Expenses are inevitable in every business, but the way they are managed can make all the difference.
In a digitally connected world, an efficient expense management product isn't an option—it's a necessity. As an expense management provider, it is imperative to provide the best-in-class solution to attract and retain business customers. In this blog, we’ll show you what you need to provide a winning expense management product. (Hint: It’s accounting integrations via RootFi’s Unified Accounting API)
Modern expense management involves streamlining tracking, approving, and processing employee expense claims via an intuitive and user-friendly application.
A spend management solution provides obvious benefits to employees and businesses, which we’ve quickly noted below.
Employee benefits from an Expense Management Solution:
Business benefits from an Expense Management Solution:
Leveraging accounting integrations for reconciliation unlocks new benefits and amplifies existing efficiencies. By categorising expenses according to a business’s pre-established accounting practices, including recognising spend against the correct chart of accounts, you can save your business customers time and resources and improve the accuracy of their bookkeeping and their understanding of their finances.
Offering reconciliation using accounting integrations also helps you, the provider, attract and retain customers. Brex found that 83% of companies said that being able to close their books faster is equally if not more important than employee satisfaction. If you choose to use RootFi’s Unified API, you can integrate with us once to instantly access 16+ accounting integrations and expand your pool of potential business customers.
Let's understand the expense management workflow with an example. Assume a business uses an expense management solution to provide its employees corporate cards (which eliminates the need for out-of-pocket expenses and reimbursements) the expense management workflow follows these steps:
However, the last two (and often most cumbersome) steps of reconciliation are often not automated and finance teams are forced to manually categorize and reconcile expenses in their books. According to a PWC report, 30 percent of a finance team’s time may be spent on manual reconciliation. Accounting integrations connect your expense management product with your business customers’ accounting platforms, allowing for automated reconciliation of expenses. Without automated reconciliation, an expense management product remains an incomplete solution.
Some challenges with manual expense management software are apparent. Manual expense management is often error-prone and leaves businesses vulnerable to fraud. Receipts get lost, expense approval processes are lengthy or lost in email threads, and policy compliance violations are more frequent. Manual processes also prevent businesses from complete oversight of their financial health as data remains outdated and inaccurate across systems.
However, expense management solutions remain incomplete without accounting automation. Manual reconciliation is a drain on time and resources, lowering both employee and business productivity. An automated expense management solution allows for the automatic reconciliation of expenses into a business’s chart of accounts. Brex found that 87% of finance heads said accounting integrations are the most crucial feature in an expense management solution.
As more and more businesses embrace digital transformation, the demand for an effective expense management solution only grows. The global expense management market was estimated to be $6 billion in 2021 and is estimated to reach $12 billion by 2029 (Source).
As the demand for effective expense management grows, the market is becoming increasingly competitive. Incumbent providers like SAP Concur, Expensify and Chrome River are being challenged by fast-growing entrants like Brex and Ramp. Many leading platforms have built accounting integrations in-house or used a Unified API provider like RootFi.
Since integrations with accounting systems are a feature 87% of finance executives find crucial, your integration strategy becomes vital to your success (Brex). While you may consider using an embedded iPaaS solution or even building integrations in-house, using a Unified API becomes a clear solution when you consider the pros and cons of each approach.
In short, embedded iPaaS solutions are difficult to set up and maintain, since they require a thorough understanding of the API documentation for each accounting platform, and do not normalize data. Building and maintaining multiple one-to-one integrations will not only be cumbersome but has many drawbacks, especially when scaling.
While building in-house integrations to the exact accounting platforms you need may be tempting, as it offers complete control, building in-house has several drawbacks. Building multiple integrations in-house subjects you to extremely high build costs, a longer time to market, a shift of developer resources away from your core product, limits scalability and necessitates expertise in API integration maintenance.
The benefits of using Unified APIs like RootFi’s Unified Accounting API far outweigh any potential drawbacks and bypass all of the disadvantages other approaches pose. With a Unified API like RootFi, you can:
Here’s how to build an expense management solution with accounting automation:
Leverage accounting integrations to automatically categorize and sync expenses to 16+ accounting platforms in real-time with RootFi’s Unified Accounting API.
By partnering with RootFi, some of the enhanced features of your expense management can offer include creating expenses, uploading documents, recording a credit card repayment, logging bank account withdrawals or top-ups (prepaid cards), managing employee reimbursement requests and payments and more. Our Expense Management Workflow Guide takes you walks you through setting up each of these actions in detail. Reach out to us if you’d like a copy.
Regardless of the integration strategy you choose, some of the enhanced features of your expense management should offer include:
Address your business customers’ pain points, including reconciliation with their accounting software, via accounting integrations and make them your competitive advantage. Ultimately, you’re not only providing accounting automation and helping businesses save time, money and resources but also ensuring company-wide financial data accuracy.
Partnering with a data integration like RootFi lets you serve a wide range of customers, as RootFi’s Unified Accounting API already supports 16+ accounting platforms. Your pool of potential customers grows with every accounting integration RootFi builds