You have to spend money to make money, according to the old adage. But tracking what you spend can be an incredible burden on owners of small to mid-sized businesses (SMBs), who are often juggling multiple responsibilities while trying to turn a profit.
This article explores how to track company expenses using specialized software. You’ll learn how the right expense tracking software can simplify managing your expenses, save time, and deliver actionable insights to propel your business forward.
What is small to mid-sized business expense tracking?
Small to mid-sized business expense tracking is the process of recording, monitoring, and approving all business expenses. It involves documenting every penny spent on business-related purchases, such as office supplies, equipment, travel expenses, entertainment, and utilities.
This enables companies to maintain excellent financial health, make informed decisions, and stay compliant with tax laws. Additionally, tracking expenses can help businesses identify areas for cost-cutting or better budget allocation.
Overview of the expense tracking software landscape
Software isn’t the only way to track expenses. SMBs have traditionally used paper-based methods or simple spreadsheets to keep tabs on their spending. But, as technology has evolved and small to mid-sized businesses grapple with multiple responsibilities, switching to a digital platform simplifies expense tracking. In fact, research suggests that companies can save up to 30,000 hours per year by using dedicated systems instead of legacy software or Excel spreadsheets, etc.
The latest expense-tracking software offers mobile-first platforms, AI integrations, and industry-specific tools. It’s no surprise then, that demand for the market is poised to reach a whopping $13.15 billion by 2030.
5 benefits of expense tracking software for HR professionals
With the right platform in place, companies of any size or type can experience numerous advantages of digitizing their expense administration. The best expense-tracking solutions:
Traditional ways of tracking expenses can be very time-consuming. Most modern platforms streamline these processes by allowing users to submit expense reimbursement requests from anywhere and on any device, providing a fast and consistent experience that enhances efficiency across your internal operations.
Quality expense tracking tools allow you to set up rules to route each logged expense to the appropriate person for approval or even auto-approve recurring entries. Real-time notifications and automated workflows support this process, ensuring all expense tasks are reviewed quickly.
With advanced expense-tracking software, companies can unlock powerful features for improving budgeting and forecasting. Comprehensive reporting and data visualizations provide a clear, structured view of expense data, making it easier to identify trends, adjust policies, and optimize spending strategies. These insights empower HR and finance professionals to guide their organizations toward smarter financial decision-making with confidence.
Example: Imagine you run a quarterly report that reveals an unusually high number of expenses for office supplies. With this insight, you can investigate and find a better supplier to reduce costs or implement policies to discourage frivolous spending.
People are at the heart of your small to mid-sized business. When SMB owners provide their employees with a frictionless experience, they’re more likely to increase engagement, drive performance and retain their best talent — all the ingredients required to take a business from strength to strength.
The right platform simplifies expense tracking, making it quick and easy for team members to log the details and see the status of their reimbursement requests.
Many businesses struggle with human error in their spend management processes. A manual approach certainly leaves room for inconsistencies and noncompliant practices that could lead to fines or audits.
Human error can result in mis-keyed expense information, entries being logged twice, or lost receipts. But expense tracking software minimizes these risks with automated workflows and notifications to help keep everyone on track.
6 key features to look for in time and expense tracking software
With 100+ types of expense tracking tools in the market, it can be daunting for business owners to select a platform that’s the best fit for their needs and budget. After all, an SMB won’t need the breadth of features and functionality available in an enterprise system. Try focusing on the following:
Customization options
Out-of-the-box software with templates can be a great time-saver, especially if your small or medium-sized business lacks expertise in accounting and managing expenses. But they should never be so rigid that they don’t accurately reflect your internal operations. Look for expense tracking software with the ability to align with the workflows in your specific business.
Manual methods of inputting data, generating reports, and printing off files will eat into your teams’ time and detract from more strategic, value-adding work. Expense-tracking software should take the grunt work out of these repetitive tasks with built-in automation capabilities. Some examples of automated workflows include:
- Approving expense claims that match predefined criteria (e.g., correct categories like "Travel" or "Meals.")
- Triggering a reimbursement process directly to the employee’s bank account or payroll processing system that kicks in once an expense is approved (either automatically or manually).
- Automatically categorizing and logging receipts from submitted expense reports for compliance and auditing purposes.
Most small to mid-sized businesses will already be using a lean tech stack that might consist of different tools for accounting, payroll, communication, etc. And because expense tracking naturally interacts with all these systems, the platform you select should play nicely with your other apps.
