Why SMEs need expense management software
In today's rapidly evolving business landscape companies are looking to spend smarter; maximizing ROI on every spend, automating processes and focusing on long-term sustainability over short-term growth.
One significant hurdle every business continually faces is expense management, involving the daunting task of managing receipts, tracking expenses meticulously, and ensuring compliance with company policies. This familiar headache is encountered not only by larger corporations but also by SMEs. The emergence of expense management tools and the new breed of Spend Management software has found its way into large organizations over time as they grow. These tools are not exclusive to big enterprises; instead, they represent a game-changing solution that SMEs can and should embrace to streamline their financial processes.
The 2022 Global Payment Report by MasterCard reveals a significant drive to phase out cash and check payments for bills and government disbursements. This shift will mainly affect petty cash usage, which can be efficiently addressed by the streamlined issuance of virtual and physical cards made possible by corporate cards and spend management SaaS companies.
The worldwide trend of transitioning to the latest version of spend management software, which provides analytical tools and simplifies the entire company's expenses, has been especially prominent in the MENA region. Every dollar counts in business, which is especially important in an SME setting. Working within tight margins means SMEs can't afford inefficiencies, inaccuracies, or, worse, fraud in their spend management. And let's not forget the biggest competitive advantage an SME has against large corporations – their agility – which can be undermined by sluggish, manual spend tracking. Why allow such an essential yet tedious task to slow the company down? That's where spend management software, like Qashio, generally have the biggest benefit.
According to a recent global survey by Visa, 71 percent of SMEs in UAE, compared to 59 percent globally, reported being cashless or planning to go cashless by 2024. This trend aligns with the UAE and KSA governments' visions for a ‘cashless society’.Global survey by Visa
While the first wave of fintech focused on Digital Payments, the next wave will be building the second layer of applications for fintechs empowered by digital transactions. These innovative technologies are making hyper-personalized experiences a reality, which in turn is fuelling the demand for a 24x7 digital experience. According to a recent global survey by Visa, 71 percent of SMEs in UAE, compared to 59 percent globally, reported being cashless or planning to go cashless by 2024. This trend aligns with the UAE and KSA governments' visions for a ‘cashless society’.
Spend management software takes the administrative nightmare of expense reporting and transforms it into an efficient, accurate, and controlled process. It replaces labour-intensive data entry and significantly reduces the room for error and ensures smoother operations.
Here are some reasons why automated spend management is crucial for SMEs:
Saving Time and Increasing Efficiency: Spendesk data reveals that the average expense claim takes 20 minutes to process, and with numerous claims being submitted monthly, SMEs incur both time and financial costs managing this process. Automated spend management is useful in removing time-consuming processing and approving expenses. It significantly reduces administrative tasks, freeing up the team to concentrate on the more strategic initiatives – the kind of work that truly drives growth and innovation within an SME.
Improved Financial Control and Transparency: For a founder, having a constant bird's-eye view of an SME's finances is a necessity. Real-time expense tracking provides this, giving unprecedented visibility into a company's spending patterns. Executives know where every dollar goes, empowering them to make data-driven decisions and control costs more effectively.
Cost-effective: One of the biggest concerns SMEs may have with adopting new technologies is the expense and time related to implementation. Most business owners are surprised to find out how quickly and inexpensively they can get started using a spend software like Qashio and can realise a return on investment, in both monetary and time investment, almost immediately. Moreover, Global Business Travel Association (GBTA) revealed that on average 1 out of 5 (19%) reports have errors. Companies process around 51,000 expense reports each year meaning companies around the globe spend, on average, approximately half a million dollars and nearly 3,000 hours correcting errors in expense reports annually, highlighting the need for integrated spend management software.
Compliance and Avoiding Fraud: Due to elevated stress levels and constantly changing circumstances, it's not uncommon for funds to be misplaced or unaccounted for. Many employees may take advantage of this. The PwC MENA's Global Economic Crime and Fraud Survey 2022 revealed staggering total losses of $42 billion, underscoring the financial toll that expense fraud can take on a business. Expense management software keeps the game fair by including policy enforcement features, ensuring that all expense claims play by the rules. And expense management software can help identify fraudulent patterns, keeping money safe from fraudsters.
Support to Strategic Decision-Making: What if data could not only provide a snapshot of the company’s current financial situation but also guide strategic planning? Perhaps one of spend management’s most impactful benefits is the ability to gain real-time insights into a company's spending. This powerful tool can drive quicker and more informed decision-making, helping SMEs seize opportunities and address issues head-on. The data generated can feed into crucial processes like budgeting, forecasting, and resource allocation.
In a nutshell, spend management software is the helping hand SMEs need to efficiently manage their expenses, allowing them to focus their energy on growth and innovation. After all, a company’s time is better spent developing the next game-changing product or service, not sifting through a sea of receipts.
About the author:
Armin Moradi is the Co-Founder and Chief Executive Officer of Qashio where he is responsible for commercial growth and scaling up operations while focusing on increasing revenue streams and business development.
A renowned specialist in the GCC region’s startup and enterprise finance technology space, Armin's 12-year experience spans various industries including Fintech & Enterprise Software, eCommerce and retail, IT consulting and Foodtech.
