Spend management

Clear 5-minute guide on choosing business spend management software

Dec 15, 2024

Businesses waste nearly 10% of their budgets due to poor project performance and inefficient spend management. The right tool could save you thousands. 

Small inefficiencies can pile up into huge financial losses for organizations juggling travel expenses, supplier contracts, and invoice approvals. 

But with countless software options available, finding the perfect match can feel overwhelming. 

How do you make the right choice? 

We at Spendbase, specialize in helping companies optimize their SaaS portfolio. And this article will help you understand the different categories of business spend management (BSM) software and guide you in choosing the right one. 

By breaking down the key features, benefits, and real-life applications, we’ll navigate you through the clutter and help you find the right tool. 

The business spend management software market is confusing

Finding the right BSM software can feel impossible. 

There is an overabundance of options. From all-in-one platforms, to niche point solutions. Each tool claims to save you time, optimize your spending, and make your life easier. 

Many business spend management software companies specialize in certain areas, making it essential to identify which ones align best with your unique challenges.

But with all this noise, how are you supposed to find the right one? 

It’s like trying to find a tiny needle in an oversized haystack. 

And sites like G2 and Capterra — yes, they’re useful for reviews, but thrive on giving you every option. 

And here lies the paradox. When you have every choice available, it becomes even more difficult to choose.

Navigating the chaos takes more than guesswork. To find the right solution, you need a clear understanding of what’s out there and how it fits your needs.

7 BSM software categories explained using pizza 

Yes, you read that right…pizza. 

It can teach you a lot.

Managing pizza is surprisingly similar to managing your company’s spending. One wrong move, and suddenly you’ve got pineapple where it doesn’t belong (or an expense report that’s out of control).

To make things simple, the table below explains the different categories of BSM software using pizza.

Category Pizza usage Examples
Expense Management Software

“Expense Toppings Tracker”

I track how many slices of pepperoni my employees are adding and ensure it’s within the topping budget. Expensify, SAP Concur, Spendesk
Procurement Management Software

“Mozzarella Manager”

I negotiate with the cheese supplier and make sure we don’t run out of mozzarella. Coupa, Ariba, GEP SMART
Invoice Management Software

“Crust Invoice Cruncher”

I ensure the bakery gets paid for the crusts they delivered without missing an invoice. Bill.com, Tipalti, Stampli
Corporate Card Management Software

“Pizza Card Protector”

I give pizza cards to employees and track how much they’re spending on extra cheese. Brex, Ramp, Divvy
Travel and Expense Management Software

“Pizza Road Trip Planner”

I book travel for pizza expos and track all expenses for the trip. TripActions, Concur Travel
Accounts Payable Automation Software

“Pepperoni Paymaster”

I automate payments to the pepperoni supplier and track recurring orders. AvidXchange, Plate IQ, Beanworks
Strategic Spend Analytics Software 

“Slice Savings Strategist”

I analyse how much money we spend on toppings and suggest ways to save. Tableau, SpendHQ, Power BI

You have a basic overview but what about something more detailed?

Below you’ll see a more in-depth look at each BSM software category breaking down the features, benefits, and real-life applications. 

1. Expense Management Software

This category of BSM software tracks, reports, and controls employee expenses. It automates the process of capturing receipts, submitting expense reports, and ensuring policy compliance.

Key features:

  • Digital receipt capture.
  • Approval workflows.
  • Reimbursement tracking.

Who it’s for: 

  • HR teams managing employee expenses. 
  • Small to mid-sized companies with frequent reimbursements.
  • Businesses seeking to streamline expense tracking.

Business impact:

  • Reduces manual workload by automating expense submissions and approvals.
  • Speeds up reimbursement timelines, improving employee satisfaction.

Example: A growing startup with frequent employee travel uses this software to eliminate manual spreadsheets and reduce reimbursement delays.

Examples of tools: Expensify, SAP Concur, Spendesk, Brex, TripActions.

2. Procurement Management Software

This tool streamlines vendor management, purchase orders, and contract negotiations while enhancing strategic sourcing. It ensures procurement workflows are smooth and compliant.

Key features:

  • Vendor performance tracking and relationship management.
  • Automated purchase order creation and approval workflows.
  • Tools for contract negotiation and storage.
  • Spend analysis for cost optimization.

Who it’s for:

  • CFOs and procurement teams handling multiple suppliers.
  • Companies seeking to improve vendor relationships and reduce procurement inefficiencies.

