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E X P E N S E M A N AG E M E N T F O R AC C O U N TA N T S

CPAs have a somewhat unfair reputation for appreciating the math side of life: the abacus, counting beans,

calculator bingo, and doing friends’ taxes for fun (tax season is like the Holidays for them). Well, we see

you, Accountants, and we see these as ridiculous stereotypes that simplify entire departments—entire

professions, even. Accountants vary in personality, strengths, and hobbies just like everyone else. What

binds them together is the shared knowledge that inefficient expense management slows them down and

makes for a stressful end to any month, financial quarter, and/or year-end.

Accountants know the industry undergoes dramatic changes at the speed of changing technology – and

the effects of those changes can hit seemingly all at once to produce a whole new set of major business

challenges. Expense management tops the list as one of the most daunting challenges for Accounting Teams

and businesses as a whole.

No matter what type of clients you serve, they all have at least one thing in common – expenses and the

need for tools to manage them. Expense management solutions should streamline expense processing and

reporting—unfortunately, that isn’t always the case. We’re here to help separate the wheat from the chaff.

Expense software has become an imperative for all businesses, but each system has built-in pros and cons.

We’ve compiled a list of the types of employee expense management solutions on the market today, as well

as the advantages and potential hang-ups associated with each. Let’s dive in.

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All business trips have one thing in common: clients and their staff spending their own cash for business

purposes. Enter reimbursements solutions to save the day. Ideal for small businesses, they make it easy to

process reimbursement receipts.

Although time-consuming, the solution should return accurate transaction reports as finance departments

typically cross-check all funds and reimbursements manually. Manually. The human double-check makes

reimbursement the least risky EEM solution in the eyes of many companies.

Pros

• Employees can make purchases on the go

• Easily identify fraudulence

• Relatively low compliance risk

Cons

• Possible lack of enough personal credit to make

purchases

• Multi-level approval process causes delays in

reimbursement process

• Reimbursement issues may arise – time,

unapproved expenses, improper coding

• Not a scalable solution for large or growing

enterprises

R E I M B U R S E M E N T

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Petty cash provides liquid cash for expenses. In this, the funds are budgeted to employees based on

projected expenses for the trip. Employees handle cash, make purchases, and must meticulously keep track

of receipts.

While this may work well for businesses, it comes with potential security risks and puts the onus of expense

tracking on employees. Receipt loss complicates the reporting process and distributed funds should always

exceed projected expenses, leaving room for a whole host of latent issues.

Pros

• Ideal for small businesses

• No credit risk

• No interest charges

Cons

• Overspending and fraudulence

• Delays due to accounting errors

• Does not work for organizations with remote

employees

P E T T Y C A S H

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The plastic approach typically requires your client to establish a line of connection with the credit

card company. The business distributes corporate credit cards, generally with low spending limits, for

employee use. The company then pays off the balance at the end of the month, but as the business carries

responsibility for all employee charges, the solution carries greater risk overall. Additionally, overspending

and payment delays levy added fees.

Pros

• Company’s credit rating could improve

• Easy to track expenses through bank account

• Allows businesses to spend more

• Get credit card rewards

Cons

• Interest for carrying a balance

• High fees for late payments

• Credit card misuse on unapproved expenses

• Need to store receipts

C O R P O R AT E C R E D I T C A R D S

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Companies typically utilize prepaid cards for employee business-related purchases. A company will

distribute individual or dependent cards funded with different amounts depending on estimated need to

cover the expense. Employees must keep track of all receipts, which the accounting department then checks

against expected spend.

Business expense prepaid cards work well for employee expenses as most companies restrict card use to the

certain amount that the company places on the card. Additionally, they can track spend through proprietary

software, eliminating the need for receipt collection and reconciliation.

Pros

• Streamlines expense reporting process by

syncing with accounting software

• Fast and flexible spending

• Gain control over spending

• The ability to set daily spending limits

• No credit risk

Cons

• Not ideal for small businesses

• Not the right fit for businesses with low volume

expenses

• Funding employee cards requires capital

B U S I N E S S E X P E N S E P R E PA I D C A R D

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C O N C L U S I O N

Various automated expense reporting solutions exist within the market that reduce the employee and

management review time associated with managing employee expenses. You know your client’s business

better than anyone else, and ultimately making the final decision, according to what works best, falls on you.

Until then, let your CPA flag fly, (abacus optional)!

A B O U T D I V V Y

We’ve tamed the dreaded budget beast. We’ve slain spreadsheet expenses and reactive reimbursement.

Take up your broadsword and join in the fight to end massive inefficiency and make way for simple spend.

Seize the Divvy!

Divvy is the first free, fully-automated spend, budget, and expense management platform. Divvy not only

automates expense report management, receipt tracking, and business travel, it provides real-time budget

visibility so you can proactively make spending decisions to better maximize company budgets.

Designed for businesses to control and obtain visibility over spend as it happens. Never overspend again.

Crush at accounting. Dominate per diems. Eliminate manual expensing. Rule over reporting. All that noise

generates automatically with Divvy.

To learn how you can help your clients save time, money, and frustration managing their spend and expenses,

contact Divvy at 877.77.DIVVY, visit www.divvypay.com, or email us at info@divvypay.com.

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