How can Life Sciences expense management drive compliance and growth

Life sciences expense management refers to the systems and processes you use to track, control, and report spending. It covers everything from lab supplies and CRO contracts to physician-related payments and procurement costs, all under regulations that demand accuracy and transparency.

The complexity comes from balancing unpredictable research budgets, multiple vendor relationships, and strict reporting standards. Without structured expense management, you risk compliance gaps, overspending, and slow financial closes that hold back growth.

Handled well, expense management does more than control costs. It ensures every transaction has the right documentation, keeps trial and operational budgets on track, and creates the financial visibility that regulators and funders expect.

What poor spend management really costs life sciences companies

Poor expense management affects several critical areas in life sciences. Inefficiencies and untracked spending drain R&D budgets and reduce the capital available for discovery.

Compliance risks rise when records are incomplete or inconsistent. Vendor payments that stall or processes that remain fragmented slow down trial progress. Together, these breakdowns limit both growth and the ability to deliver results on time.

Shortened runway

Poor expense management reduces how far your funding can take you. In life sciences, where the average cost of bringing a new drug to market exceeds $2.5 billion, every dollar lost to inefficiency directly cuts into the time you have to reach key milestones. Even small oversights, such as untracked vendor payments or duplicate invoices, compound over time and shrink the capital available for research and trials.

For early-stage biotech firms, survival often depends on securing the next round of funding. Uncontrolled expenses shorten timelines and reduce your ability to deliver the progress that investors expect.

Compliance penalties

Regulatory reporting in life sciences requires precise documentation of every transaction tied to research, trials, and physician engagement. Inaccurate or incomplete records expose you to heavy penalties. Over the last three decades, pharmaceutical manufacturers have paid $62.3 billion in penalties linked to persistent misconduct. Many of these cases trace back to weaknesses in tracking and reporting systems.

When expense data is fragmented across teams and tools, the risk of reporting errors rises. Even small gaps in documentation can trigger audits that consume a significant amount of time and resources. For growing companies, these penalties drain capital and damage credibility with regulators.

Delayed trials

Clinical trials already carry significant costs, with estimates placing the average expense between $161 million and $2 billion per trial. Poor expense management adds delays that make those numbers climb even higher. Vendor payments that do not process on time slow down supply deliveries, contract research activities, and site operations.

Incomplete or inconsistent expense data also disrupts trial planning, leaving you without a clear picture of available resources. Each delay extends timelines, increases costs, and reduces the speed at which discoveries reach the market.

Lost investor trust

Investors rely on accurate and timely financial reporting to evaluate progress and make funding decisions. When expense management is weak, financial statements show inconsistencies that raise concerns about oversight.

Delays in closing books or gaps in expense data reduce your credibility and increase doubts about whether resources are being used effectively. For companies that depend on multiple rounds of funding, even small lapses in financial discipline can limit access to new investment and slow future growth.

Finance team overload

Life sciences companies often run lean finance teams, especially in the early and mid stages. Poor expense management increases manual work and leaves your staff spending hours reconciling invoices and preparing compliance and expense reports.

Research shows that 48% of all organizations fail to meet at least half of their strategic targets, and overloaded finance teams are a key reason why. Time spent on transaction processing reduces the capacity available for forecasting, scenario modeling, or preparing for audits.

How do manual workflows hold back finance teams?

Manual processes weigh down finance teams by diverting time away from strategy and increasing the chance of costly mistakes. In life sciences, where compliance and accuracy are critical, these inefficiencies multiply as trials and vendor networks expand.

• Slow reconciliation of expenses: Manually matching receipts, invoices, and payments often takes days each month. This hinders financial visibility and keeps your team preoccupied with low-value tasks, rather than focusing on forward-looking analysis.
• Higher error rates: Every manual entry introduces the chance of a mistake. Even small errors can ripple across financial reports, leading to inaccurate budgets or discrepancies that require extra time to correct.
• Delayed reporting cycles: When financial data is collected by hand, closing the books stretches out. This delay leaves you with outdated information and makes it harder to manage trial budgets or react quickly to cost overruns.
• Compliance blind spots: Fragmented workflows make it difficult to collect and store the documentation regulators require. Missing or incomplete records increase the risk of compliance issues and add pressure during audits.
• Reduced capacity for strategic work: The more time finance teams spend on transaction processing, the less time remains for planning, forecasting, and supporting fundraising. This imbalance limits the strategic contribution of finance and slows overall growth.

How does expense management work in life sciences?

Expense management in life sciences is not the job of a single team. Finance leads set the structure and ensure accurate reporting. Compliance officers translate regulations into policies that guide daily activity.

Department heads and site staff capture spend at the source, while accounts payable manages vendor payments and reconciliations. FP&A teams use the data to forecast budgets, and HR supports training to keep everyone aligned. Each group plays a role in building a process that balances cost control, compliance, and scalability.

The checklist below outlines a step-by-step approach that shows how these responsibilities come together.