Business impact:

  • Saves time by automating manual tasks like order processing.
  • Enhances supplier relationships through data-driven performance tracking.
  • Reduces procurement costs via better contract negotiations and sourcing strategies.

Example: A medium-sized retailer uses procurement software to manage 100+ supplier contracts, ensuring on-time deliveries and negotiating 20% savings through improved sourcing insights.

Examples of tools: Coupa, Ariba (SAP), GEP SMART, Ivalua, Oracle Procurement Cloud.

3. Invoice Management Software

This tool automates the entire invoice lifecycle, from processing and approvals to payment tracking and accounts payable optimization, ensuring smooth financial operations.

Key features:

  • Digital invoice processing and approval routing.
  • Vendor payment tracking and reconciliation tools.
  • Automated reminders for payment deadlines.
  • Accounts payable optimization with AI-driven insights.

Who it’s for:

  • Finance teams seeking to reduce manual effort and errors in invoice processing.
  • Businesses with high invoice volumes needing efficient accounts payable management.

Business impact:

  • Reduces invoice processing time, speeding up vendor payments.
  • Improves vendor relationships with timely, accurate payments.
  • Decreases manual errors, ensuring compliance and accuracy in financial records.

Example: A logistics company with 500 monthly invoices uses invoice management software to automate processing, saving 10+ hours a week and avoiding late payment penalties.

Examples of tools: Bill.com, AvidXchange, Tipalti, Airwallex, Stampli.

4. Corporate Card Management Software

Software that simplifies managing company credit card expenses with real-time tracking, automated expense categorization, and spending controls. It helps businesses issue and monitor corporate cards with ease.

Key features:

  • Real-time expense tracking and reporting.
  • Automated categorization of transactions.
  • Spending limits and policy compliance controls.
  • Corporate credit card issuance and management.

Who it’s for:

  • CFOs and finance teams managing employee spending across various departments.
  • Companies looking to control and monitor corporate expenses in real-time.

Business impact:

  • Reduces unauthorized or over-budget spending through real-time controls.
  • Speeds up expense reconciliation by automating categorization.
  • Increases transparency by offering detailed, up-to-date expense tracking.

Example: A SaaS company uses corporate card management software to issue cards with preset limits to employees, ensuring spending stays within budget while eliminating manual expense reports.

Examples of tools: Brex, Ramp, Corporate Spending Optimizer (CSO), Divvy, American Express Corporate Cards.

5. Travel and Expense Management Software

This integrates travel booking, expense tracking, and policy compliance to streamline corporate travel and associated expenses. It ensures employees travel efficiently while staying within company budgets.

Key features:

  • Centralized travel booking and itinerary management.
  • Automated expense reporting for travel-related costs.
  • Policy compliance checks during booking and expense submission.
  • Real-time reporting on travel expenses.

Who it’s for:

  • Businesses with frequent corporate travel, including sales teams and consultants.
  • HR and finance teams aiming to streamline travel-related approvals and expense tracking.

Business impact:

  • Saves time by combining travel booking and expense management into one tool.
  • Prevents policy violations by flagging non-compliant bookings.
  • Improves travel cost visibility and reduces overspending on trips.

Example: A consultancy firm uses travel and expense software to book travel for its employees, ensuring adherence to policies while automating expense claims, saving hours of administrative work.

Examples of tools: TripActions, Concur Travel, Workday Travel and Expense, Chrome River, SAP Integrated Business Planning.

6. Accounts Payable Automation Software

Software that automates vendor invoice processing and payments, reducing manual effort and errors while optimizing accounts payable workflows with AI-driven insights.

Key features:

  • Automated invoice processing and approval workflows.
  • Electronic payment methods and reconciliation.
  • Financial reporting with predictive analytics.
  • Integration with existing accounting systems.

Who it’s for:

  • Finance teams managing high invoice volumes and manual accounts payable processes.
  • Businesses looking to improve payment efficiency and maintain strong vendor relationships.

Business impact:

  • Reduces invoice processing time, ensuring timely vendor payments.
  • Minimises errors in payment reconciliation and financial reporting.
  • Improves vendor satisfaction with quicker, more reliable payments.

Example: A manufacturing company automates its accounts payable process for 1,000 monthly invoices, cutting processing time by 70% and avoiding late fees.

Examples of tools: Beanworks, AvidXchange, Plate IQ, Bill.com, Docusign Insight.

