Business News, Views and Insight

What is expense management?

Written by Rekha Dhar | 10 Jun 2023

Digital innovation is arguably the biggest driver of business models to date. Its usage sits high on the strategic agenda of senior leaders and executive management team members (or, at least, should). The latest technology-led solutions can deliver an array of benefits: enhanced efficiency, cost savings, and a reduction in human error, to name a few. And that’s why we love to talk about – and, more, importantly, deliver. But more on this a little later.

In some areas of corporate finance, such benefits are notably welcome to counter the lack of clarity that CFOs experience; with regard to manual, people-led processes. One core finance process being expense management. Join us, as we discover how and why this task – underpinned by automation – can help shape, not stunt, your financial productivity.

So, what is expense management?


Expense management is the process via which businesses pay and report on company expense claims. Travel expenses and accommodation costs; meal and refreshment allowances; postage costs; fuel expenses; telecom bills; parking fees – you name it, there’s an expense to cater to. And these will tend to grow in tandem with the growth of your company. A study in 2018 by the Association of Accounting Technicians (ATT) even revealed that the average UK worker will claim a total of £134,617.94 over the course of their professional lives. Clearly, expenses and reimbursements form and will remain to be a key part of business expenditure.

So, it was rather startling to find that almost a quarter (23%) of 150 financial controllers, surveyed for our 2019 ‘Corporate Spending’ report, were still relying on outdated manual reconciliation processes. With an increase in employee spending, the cumbersome nature of manual expense management becomes even more apparent. Enter: a robust automated expense management platform (but again, more on this soon).

What are the shortcomings of manual expense management?


So, let’s address why manual expense management poses a risk to any self-respecting finance team and business at large. It’s mainly two-fold: the end-to-end process requires a lot of manpower, and the tedious, multi-step nature invites room for delays, errors, and fraud or losses. In fact, our 2019 survey also saw 43% of financial professionals cite their frustration with the number of paper receipts they need to reconcile and process. And we agree.

Moreover, each employee who incurs an expense – ultimately, subject to a manual process - has to consider a number of factors. From limiting excessive spending to remain within the company expense policy’s limit; to safe keeping of paper receipts, until a return to the office; to the matter of entering spreadsheet data correctly; to getting said claims approved and, eventually, reimbursed, it’s an exhaustive maze of a process! And it’s this valuable time, that can be better spent elsewhere by your finance team and the wider business.

Why should I consider an automated expense management solution?


When you opt to abandon outdated manual processes, in favour of an automated expense management platform, the benefits are as follows.

Compliance: Of course, your business trusts its employees – it’s why they were hired in the first place. But heavily regulated markets, like financial services, are subject to strict anti-corruption and anti-bribery rules. So, it’s imperative for finance teams to have better visibility and control over how much money is being spent on whom; in order to accurately flag any potential causes of concern to risk officers.

Talent management: To attract, hire, and retain top talent, you need to cultivate a healthy company culture. One that doesn’t put the onus on staff to use their own money to cover expenses, only to wait lengthy timelines to be reimbursed.

Cost efficiency: Late payment charges and the misuse of company money are conducive to the bottom line. If the expense management process takes too long, or there’s poor visibility (as touched on earlier) of who’s spending how much on what, it’s a considerable challenge to drive down or eliminate unnecessary costs.

How does Caxton’s automated expense management solution work?


Over nearly 20 years of business and expertise in the payments industry, we’ve developed a fit-for-purpose digital platform for automated expense management – alongside digital payment modes and tools in the form of smart, pre-paid corporate cards and a smart expenses mobile app, respectively.

What happens next? You top up said corporate cards, and simply assign as many as you want among the staff you desire to have access to company funds. Employees can then spend on expenses, across 35 million global locations home to the MasterCard logo. So, it’s ideal for domestic and international business trips alike.

And best of all – employees can scan and categorise receipts anywhere, anytime via our intuitive, user-friendly app; and allow the technology to read the data and auto-generate a digital expense report. Plus, our cards and platform interface interact with your accountancy package via our high-tech API, to let you track and manage real-time transactions by person on our live corporate dashboard. In turn, you and your finance team instantly gains the data and visibility of employee spending you never knew you needed, but deserve – to analyse and inform spending best practice, going forward.

Optimise your (manual) expense management process, with an automated solution – led by you, supported by our team of payments experts. Reach out to our team today, to learn how to gain a digital edge tomorrow and revolutionise the way your finance team works. They’ll thank you for it!