overall, with the approvals and invoices streamlined, payment processing becomes easy.
5. Reconciliation
Reconciliation is the hardest part, even when you perform the data entry and data sync monthly. You risk losing documentation and creating gaps in the records.
The procure-to-pay process consolidates the entire procurement cycle to bring all the critical information on a single platform. There are minimal gaps; records are up-to-date due to real-time tracking and recording.
With Pluto, you can integrate with platforms like MS Dynamics, Oracle Netsuite, QuickBooks, etc. So, with your ERPs and accounting software synced, you can easily record all the transactions digitally and securely.
Pluto further enables you to lock the transactions to avoid fraud once approved. Moreover, you can create view-only access for your records to simplify auditing for external parties.
Improve Your Bottom Line With the Right Procure-To-Pay Solution
Overall, the procure-to-pay process helps you automate your procurement process without changing your approach too much. You just need to find the right solution that assists your procurement process.
We discussed more about this in our procure-to-pay solutions post, where you will find what procure-to-pay software does and how to pick the right one.
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