7. Strategic Spend Analytics Software

This category of tools provides deep insights into organizational spending through advanced analytics, helping businesses identify cost-saving opportunities and optimize financial strategies.

Key features:

  • Comprehensive spend visibility and dashboards.
  • Predictive analytics for future spending trends.
  • Cost optimization recommendations based on data insights.
  • Detailed financial reporting for decision-making.

Who it’s for:

  • CFOs and strategic planners seeking to align spending with business goals.
  • Companies aiming to make data-driven financial decisions.

Business impact:

  • Uncovers hidden cost-saving opportunities through detailed spend analysis.
  • Improves financial planning and forecasting with predictive analytics.
  • Enhances transparency by providing real-time visibility into spending patterns.

Example: A large enterprise uses strategic spend analytics to consolidate supplier contracts and reduce costs by 15% annually.

Examples of tools: SpendHQ, Tableau, Power BI, Spend Matters, Rosslyn Analytics.

How to choose the right BSM software for your business

So now you understand the types of BSM software that are available and what they can do. 

But how do you choose the one that’s right for your business? 

It’s not just about the features – you need to think about your unique needs, priorities, and long-term goals. 

Here are easy actionable steps you can take to help you make the best choice.    

1. Assess your business needs

List your biggest challenges. 

Ask yourself: Are we struggling with travel expenses, manual invoice processing, or tracking employee spending?

By clearly identifying your specific pain points you can choose a software that helps with business spend management and directly addresses these issues.

You then want to define your business’s size and complexity. For example, if you’re a…

  • Small startup: You might look for spend management software for small businesses, ensuring simple, user-friendly features suited to your size, as well as flexibility and ease of use.
  • Midsized company: You might prioritize detailed analytics and advanced controls.

Write down these challenges and use them as a reference point throughout the process.

2. Set your priorities

Next, you want to identify the features that matter most to your business. Examples include:

  • Realtime reporting.
  • Automated workflows.
  • Policy compliance.

Rank these features in order of importance. You want to focus on what’s essential rather than optional extras.

The best business spend management software should not only address your current issues but also support your future growth and strategic objectives.

And don’t forget to define your budget. Determine how much you’re willing to invest, and avoid tools with features you don’t need.

3. Evaluate compatibility

Check how the software integrates with your existing systems, such as:

  • Accounting platforms.
  • HR systems.
  • Reporting tools.

You want to test usability. 

Ask yourself – will my team find this easy to use? If the learning curve is too steep, adoption may be a struggle.

4. Think about scalability

Consider these questions:

  • Will this software grow with my business?
  • Does it have features for future needs, such as global capabilities or advanced reporting?

If your business plans to scale, prioritize tools that adapt over time rather than ones limited by current needs.

5. Request demos or trials

Schedule a demo or trial period for your shortlisted options.

Use this time to:

  • Explore the setup process.
  • Test user experience.
  • Assess customer support responsiveness.

Prepare questions for the demo, such as:

  • “How will this save my team time?”
  • “What reporting features are included?”
  • “Can it handle our projected growth?”

6. Make your decision

It’s now time to review your findings and revisit your priorities list.

Choose the software that aligns most closely with your needs, budget, and future goals.

Takeaways

Choosing the right business spend management (BSM) software can save your business thousands, but it requires a thoughtful approach. Here are the key takeaways to guide your decision:

  1. Inefficiency costs you 10% of your budget. Businesses lose significant money due to poor spend management—selecting the right software is not optional; it’s essential.
  2. Identify your pain points first. Whether it’s tracking travel expenses or managing supplier contracts, knowing your biggest challenges ensures you choose a solution tailored to your needs.
  3. Features must align with your priorities. Focus on tools that deliver essential capabilities like real-time reporting, automated workflows, and policy compliance—skip the bells and whistles.
  4. Integration is non-negotiable. Compatibility with existing systems like accounting or HR software ensures seamless adoption and eliminates silos.
  5. Scalability trumps short-term fixes. Choose software that grows with your business, addressing future needs like global operations or advanced analytics.
  6. Demos reveal the truth. Hands-on trials expose usability, support responsiveness, and whether a tool truly delivers on its promises.

The search for the perfect BSM software doesn’t have to feel like finding a needle in a haystack. By clarifying your priorities, testing options, and keeping scalability in mind, you can make a confident choice—one that transforms spend management from a headache into a strategic advantage.

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