Expense management trends: Supporting clients with automation

Expense management trends change the whole time – with new tools and technologies offering greater clarity for business owners. By monitoring spending, generating reports, and adopting digital tools, you can educate and empower your clients with better insights about their spending.

Trend one: Automation and integration

Gone are the days when employees would knock on the finance department’s door with their receipt for an expense.

Accounting professionals can employ a range of software integrations that mean employees can simply snap a photo and upload it to expense management software. UK businesses may even be able to access these tools via their bank account or accounting software provider.

Revolut offers an expense management product that means users can upload, approve, and reimburse from the app. Specialised tools like Fyle and Expensify offer greater functionality and insights; features include customiseable expensing rules, duplicate receipt detection, and detailed reports and analytics that give clients a glimpse into their future spending and cash flow.

Since employees can upload receipts instantly, it saves the endless back and forth between you and your clients for missing evidence. Instead of rifling through a box full of receipts at the end of the month (and matching them one by one), expense management tools automatically extract the relevant transaction data from receipts.

Your clients also get to customise the levels of access. For example – line managers might need to access the software at approvals level, whereas team members only need the facility to upload receipts. This keeps information safe and secure, and ensures only the authorised expenses are approved and paid.

Expense management software goes hand in hand with cloud-based accounting software. Integrating the two allows you to sync every expense – accounting software is automatically populated with the details, saving you time on manual data entry. Plus, approved expense claims move through to your accounting software seamlessly, so employees get reimbursed without delay.

It’s best to weigh up the options with your clients, and choose an expense management system that integrates with their existing workflow and approach.

Trend two: Mobile expense management

Expense management systems aren’t just for the desktop.

Your clients can equip their employees with a mobile app that enables receipt capture and tracking expenses on the go. Equally, they can use it themselves, to log receipts on-the-go and keep an eye on where their outgoings are headed.

Instead of receiving paper receipts from your clients’ employees, you can access the mobile app data and categorise expenses whenever and wherever they’re happening.

When advising clients on mobile expense management, it’s important to consider safety and security. Since employees could be accessing the app from their personal devices, this requires additional security protections. Look out for apps that provide encryption, SOC certification, PCI compliance, and multi-factor authentication.

For a tool that integrates seamlessly with Xero bookkeeping and tax software, look no further than Xero Go. Clients can snap a photo of their receipts, upload them via the app, and you can categorise expenses in real time.

Trend three: Policy compliance and expense tracking

Having an expense policy in place can help your clients manage their spending, and stay on track with tax compliance. You can help your clients create a robust expense policy by helping them figure out:

1. the approvals process
2. items that can and cannot be expensed
3. the process for submitting expense receipts
4. the timeline for reimbursement and payment processes
5. spending limits by department or person

There are other items your clients might want to include in their expense policies, depending on the type of business they run. For example, some companies offer stipends for employees to spend on the things that make them happier at work. These budgets can be rolled over into the following year if they aren’t spent.

Of course, an expense policy is only helpful if it’s enforced. Regularly check in with clients, to make sure their actual spending aligns with what was laid out in the policy. Review expense reports and live data to make sure employees are complying with the policy, too.

Look out for unusual patterns in expense reports, and be sure to follow up with clients if something doesn’t look right. Catching errors and anomalies early can help clients nip non-compliance in the bud. Where non-compliance is identified, it should be addressed immediately.

As trusted advisors to various businesses, accountants and bookkeepers develop an understanding of average costs for industries and expense types. Using this knowledge and reflecting on client data, you can identify opportunities for them to save money – for example, if company phone bills are particularly high, guide clients towards a cheaper contract.

Trend four: Data analytics and reporting

Businesses can’t have eyes everywhere – and tracking expenses is a tough job. But data analytics and reporting can give businesses and their advisors a more comprehensive view of what’s being spent.

Accountants and bookkeepers can analyse expense data to identify trends, anomalies, and cost-saving opportunities. By creating regular expense reports for specific departments, timeframes, and accounts, you can give clients an in-depth view of their money.

There are all kinds of ways you can use expense data to support your clients. Create forecasts and budgets based on past expense data to help clients prepare for the future. Or view expenditure by employee and account to crack down on spiralling costs.

Modern expense management software comes complete with data visualisation tools – like charts, graphs, and live dashboards – which can help you present complex financial information more clearly to clients.

Comprehensive expense reports are handy when tax season comes around, too. They can help you claim the right expenses on behalf of clients, and claim tax back on purchases. Plus, you’ll have all the relevant expense data to submit on returns, right at your fingertips.

Trend five: Expense fraud prevention

Expense fraud can come in all shapes and forms – mischaracterised expenses, false expenses, and duplicate reimbursements, to name a few. Clients and their employees can commit expense fraud accidentally, as the result of an unclear policy or lack of enforcement.

For small businesses working with a limited budget, expense fraud can cripple cash flow. Having a solid policy in place for company expenses is a good place to start, but practices and their clients must implement multiple levels of controls to prevent and detect expense fraud.

Historically, these controls would involve checking through transactions individually. Today, technology can help accountants and bookkeepers along.

Fraud detection software can filter through reams of transactions, and flag irregularities or suspicious data. This saves heaps of time on manually reviewing expenses – so you can focus your attention on transactions that are most likely fraudulent.

You and your clients can also prevent fraudsters from getting through the cracks, by implementing stringent approvals processes. Modern expense management software allows you to set levels of access for staff members, so only authorised personnel can review and approve expenses.

By requiring clients and their employees to submit receipts digitally, you can also be sure that evidence is captured and stored in a secure place. Expenses that don’t include legitimate receipts can then be voided.

Generating regular expense reports and reviewing data visualisations will help you keep your clients safe. As trusted advisors, you’re often closest to their numbers. You may pick up on anomalies or unusual patterns in the data more quickly than your clients, by tracking expenses closely.

The importance of automating expense management for your clients

Embracing automation in expense management will give you and your clients confidence and clarity over the numbers.

By automating manual data entry, capturing expenses when and where they happen, developing and implementing robust policies, and keeping tabs on the data – you can help your clients feel secure in their spending.

Expense management trends will continue to shift and change. As accountants and bookkeepers, it’s essential that you stay curious and continue researching the evolving landscape.

And don’t forget – automation isn’t just for your clients. It can help you achieve compliance and efficiencies in your practice, too. Xero’s expense management software centralises client expense information, so you no longer need to flick between software programmes to gather the data. Spend less time on account reconciliation, and more time helping your clients build a sustainable business.

For more on running a healthy practice for you and your clients, check out our accounting and bookkeeping guides.