The wide array of financial software today has blurred the distinction between Accounting Software and an Expense Management System.
A lot of people use these two concepts interchangeably, but, technically, they are different.
What is an Accounting System?
An accounting system is a System of Record or a General Ledger that allows a business to keep track of all types of financial transactions, including sales (invoices and income), purchases (expenses), liabilities (funding, accounts payable), etc.
Here, by a system of record, it means that the system is the single source of truth about a particular department or company.
On the other hand, workflow applications enable the employees to do work.
So, basically, a Spend or Expense Management System is a workflow application.
Workflow applications increase productivity ensures compliance & reduces the cost of handling operations.
Spend & Expense Management systems are Workflow Applications
Spend Management includes the workflow automation of 2 Components both of which integrate with an Accounting System.
- Expense Management System
- Vendor Payment System
Expense management refers to the systems deployed by a business to process, pay, and audit employee-initiated expenses. These costs include, but are not limited to, expenses incurred for travel and entertainment.
Vendor Payments refers to the systems deployed by a business to process, pay, and audit employee-initiated payments with respect to invoices raised by vendors. These payments include, but are not limited to, payments with respect to invoices raised by the vendors.
Spend Management System includes the procedures & policies that govern the spending with respect to employee front office expenses like employee expenses & back office expenses like vendor related spend, along with the technologies and services utilized to process and analyze the data associated with it.
Advanced Spend Management System
Advanced Spend or Expense Management Systems are also enabled with Payment Instruments for processing payments directly from the system allowing a more seamless experience for the finance teams and allowing the business to achieve more control over their spend.
Finly’s payment-enabled Spend Management System, being one of the most advanced payments enabled Spend Management System in the market, adapts to the workflow & process followed by businesses enabling finance teams to achieve far greater efficiency in performing their day to day operations.
Source:“Expense management.” (n.d.). In Wikipedia. Retrieved April 15, 2018, from https://en.wikipedia.org/wiki/Expense_management