What to look for in business expense tracking apps and tools
Regularly monitoring your business expenses helps set accurate budgets, maximize tax deductions, and curb out-of-policy spending. That’s why robust expense management software is essential.
Sure, you may be able to get away with manual expense tracking, especially as a small business owner or startup. But as you grow, using the best expense management software to track spending automatically will make your life a whole lot easier.
In this article, we take a deeper dive into some of the most popular expense tracking apps available today, including Zoho Expense, Expensify, SAP Concur, FreshBooks, and our own Ramp. But before we get started, let’s clarify what it means to track business expenses and what the general process looks like.
What is expense tracking?
Expense tracking refers to the process of recording, categorizing, and monitoring your business expenses to understand where you’re spending money. Business expense tracking helps you set more accurate budgets, make better financial decisions, and prepare your business for tax season.
The expense tracking process is pretty consistent from one business to another. Here are the basic steps:
Collect and retain all receipts and invoices related to your business transactions.
Properly categorize each expense to determine whether it’s tax-deductible.
Add these details to your financial records regularly.
Many small businesses get by with manual expense tracking methods like Excel spreadsheets or other templates. However, using purpose-built expense management software helps simplify your process. Automating the process of tracking, managing, and reimbursing expenses ensures that you reduce errors, improve compliance, and control spending. Ramp highlights elements to focus on when evaluating apps and tools to help manage business expenses.
How to choose a business expense tracker
As you’re zeroing in on the best expense tracker for your business, keep these factors in mind before making a decision.
Cost-effectiveness
Make sure the tool’s pricing structure aligns with your budget. Can you save money on user seats? Scrutinize who truly needs access to the tool and who can go without. Could you make do with just the free features? Spare yourself the expense of a paid plan altogether. The idea is to balance affordability with the feature set.
Ease of use
It’s important to evaluate expense trackers for user-friendliness before committing to one. An online demo should give a sense of usability. A good user interface makes navigating and using the app easier, and training your employees will be more straightforward. Finally, be sure to choose a tool with a mobile app for convenience when you’re on the go.
Integration capabilities
Always check whether the tracking tool integrates well with your existing tech stack, including enterprise resource planning systems or accounting software. This allows for the smooth and open transfer of information between teams within your company and with any external accountants or bookkeepers as well.
Scalability and functionality
Always consider whether the tool can evolve with your business. As you grow, your expense tracker should be able to process bulk transactions and allow you to easily add new users—ideally, at no extra charge. Finally, don’t underestimate the value of automation. As you make more frequent transactions, automating approval workflows will save you a ton of time.
Security
Your financial data is sensitive and needs to remain safe and secure. Look for a tool with high standards for encryption and security. Learn more about multifactor authentication, and how they store and back-up your data.
Reporting and tracking
Your business expense tracker should offer detailed, customizable reporting capabilities to give you a complete picture of where your business is spending money. This also includes the ability to budget for business expenses so you can see how your actual spend is tracking against your projections. With real-time visibility into your spending patterns, you’ll be able to adjust spend and identify cost-saving opportunities as needed.
Customer support
Last but not least, research the reputation of the software’s customer service or support team before making your purchase. Customer service can be the quickest way out of a mess when things go wrong. Look for live chat support as well as phone support. And, be sure to fully understand the onboarding process, so you’re starting with a strong foundation.
This story was produced by Ramp and reviewed and distributed by Stacker.