Key practices that set strong finance teams apart

Finance teams in life sciences manage expenses under more pressure than most industries. Trial costs shift quickly, vendor networks span globally, and regulators demand complete accuracy.

Teams that stand out build practices that give them control in this environment. They create systems that not only handle day-to-day spend but also generate insights that guide growth and strengthen compliance.

Real-time visibility into trial and vendor payments

You gain value when payments are visible as soon as they occur. Real-time visibility means you always know how much has been spent by trial, site, or vendor without waiting for month-end reports.

This clarity reduces the chance of overspending and allows you to track burn rates against budgets at the moment. Nearly 40% of CFOs say they do not completely trust the accuracy of their financial data. Real-time visibility helps rebuild that trust and supports confident decision-making.

Ramp brings this to life through dashboards that update as receipts arrive, letting you monitor R&D or CRO expenditures in real time.

Budget forecasting with live spend data

Forecasting becomes more reliable when it uses actual spend data instead of outdated summaries. Live data lets you see how budgets are tracking against real activity across R&D, trials, and vendor contracts.

This practice helps you adjust quickly when costs shift and gives stakeholders more confidence in your financial planning.

Automated audit trails to stay inspection-ready

Audit trails record every action linked to a financial transaction, including who approved it, when it was coded, and how documentation was attached. When this process is automated, you avoid the gaps and errors that come with manual tracking.

Sunshine Act reporting covers billions of dollars in transfers of value each year for life sciences companies. Having a complete and automated trail reduces risk and saves time during inspections.

Seamless ERP and accounting integrations

Integrations connect your expense management tools with core systems, such as your ERP and accounting software. This eliminates manual data transfers and ensures every transaction flows directly into the general ledger. Teams that rely on disconnected systems often face higher error rates and slower closes, while integrated systems allow faster reconciliations and more accurate reporting.

How expense and financial management evolves across company stages

Expense management looks different at each stage of a life sciences company. Early on, you face pressure to stretch limited funding while preparing for future audits. As you enter the growth phase, more trials and vendors expand the volume of expenses to manage. Once you reach commercial scale, investor scrutiny and regulatory reporting add new layers of complexity.

By aligning expense management practices with the realities of each stage, you create systems that keep costs in check and build the trust of regulators and investors.

Early-stage biotech

At the earliest stage, your main challenge is extending the runway while proving progress to investors. Funding is often limited, yet research and operational costs continue to rise rapidly. Expense management becomes a way to preserve capital and show that every dollar supports discovery.

Early biotech teams usually operate with small finance departments or outsource accounting entirely. This makes expense tracking more difficult when payments to labs, suppliers, and contractors increase. Without clear processes, untracked spending and duplicate invoices reduce the limited resources available for research.

Data shows that close to 90% of biotech startups fail before reaching clinical trials. Inefficient financial practices are one reason many cannot secure future rounds of funding. Strong expense management at this stage signals discipline to investors and helps you stay prepared for audits that can come earlier than expected.

Clinical stage organizations

As you move into the clinical stage, the financial picture changes. Multiple trials run concurrently, vendor networks expand, and global operations introduce additional complexity. Expense management during clinical trials now needs to scale without relying on a large finance team.

Processes that worked during the early stage often begin to strain under higher transaction volumes. Vendor invoices increase, clinical research organizations require milestone-based payments, and cross-border operations create new regulatory requirements. Finance teams face pressure to deliver timely reporting and keep expenses aligned with budgets.

Strong expense management reduces this risk by creating systems that consistently capture spend, standardize payments, and maintain audit readiness as the organization grows. For you, this means fewer bottlenecks and greater confidence in the financial health of expanding operations.

Commercial stage

At the commercial stage, financial oversight becomes even more critical. You now manage larger sales operations, post-market studies, and global compliance requirements. Expense management shifts from maintaining control during trials to sustaining accuracy across an expanding enterprise.

The stakes rise as regulators and investors expect a higher level of transparency. Public companies face strict reporting standards, and late or inaccurate disclosures can result in penalties or damaged credibility.

Expense volumes also increase as you add sales teams, marketing programs, and manufacturing partners. Finance teams need reliable systems that integrate across functions and regions, ensuring spend data remains accurate and available in real time.

Strong expense management at this stage supports investor trust, keeps compliance costs under control, and protects margins as the business scales globally.

Where Ramp fits into your expense management process

Ramp serves as the finance automation layer that supports the unique spending patterns of life sciences companies. Your expenses often span lab supplies, clinical trial vendors, research travel, and grant-specific budgets. Ramp captures each of these categories in real time and links them to the right project or compliance requirement.

The platform combines corporate cards, bill pay, and procurement tracking in a single system. Every transaction is automatically coded and matched to policies. For finance teams preparing for audits, this means cleaner records and shorter close cycles.

Ramp also supports compliance by attaching receipts, memos, and approvals at the point of purchase. This creates a ready-to-use audit trail that simplifies Sunshine Act reporting and grant documentation. For growing companies, it helps you scale trials and vendor networks without losing control of costs or compliance.