Small business expense management is broken. Here’s how to fix it.

Small businesses waste too much time and money managing their expenses. Dealing with expense reports, digging through the trash for missing receipts, and bickering with employees about what’s reimbursable and what’s not—are all big-time productivity suckers. These tasks are not the things a small business should be focusing on, but unfortunately, many are face down in piles of this stuff, wishing they could go back to working on what matters. 

The broken state of small business expense management

Here’s how small business expense management (doesn’t) work today: 

  • Employees are issued company credit cards or use their own cards for business expenses, and request reimbursement later. Company credit cards have little to no limits or spend control capabilities, so employees have their company’s entire credit limit at their disposal while out in the field. If they’re using personal cards, it’s often not clear what exactly they can reimburse and what they can’t. Is this 6-pack of beer reimbursable? What about this $180 with our customer?
  • Whether they’re using a company credit card or their own card, they need to hang on to those receipts to make sure they can prove that their spending is on approved items only. Once they’re back at their desks, they have to manually fill out an expense report and attach a receipt for each item to it. This process leaves open a ton of room for mistakes and fraud. 
  • Using the (often error-filled) expense report, the company accountant manually inputs expenses and categories into the accounting software, which again leaves room for errors in translation categorization and budget allocation. Once this is done, employees who used their personal cards can get reimbursed, which often doesn’t happen until 30 days later. Often, this leaves enough time for interest charges on the employee’s credit card to kick in, and they won’t get reimbursed for that. 

Hidden costs and lack of control

According to the Global Business Travel Organization, processing a single expense report costs $58 on average. So when you start doing the math, things add up quickly. For a company that processes thousands of expense reports a year, or even just hundreds, you’re talking about a large hidden cost of not only money but time. 

On top of that, when using most corporate credit cards or personal cards, small businesses are left with little to no control over company spending. They let employees overspend on corporate cards or get reimbursed for iffy expenses that are not clearly defined by the expense reimbursement policy (if they have one at all). 

Solutions for thee, not for me

There are some expense management platforms that address these problems such as Ramp, Divvy, and Expensify. However, these platforms have made themselves out of the reach of many small businesses. 

For example, Ramp requires that a business have $75,000 in a business bank account to qualify. While Divvy only offers credit and does an extensive credit check that can take 21 days or more to complete, which can exclude businesses without pre-existing credit history or only offer them a lower credit limit than they need. Expensify has paid plans that are out of reach for many small businesses and has typically targeted their offering to larger companies only.

So what is a small business to do?

ClearSpend is an expense management solution that’s taken note of the lack of a small business solution and recently entered the market to fill that void. They offer small businesses a quick and easy way to get rid of personal card use and eliminate the need for expense reports— and it’s completely free.

Small businesses can create as many ClearSpend Visa cards as they want. Cards are funded from a business bank account and use debit instead of credit so no credit check is required. This allows businesses to get up and running in days instead of weeks (or months). 

They also offer tight spend control features that can be embedded directly onto the cards so that employees can only spend company funds on approved merchants, or within daily or per-transaction limits. 

Hopefully, ClearSpend can give small businesses an easy way to end these expense management frustrations that have gone on for far too long. 

Brett Sartorial

Brett is a business journalist with a focus on corporate strategy and leadership. With over 15 years of experience covering the corporate world, Brett has a reputation for being a knowledgeable, analytical and insightful journalist. He has a deep understanding of the business strategies and leadership principles that drive the world's most successful companies, and is able to explain them in a clear and compelling way. Throughout his career, Brett has interviewed some of the most influential business leaders and has covered major business events such as the World Economic Forum and the Davos. He is also a regular contributor to leading business publications and has won several awards for his work.