Picking the right expense management software

A CFO’s office in modern days cannot function without a solid, robust expense management tool. There are a host of solutions available for companies of all sizes. How the CFO’s office goes about selecting the tool depends on several factors which we will address in the blog below.

Highest Level Considerations :

The highest level considerations are size of your organization (enterprise, mid-market, small business), existing finance stack (ERP, Banks, other financial software), budget and ROI (pricing, hidden fees, credits), implementation time-line and effort (is this a self-service or requires hired expertise), data security and compliance, ability of the tool to serve the geographic footprint of the business (Domestic, Multi-national/currencies) and lastly reputation of the vendor in terms of customer and technical support. A note of caution here is some tools have sharper functionality and may not measure up when it comes to support. This can be a make or break when the system has a breakdown during a critical time for the company and there is no support or limited support available.

Generic or Specific :

Expense management tools can be generic or industry specific, so if there are tools available that specialize in your industry, those tools should definitely make the short list. One interesting new startup Affiniti is using this verticalized approach by building a expense management tool that addresses “Main Street” businesses such as HVAC providers, Contractors, Construction Companies etc. So, industry specialization could be another consideration.

Utility and Breadth of the tool :

Also do not forget the utility breadth of expense management tools. Some tools are deeply specialized and will address non-payroll employee expenses well. Some others, will do that plus also add a robust travel management and expense module. Then there are solutions that will add a procurement module on top and offer a more end-to-end solution. The CFO’s office must ponder this carefully. Some might lean towards a ‘one-stop shop’ approach, while others will feel it is better to build out a more modular finance stack and not be dependent on one single vendor.

Expense management tools continue to evolve. Brex for instance started with as a expense management company for small emerging startups and overtime has pivoted to address the mid-market and enterprise level customers. Not just that, Brex now offers a broad product suite beyond expense management to including financing, treasury services and other features.

An important strategic decision :

Selecting an expense management tool isn't just about streamlining a process; it's a strategic decision that impacts financial control, operational efficiency, compliance, and ultimately, the company's bottom line.

Here are the top questions to ask before committing to an expense management solution:

Financial Impact & ROI

a)     Total Cost of Ownership (TCO) & ROI: What is the complete cost (licensing, implementation, training, integration, ongoing support, potential downtime, hidden fees) over a 3-5 year period, and what measurable ROI (time savings, cost reductions, fraud prevention) can we realistically expect within the first year and beyond?

b)    Pricing Model Clarity: How is the pricing structured (per user, per transaction, tiered, freemium)? Are there any variable costs that could escalate unexpectedly with growth or usage?

c)     Cost Savings Identification: Beyond basic automation, how does the system proactively identify and help us realize cost savings (e.g., duplicate spend detection, policy violations, negotiation insights)?

Integration & Data Management

ERP & Accounting Integration

a) How seamlessly does the solution integrate with our existing ERP (e.g., SAP, Oracle, NetSuite) and core accounting software (e.g., QuickBooks, Xero)? What level of integration is supported (real-time, batch, API-first)?

b)    Bank & Corporate Card Connectivity: Can it integrate directly with our banking institutions and corporate card providers to pull real-time transaction data? What is the process for reconciliation, and how much manual effort does it eliminate?

c)     Data Centralization & Accuracy: How does the system centralize all expense data? What mechanisms are in place to ensure data accuracy, prevent errors, and maintain data integrity?

d)    Data Migration: What is the process for migrating historical expense data into the new system, and what support is provided for this?

Compliance, Control & Security

a)     Policy Enforcement & Automation: How robust is the configurable rules engine for enforcing our specific expense policies? Can it flag or block out-of-policy spending in real-time before a transaction is approved or reimbursed?

b)    Audit Trails & Reporting: What kind of comprehensive, tamper-proof audit trails does the system provide? Can we generate detailed, customizable reports for internal audits, tax purposes, and regulatory compliance (e.g., DCAA, SOX, GDPR, IRS)?

c)     Fraud Detection: What built-in capabilities (e.g., AI/ML anomaly detection, duplicate detection) does the software have to identify and prevent expense fraud?

d)    Security & Data Privacy: What security protocols are in place to protect sensitive financial and employee data (e.g., encryption, multi-factor authentication, role-based access controls)? What certifications does the vendor hold (e.g., SOC 2 Type II, ISO 27001)? How does it comply with data privacy regulations relevant to our operating regions?

Scalability, Global Reach & Future-Proofing

a)     Scalability: Can the system easily scale to accommodate future growth in employee count, transaction volume, and geographical expansion without significant performance degradation or costly overhauls?

b)    Global Capabilities: If applicable, how well does it support multi-currency transactions, localized tax regulations (VAT, GST), varying per diems, and international reimbursement processes?

c)     Roadmap & Innovation: What is the vendor's product roadmap? How do they plan to incorporate emerging technologies like advanced AI/ML, blockchain (for expense verification), and other innovations relevant to financial operations?

User Experience & Adoption

a)     User-Friendliness: How intuitive and easy is the system for both employees (for submission) and managers (for approval)? What is the expected learning curve?

b)    Mobile Accessibility: Is there a fully functional and user-friendly mobile application that mirrors desktop capabilities for on-the-go expense management?

c)     Employee Adoption Strategy: What strategies does the vendor suggest or support to ensure high employee adoption rates, thereby maximizing the system's benefits?

Support & Implementation

a)     Implementation Process: What is the typical implementation timeline and methodology? What internal resources will be required from our side during implementation?

b)    Customer Support: What level of ongoing customer support is provided (24/7, dedicated account manager, online knowledge base, phone/chat)? What are the typical response times for critical issues?

c)     Training & Resources: What training programs, documentation, and ongoing resources are available for our finance team and employees?