Our Systems Advisory Service team is often asked: “What is the best app for my business?” Unfortunately, my standard answer is almost always: “That depends!”. With over 1,000 apps that integrate with cloud finance programmes, finding the right app that provides the best solution for your business can be tricky.
At Scrutton Bland we aim to help with that decision-making process, and our Systems Advisory Service has been researching, trialling and reviewing apps so that we can provide insights for our clients on how they compare. Over time, we will release articles that summarise our results, with this one being focused on bills and expenses.
Bills and expenses is a large area, covering overheads, staff expenses, credit cards and mileage. There are over 50 authorised app partners in this field that connect with the main programmes such as Xero, QuickBooks and Sage, making it one of the most contested competitive in of the app marketplace. Picking the correct app to manage your bills and expenses can be complex and is dependent on how you operate or what you want to achieve.
Narrowing the search
When selecting the right app, you first need to identify the problems you are looking to solve. For example, are you aiming to set up flexible working, or do you need to digitise document storage? Maybe it’s streamlining staff expenses or wanting to bring an approval process together? Although you can eliminate some of the available apps based on others being better, most are strong at what they focus on, and you need to establish if this focus is the right one for you. Another consideration to bear in mind is whether you want an ‘all in one’ solution that will sacrifice on some functionality, or multiple apps that tick more boxes.
To assist in the selection process, we have grouped our analysis into different areas of focus.
Generally the first area to solve, overhead management requires good OCR (Optical Character Recognition) with the capability to grab and scan documents, and includes sufficient rules to automate the process and a good approval process to ensure the expenses are relevant and correctly coded.
The more well- known software providers in this area are Receipt Bank, AutoEntry and Hubdoc. AutoEntry is now owned by Sage and Hubdoc by Xero, making Receipt Bank the only independent party. That said, all apps work independently and integrate across the different solutions. All three are similar in how they operate. We have found Hubdoc generally faster at scanning, Receipt Bank generally more accurate and AutoEntry more flexible. Receipt Bank is more user friendly whilst AutoEntry is strong at bringing in- line items on bills. All are similar in price, although Hubdoc is now included if you use Xero and so should be a serious consideration if you are on that solution.
(For a copy of the spreadsheet, please email me)
In summary, we generally find that Receipt Bank is the best solution for small businesses, as it is the easiest to use, and line items are generally not required as the document is attached for details. If you are on Xero but are yet to choose a bills and expenses app then it is worth picking up Hubdoc to see if that will work for you, but if you are already on Receipt Bank then we feel a move to Hubdoc would might be a step back and may be frustrating.
For larger businesses, a purchase order management system which incorporates bill payments is important. There are multiple team members that will operate in this area and defined roles and controls become a key part of the system requirements.
If you require a bit more complexity then Lightyear, Entryless or iCompleat may be better options for you, and for the all-encompassing solution then Zahara may be the best fit. Lightyear brings the best features of Receipt Bank and AutoEntry together, with approvals. Entryless brings bill payments to the table, whilst iCompleat focuses on purchase order management. Zahara is the most robust of the apps in this area, with budgeting and spend control brought in. Entryless can be comparable in cost to the smaller systems, whereas the others start at double the cost and increase in price from there.
As a separate tool, ApprovalMax is an advanced approval mechanism and combines with the likes of Receipt Bank and AutoEntry to provide a great approval and purchase order solution. Unlike the larger systems which only work on single entities, ApprovalMax enables you to provide an integrated purchase management system for group companies, without the need to login to separate accounts.
In summary, we feel that that although Entryless is cheaper, it perhaps falls down in areas of functionality. Lightyear is a very good system and is worth considering if you want to make the step up. Zahara is very powerful but also expensive, which we have found is a deterrent for most small businesses.
Staff expenses can be handled in a number of ways, either in arrears after the expense has occurred, or in advance by restrictions on cards (see credit cards below). One historical way of paying for expenses is via payroll and to utilise apps effectively this link will need to be broken. There is no negative aspect in doing this as the expense systems allow simple payments at the same time as payroll with employees getting clarity on the separation via different lines on their bank statement.
We have found that the best dedicated staff expenses app is Expensify. It has great functionality for approval and management with integrated cards but at £5 per user per month, costs can add up. Xero expenses can provide a simpler solution for those that use Xero and at £2.50 per user per month with integrated mileage tracking it can tick the cost-effective box. However, approvals are basic, and cards cannot be integrated so there are limitations. Alternatively, Receipt Bank has a staff expenses system and when combined with ApprovalMax this can work effectively, for no additional cost (assuming you are already using these systems). Other systems to consider would be Entryless, Expend and Pleo which work effectively but staff expenses are not the key features of their relevant systems.
In summary, as a standalone expenses system Expensify is the one to go for. If you want to add staff expenses onto purchase order management then Receipt Bank and ApprovalMax would work effectively.
Another key area of expenses is in relation to credit cards. Historically, these are generally held by directors and senior management, with other employees making informal requests for credit card payments via these individuals. Modern cloud apps allow you to expand this to more, if not all employees.
Pleo, Soldo and Expend are apps that enable you to give cards to employees for business expenditure. They have a number of upfront restrictions that manage spending habits based on individual, team or department allowances as well as on areas of spend, allowing you to prevent payments before they occur. With live prompts for receipt capture they are proven to be more effective in ensuring paperwork is also digitally captured. Pleo and Soldo stand out in this field, with Expend great as an all- in- one solution for overheads as well.
Our preference is Pleo, purely based on the way it can group different types of expenses, enabling you to translate accounting analysis terms into words that your team can understand. These solutions work best when your teams are usually small in number and are generally trusted with their own expenses. It should be noted that all these solutions are corporate cards, not credit cards, and so require up- front credit which can affect cash flow. That said, Pleo is developing credit card facilities that it is starting to roll out.
When it comes to integrating with your current credit card facility then Expensify is the standout solution in this area.
As we have said, there is no standout solution and when identifying the best app. “It Depends” will continue to be the answer, as it always relies on what you are looking for.
That said, we have identified a few key considerations. For:
- one-man bands that don’t have expenses on credit terms, if you use Xero then Xero Expenses would be the best solution for you.
- smaller businesses we advise using Receipt Bank, or Hubdoc if you are already on Xero and cost is an issue.
- purchase management consider Lightyear, or a combination of Receipt Bank and ApprovalMax, especially if you have multiple companies you need to manage expenses for.
- staff expenses and credit cards consider Expensify or Pleo. If you use Receipt Bank already then consider using Receipt Bank and ApprovalMax together as a low-cost alternative.