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Here’s a simple question: How much money has your business spent today? We never said it was a simple questions to answer: data abounds, yet this is still one of the hardest questions to answer accurately, especially as a company scales.
This is because many organisations still rely on traditional corporate cards, expense claims and month-end reconciliation. By the time the finance department has collected receipts, processed claims and reconciled statements, the opportunity to control company spending has already passed you by.
Modern expense management platforms are bringing transparency and control to this opaque practice. Company cards are now integrated with cloud-based software, so that leaders and finance teams have a live view of spending as it happens. The result is less admin, better decision making, and fewer nasty surprises.
Traditional expense management is all about hindsight. An employee books a hotel. Another buys software. A team orders equipment. Weeks later, the receipts arrive, claims are submitted and finance begins reconciling transactions against budgets. Only then does the organisation gain a picture of its spending.
This process worked okay in a slow, paper-based economy, but is unfit for the digital world. Waiting until month-end to understand expenditure means leaders are often making strategic decisions that have an instant impact on the organisation – only they’re using outdated information.
Nicola Hunt is a Chartered Physiotherapist and Brain Health Coach, Founder of Physiocare Rehab and Brains at Work Academy. She works with patients following a brain injury, and with companies to support the brain health and performance of their staff. “I cover a wide geographic area,” she says. “I can cover 200 miles some days, and I used to keep all the receipts for mileage and travelling expenses in the car, and record everything that came in and out in a paper book.”
This system had its drawbacks: the receipts took up a lot of space “and I had to keep them for seven years but the ink on them didn’t last that long,” she says.
“I wasn’t as diligent at keeping the receipts as I should have been,” she adds. “I’d find receipts and think, ‘What was this for?’ Over the years, I have lost an awful lot that I could have put through.” In fact, recent research shows that UK businesses are losing out on £742 on average each month because of unreclaimed expenses.
Real-time spend visibility means that every purchase made on a company card appears immediately. In larger businesses, managers and finance departments can see who spent the money, where it went, the amount and which budget it belongs to.
For smaller organisations, expenses can be reconciled at the end of each day, so there’s no end-of-month/end-of-year scramble. This is why Hunt made the switch to real-time software, she says. “Everything is done instantly. I take a photo of the receipt as soon as I buy a coffee on the road, and at the end of the day I reconcile expenses to the bank account. Subscriptions and other regular expenses are easy to track and the software flags they’re coming in, so I have a complete picture of cashflow.”
Hunt buys specialist equipment on behalf of some of her patients, paying for it through her business before reclaiming the cost later. “We’re not talking resistance bands,” she says. “I have bought treadmills and specialist standing frames. Now, by looking at my accounting software, I know exactly how much cash is in the business to make high-value purchases.”
By logging expenses against specific clients or revenue streams, it becomes easier to see the winners and potential loss-makers in your business and tweak your business strategy to focus on profitable activities.
Another benefit of expenses management software is having an app for your phone. This allows you to track spending on the go. Sarah Schutte is a solicitor, mediator and the boss of Schutte Consulting. She says: “Sometimes I just want to check an expense quickly on my phone but other times I want to log in on my laptop where I can access the full dashboard and graphs that show spending in detail.
“From there, I can also quickly create snapshots and comparisons around spending fluctuations to send to my accountants for advice, as well as ensure I have captured everything for the month and not missed anything.”
Real-time tracking makes unusual transactions or duplicate purchases easier to spot. Many platforms will automatically flag spending outside company policy, purchases exceeding approval thresholds or transactions from unfamiliar merchants.
For Schutte, real-time tracking has also become integral to compliance. “I need quality business data that’s verifiable and justifiable,” she explains. “We don’t have a lot of expenses but, as a legal firm, we have to comply with legal regulatory rules. Our books have to be open to audit but it’s also about integrity and reputation.”
Schutte uses real-time expenses tracking to connect expenses such as international flights to clients or projects. “This kind of visibility helps me plan ahead,” she says. “I like the certainty that my expenses are done and handled, not an unfinished job I have to return to later.”
Every business can benefit from real-time tracking software, Hunt believes. “It’s not just expenses that I track now,” she says. “I use mileage tracking software and time tracking software. When I made the switch, I was amazed to see how much I had underestimated the time I was spending on tasks. I thought an email took me five minutes but it actually took 15, and that’s all billable time to the client.”
By tracking her expenses alongside other processes, she has saved hours of admin time. “It’s also given me my Christmas back!” she reveals. “Most patients don’t want to be seen over the Christmas period so that was when I did my annual accounts and caught up with my P&L. I would have the receipts in folders marked by month and that would be my Christmas treat!”
This system was stressful and forced Hunt to live with multiple unknowns while trying to balance costs and growth. Instead of delaying decisions because of the missing information, she now acts immediately. “I can plan how to take the business forward,” she explains. “I look at how much to invest in equipment and how much I can put into my pension, knowing that I’m working with correct, up-to-date figures.”
Finance as a whole is moving away from periodic reporting towards this kind of continuous visibility, driven by government programmes like Making Tax Digital. Just like the real-time dashboards we expect for sales, operations and customer management, spending has had its own ‘real-time’ glow-up.
