Nobody likes to deal with expense reports.
When filing an expense report becomes such a hassle, what effect does that have on a company’s internal operations? It can slow things down and cause unnecessary spend – among other things – when not managed properly.
Some expense submission processes are simply outdated, especially in the pandemic area, according to Clayton Weir, chief strategy officer and co-founder of embedded banking platform FISPAN.
“The cost of administering [a paper check] to employees is really insane on both sides of the trade,” he said.
So it’s not surprising that companies are coming up with solutions to help make these processes more efficient.
Here, FinLedger talks to some fintechs about how they’re helping companies turn a pain-in-the-you know what process into something easier and less painful to navigate.
Silicon Valley-based fintech startup Zact recently launched its integrated payments and expense management platform that aims to help manage corporate expenses and payments. The company claims that its platform “traverses the entire stack in expense and payments management.”
Since most people procrastinate their expense reports, Zact Founder and CEO John Thomas explained, oftentimes these reports are delayed which causes problems down the line. The cost for a company to manually process an expense report is about $50 dollars, although most expense management tools bring the cost down to about $30. However, Zact’s platform drives the cost down to about $0 because of its business model and technology.
“We actually married the idea of controlling the payments, and accurately reporting these transactions in a near real-time manner,” Thomas said. “Without employees having to do any expense reports, [and] just get[ting] rid of that. Then the second aspect of it is to make life really easy for the accounting team, so that they don’t have to do a lot of work.”
The platform operates at “the granularity of a transaction,” so once the information gets to the accounting departments it’s easy for accountants to reconcile all the transactions with the payments, the coding within their systems, bank systems and other facets of the transaction, Thomas said.
Why does any of this matter?
“Executives need to know how much money they’re spending,” Thomas said. “And if it’s being spent in the right categories, investors need to know it, auditors need to have a proper audit trail so that all these expenses are accounted for. And our platform takes care of all of that.”
Thomas wouldn’t share any specific revenue or growth metrics for the company, other than to say it is “running transactions,” and “generating revenue,” he said. But going forward, a key objective for Zact is to start scaling transaction volume running through its system.
Additionally, Thomas explained that the company did not take an expense and card issuing tool from other parties and “slam them together,” but instead built an integrated platform from the ground-up.
“One thing that’s really unique about our product is that it operates on a budget rather than a credit limit, so somebody can be allocated a budget,” he said.
Meanwhile, accounts payable automation software company Beanworks launched its expense reimbursements feature that aims to help companies automate how they receive and process employee expenses.
The feature allows employees to submit expense receipts online through its app or website, and once its uploaded managers can review receipts and approve reimbursements anywhere. Beanworks CEO Catherine Dahl said in an interview with Finledger that launching this feature was the next logical step for the company for it to become a “one stop shop for all their payable needs.”
“[This product launch is] not as important for travelers per se, although there are definitely still some people doing it,” she said. “It’s important in that the accounting team has a need and desire to process everything into the accounting system as quickly as possible so that it is registered as a liability.”
Canada-based Beanworks is a cloud-based company that helps businesses with their purchase-to-payment processes by getting rid of paperwork and manual processes and reducing invoice processing costs. The company claims it can reduce invoice processing costs by 86 percent. Nineteen percent of all manual expense reports include an error, according to the GBTA Foundation.
The company is also looking at adding a corporate credit card functionality to allow customers to set up their own corporate credit cards, allowing an easier management process of individual employees expenses.
Although Dahl wouldn’t give specific metrics, Beanworks will have revenue growth above 50 percent in 2020 as compared to 2019 and is positioned to double its revenue next year, she said. The company’s customer count is 50% higher in 2020 compared to 2019.
What differentiates Beanworks from other products is that this platform does invoices, purchase orders, payments and expenses, which is especially important for accounting teams — the company’s customer base. The expense reimbursement feature is its latest addition to the company’s full AP tech stack.
“This is what we’re doing with payables, putting everything together under one roof,” she said. “So customers have the ease and efficiencies of being able to just see the whole thing.”
Earlier this year, executives at Lola.com in the Spring decided to forge ahead with an idea that had been percolating for months, according to previous reporting.
On Oct. 28, the Boston-based startup unveiled that idea — a new product called Lola Spend. The real-time technology enables companies to better manage expenses against departmental budgets. Lola boasts that its new offering reduces reliance on spreadsheets, erases the need for expense reports and, perhaps most importantly, keeps budgets in line.
Paul English, co-founder and chief technology officer of Lola, stressed that his company isn’t abandoning business travel management. Rather, it’s merely placing the new expense management platform alongside its existing Lola Travel platform.