In this article
Spending made smarter
Easy-to-use cards, spend limits, approval flows, vendor payments —plus an average savings of 5%.1
|
4.8 Rating 4.8 rating
Error Message
No personal credit checks or founder guarantee.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Get fresh finance insights, monthly
Time and money-saving tips,
straight to your inbox
|
4.8 Rating 4.8 rating
Thanks for signing up
Oops! Something went wrong while submitting the form.

You might think that a corporate card with good cashback or points is sufficient for your business's expense management needs. However, that would be shortsighted. 

Companies who want to make their teams more efficient and achieve greater ROI are increasingly realizing the value of expense management tools. These tools can help business owners dig deeper into the context of their business spending, which is especially important in these economic times when expense management has become a necessity—not a nice-to-have. Without these tools, businesses of every size can accrue hidden costs on top of rising operating costs. While rewards like cashback can be helpful, expense management tools can actually provide a long-term market advantage.

Right now, businesses are being hindered by inflation that is making it even more expensive to fund day-to-day operations. Three-quarters of small businesses report being negatively affected by rising costs in the past six months, according to a recent Goldman Sachs survey.

Our own spending benchmarks for Q2 2022 show that companies big (and small) are seeing an uptick in spending across many categories. For example:

  • Shipping expenses soared for large enterprises, increasing 103% to overtake advertising, as their top expense. Software spend spiked too, up 68.3% on Q1 2022.
  • Merchandise costs remained the top expense for small businesses, although airlines, restaurants, and cloud computing transaction volume grew the fastest.
  • Advertising was the top expense for large SMBs and mid-market companies, while airline and restaurant costs were the fastest growing.

Expense management tools can help combat these rising costs and arm businesses with the technology they need to navigate the current economic climate and avoid costly mistakes, such as:

1. Missing saving opportunities

With the speed of business today, companies need to be able to get real-time insights into their spending at the click of a button, not at the end of the month. They also need to have access to the insights they need to ensure that they’re saving cash whenever possible and aren’t throwing money down the drain, e.g. on duplicate spend.

2. Chasing out-of-pocket expenses

Out-of-pocket expenses are a clear example of the drawbacks of not investing in expense management. Think about your own processes for a moment. Are you relying on employees to email you their invoices and receipts, and then having to manually track down and rectify out-of-policy spend? These steps can all be a real drain on finance’s time and it can create additional costs. With functionality like spend controls and pre-established expense policies, which can streamline these processes, you’ll be able to avoid such costly and unnecessary steps.  

3. Overpaying for software 

Once your SaaS needs pass around $10,000 for a piece of software, pricing can often seem like a black box. You could be vastly overpaying for contracts and not even know it. Procurement tools can help you manage vendors, stay notified of better prices, and even negotiate costs like pricing, terms, and licenses. 

4. Encountering messy vendor payments

Your vendors and suppliers each have their own payment terms and billing cycles. When you don’t have any flexibility in paying these contracts, you could be stuck adhering to rigid payment terms or late fees, which is a recipe for lumpy cash flow.  

5. Wasting top talent's time

The human factor just might be the biggest of all the hidden costs of unmanaged operating expenses. Employees usually don’t want to spend any time dealing with clunky expense systems that were designed for how businesses ran in the 90s. 

Similarly, finance doesn’t want the end-of-month close to feel like a game of hide-and-seek, one where they constantly have to nag teams and managers for mundane expense reports. Today, your talent wants to focus on high-value work that they actually enjoy. 

Getting serious about expense management 

Simply relying on monthly cashback as your main perk won’t solve any of the above errors. However, combining cashback with tools such as enterprise expense management software that can help you manage expenses, streamline operations, and automate the pain away will help set your business up for long-term growth. Businesses that use Ramp save an average of 3.5% in their first year. See how much expense management can save your team by signing up today.

Former Sr. Content Marketing Manager, Ramp

Prior to Ramp, Stefanie worked as a finance reporter at Institutional Investor, where she covered everything from options to pension funds. She graduated from the University of Delaware with a degree in English and a concentration in journalism and later earned an MA in education from NYU. When she isn't immersed in content and thought leadership, Stefanie loves to play any and all racquet sports.

Ramp is dedicated to helping businesses of all sizes make informed decisions. We adhere to strict editorial guidelines to ensure that our content meets and maintains our high standards.

FAQs

How Alexandra Lozano Immigration Law prepared for scale with Ramp

"I used to have to call our card provider and sit on the phone for a couple hours a week, I don’t have to do that with Ramp.”
Wayne Robinson, CFO, Alexandra Lozano Immigration Law

How Ramp helped Smart City Apartment Locating save time, expedite month close, and grow sustainably

"Five to 15 hours each month of non-value-add activities are off my plate. I’m able to be a strategic advisor versus just a tactical manager when it comes to spend management.”
Dustin Walsted, VP Finance, Smart City Apartment Locating

How TaskHuman built their runway with Ramp

“I’ve pretty much seen or used everything that’s out there, everything does something Ramp does, but nothing does everything Ramp does.”
Matthew Ferguson, Controller, TaskHuman

How First Tee transformed its bookkeeping and saved time with PwC and Ramp

"The efficiency of using PwC Bookkeeping Connect, coupled with the Ramp platform, has probably been about 75% time savings. Instead of every hour I would have had to spend on bookkeeping, I’m probably having to spend maybe 10 or 15 minutes.”
Dan Burke, CEO, First Tee San Francisco

How Mix Talent cut costs, gained transparency, and improved efficiency with Ramp

"I use Ramp’s functionality to examine the contracts and understand whether we’re getting the best terms, as opposed to just trying to get the bill paid. Ramp has allowed us to project cash flow so much better."
Paul Streitenberger, Accounting & Finance Lead, Mix Talent

How The Joffrey Ballet cut their month-end close time with Ramp

“One of the things I was looking for, and which Ramp has done for me beautifully, is to consolidate credit cards, ACH payments, check payments, and reimbursements into one place and give us a full picture for insights."
Gee Hoon Lim, Director of Finance, The Joffrey Ballet

How Beyond sped up reconciliation time 8x faster with Ramp

“With Ramp we close in 5-6 days, which is pretty quick for a company with four different subsidiaries."
Jake Steele, Senior Staff Accountant, Beyond