Check if your platform of choice offers native integrations, plugins, or APIs that allow you to sync data from these apps.
Technology is only valuable to your business if it’s adopted successfully and works without a hitch. Intuitive interfaces and clear navigation minimize the amount of training required, so choose expense tracking software that your employees will be able to use without much handholding.
Modern expense tracking isn’t an activity tied to office spaces and desktop computers. Small to mid-sized business owners and their employees can access tool dashboards, receipts, and insights from the palm of their hands using platforms with built-in mobile accessibility. Whether an employee wants to upload a meal receipt automatically using their smartphone or the owner wants to check the company’s financial health while they’re on vacation, this functionality offers 24/7 convenience.
Compliance and security
Ensure the platform you select enforces security protocols like SSL encryption and data backups for all your records. As a business owner, you’re also responsible for complying with IRS regulations regarding expense tracking and management. Be sure to select a platform that has built-in compliance checks and reporting features to make tax season less stressful.
How to choose the right tool to track company expenses
Following a particular process can help you create a shortlist of expense-tracking solutions as you conduct vendor research. Work through the steps below to find the platform for your business:
Begin by clarifying what you need from an expense tracker, which may be different from the bells and whistles some vendors may promote to you. Come to any product demo or sales conversation prepared with answers to the following questions:
- What is my organization’s headcount, and is this likely to change in the next one to five years?
- What does our expense volume look like?
- What types of expenses do we typically have? Can we easily divide these into categories?
- What specific pain points do our internal teams have in tracking expenses?
- What do our employees say about their experiences of expense logging or reimbursements?
There are two aspects to the cost evaluation of any expense tracking software. The first is to understand your total budget for this type of technology, and the second is to be aware of the different pricing models vendors offer.
Ask yourself some of the following questions:
- How much have we set aside for expense tracking software?
- How much money could we save by eliminating the manual tasks associated with our current approach?
- Would we prefer a monthly or annual subscription model?
- Is it easy to upgrade or downgrade our package if our needs or headcount change?
- Will we need extra training, enhanced customer support, or implementation help?
Based on your budget and preferred pricing model, prioritize your must-have features versus your nice-to-haves.
Example: One vendor may offer drag-and-drop workflow functionality as part of their basic package, while another might only offer this at a premium price.
User feedback is one of the most important parts of the vendor research process, as it provides deep insights into how small to mid-sized businesses like yours have experienced a particular expense tracking product. We’d recommend consulting a variety of content to gain the most honest overview of a platform. These might include:
- Third-party software review sites such as Trustpilot, Capterra, or G2
- Vendor case studies
- Video testimonials
- Social media posts
In particular, look for evidence that the software you’re considering can effectively solve your company’s most common pain points.
Ideally, your expense tracker will work smoothly and need minimal intervention. But if your employees have a question or problem, it’s helpful if the vendor can offer effective support options.
Example: Some vendors might only offer email support during certain hours of the day with their basic package, while others provide live chat and phone support on all plans.
Take the stress out of small to mid-sized business expense tracking with UKG Ready
Using manual methods for expense tracking is a costly inefficiency. Payment errors, time-consuming reimbursements, and limited visibility into spending trends can all hold your business back.
UKG Ready® offers an alternative. As part of an intuitive, centralized HR and payroll software designed specifically for small to mid-sized businesses, our Expense Tracking feature will transform your approach to managing expenses by offering:
- Easy-to-configure rules by expense type for seamless policy enforcement
- Drag-and-drop workflows to customize approval processes
- Automated notifications to keep expense claims moving
- Mobile-friendly access for expense submissions anytime, anywhere
- Out-of-the-box expense types for quick and accurate tracking
- Effective mileage rate tracking for accurate reimbursements
- Tools to differentiate reimbursable vs. non-reimbursable expenses
- Real-time expense status and receipt review capabilities
Midmarket business owner Denise T. describes UKG Ready as a lifesaver:
“As a business owner of 19 years, I am overwhelmed [at] how helpful UKG Ready has been for our company. It has provided clear direction for my other team members and access to the information they need to do their jobs effectively. UKG Ready is so powerful and comprehensive.”
Ready to learn how UKG Ready Expense Tracking can elevate your business by removing the complexities of manual expense tracking? View a UKG Ready product demo today or get in touch with our knowledgeable sales team.
