What features to look for in a digital spend management software

Before you choose a tool for your company, know what the essentials are. According to the 2024 Gartner report, around 68% of companies regret purchasing software, often due to the tool’s unnecessary complexity. This is why it is so important to get a tool that won’t make you regret spending money on it and will bring value to the company.

Here we will talk about what general features you can find in popular spend management software, how to select a tool that will last you long, and we will give you an additional list of features that you may want to consider to look for.

What is spend management software?

Spend management software is a tool that helps businesses track, control, and optimize all their non-payroll expenses. When you integrate an expense management tool into your processes, you can manage expenses across different departments, which often include purchasing office supplies, tracking travel expenses, and working with vendor payments.

Many modern spend management systems have the following components:

• Expense tracking and reporting;
• Purchase approval workflows;
• Vendor management;
• Contract management;
• Budget monitoring;
• Payment processing;
• Invoice capture and storage;
• Financial analytics and reporting.

What are the benefits of using spend management software?

If you’re still thinking of whether you need a spend management platform, you should consider what benefits it can bring to your company. Here are some of the benefits you can expect from these tools.

Cost savings

There are many ways that spend management software can save you money. It includes:

• No duplicate purchases and subscriptions;
• Better vendor contracts based on spend data;
• Less maverick spending (purchases outside approved channels);
• Less expense policy violations before they happen;
• Better at identifying and eliminating wasteful spending patterns.

Improved workflow

Manual expense management processes drain productive time from your finance team. Spend management software reduces paperwork and streamlines workflows. Here are some examples of such changes:

• Automated receipt capture and categorization;
• Digital approval workflows that reduce back-and-forth emails;
• Integration with accounting systems to prevent duplicate data;
• Real-time expense submission rather than monthly batching;
• Mobile access for on-the-go expense management.

Better compliance

Non-compliance with internal policies and external regulations can be costly and risky. Spend management software helps by:

• Implementing spending limits and approval requirements automatically;
• Creating audit trails for every transaction;
• Flagging unusual or out-of-policy spending in real time;
• Storing documentation securely for tax and audit purposes;
• Standardizing expense categorization for accurate reporting.

Better decision-making

Perhaps the most valuable benefit is the visibility and intelligence that good spend management provides:

• Comprehensive spending dashboards show patterns across departments;
• Data-driven insights reveal opportunities for consolidation or negotiation;
• Budget forecasting based on actual spending trends;
• Category-specific analytics to identify outliers and optimization opportunities;
• Benchmarking capabilities to compare performance against industry standards.

Essential features of spend management tools

When you are on the way to find your perfect spend management software, check out these nine core features since they separate truly effective solutions from those that will leave you with buyer’s remorse. So, what are these features and why do they matter? Let’s explore.

1. Real-time spend visibility

In 2024, 36% of finance professionals report being “extremely” or “very” concerned about their organization’s corporate spending. Without real-time visibility, you’re literally blind about your expenses.

What to look for:

• Centralized dashboard showing all spending categories;
• Up-to-the-minute transaction tracking;
• Customizable views by department, project, or vendor;
• Card-level transaction monitoring;
• Budget vs. actual tracking in real time.

Tools like Spendbase and Brex show transactions the moment they happen, not days later when accounting reconciles them.

2. Automated expense reporting

Manual expense reporting is the leading source of inefficiency in finance departments. A 2024 survey found that 56% of companies waste up to 10 hours weekly on manual tasks.

What to look for:

• Automatic invoice capture from email and mobile;
• OCR technology that extracts data from receipts;
• Automatic categorization of expenses;
• Digital storage compliant with tax requirements;
• Bulk processing for recurring expenses.

Expensify’s SmartScan technology reads receipts and automatically creates expense entries with remarkable accuracy.

3. Integration capabilities

Each separate tool creates its own little environment with isolated data. The ability to share data between different tools has never been so important as today. What’s interesting is that over the next five years, 50% of companies plan to consolidate their multiple SaaS applications for better management.

What to look for:

• Native integrations with your accounting software (QuickBooks, Xero, NetSuite);
• ERP system compatibility;
• API access for custom connections;
• HR and payroll system integration;
• Banking and credit card connections.

Spendbase offers integration with popular accounting platforms like QuickBooks, Xero, and NetSuite. You can synchronize transactions, categories, and vendor data without manual export/import processes.

4. Mobile accessibility

Business happens everywhere, and mobile access is no longer optional. This is why always look for apps that either have a mobile app or have a mobile-friendly web platform.

What to look for:

• Full-featured user-friendly mobile apps (not just mobile websites);
• Offline functionality for receipt capture;
• Push notifications for approvals;
• Mobile card management;
• Location-based expense tracking.

SAP Concur’s mobile app allows users to photograph receipts, submit expenses, and approve requests from anywhere.

5. Policy compliance and controls

Nearly half (49%) of senior decision-makers identify purchases outside approved processes as a significant concern. It is especially bad if the company works with very sensitive user data.

What to look for:

• Customizable spending policies;
• Automatic flagging of policy violations;
• Category-specific spending limits;
• Per-user or per-role permissions;
• Digital receipt enforcement.

Airbase allows you to set controls by department, individual, expense category, and even time of day.

6. Approval workflows

Good workflows help to reduce bottlenecks while also maintaining proper oversight. Companies that take smart action on software purchases are the least likely to experience buyer’s regret, and the same applies to expense approvals.

What to look for:

• Multi-level approval hierarchies;
• Delegation options for when approvers are unavailable;
• Conditional approval routing based on amount or category;
• Bulk approval capabilities;
• Mobile approval notifications.

Divvy allows configurable approval chains that can route expenses differently based on amount, department, or expense type. Spendbase helps you step up approval steps that are based on how much money spent. For example, small purchases can be handled normally, while the bigger ones automatically get sent to higher-up managers for approval.

7. Advanced analytics and reporting

Advanced analytics matters. Top-performing organizations achieve a 5.8% cost reduction in total spend thanks to the up-to-date data they receive from spend management tools.

What to look for:

• Customizable report templates;
• Spend trend analysis;
• Department and category benchmarking;
• Export capabilities (CSV, PDF, Excel).

Spendbase’s analytical suite includes custom report builders and spending trend visualization. Additionally, now you can bulk-upload transactions in CSV format. Coupa’s reporting suite includes AI that simplifies cost-savings identification.

8. Vendor management

Consolidated vendor data helps negotiate better terms and prevent duplicate vendors. It is especially important for small businesses as they can save approximately 30% on operational costs through proper software automation.

What to look for:

• Centralized vendor database;
• Contract storage and renewal alerts;
• Vendor performance tracking;
• Preferred vendor flagging;
• Tax document management (W-9, 1099).

Procurify maintains vendor profiles with performance history, which means you can easily find your best suppliers by this recorded data.

9. Security and compliance

Financial data is among your most sensitive information. Investment in cybersecurity software is expected to grow by US$23 billion by 2026 and it also means better security in terms of spend management.

What to look for:

• SOC 1 and SOC 2 compliance;
• GDPR compliance (for global operations);
• Role-based access controls;
• Two-factor authentication;
• Encryption at rest and in transit;
• Regular security audits.

Platforms like Expensify use bank-level security with AES-256 encryption, OAuth 2.0 authentication protocols, and AWS infrastructure with redundant data centers.

How to select the right spend management tool for your business?

After understanding the essential features, your next challenge is finding the perfect spend management solution for your specific business spend needs. Since 60% of software buyers regret their purchases within 18 months, you should actually take a thoughtful approach to selection is crucial. Here’s how to make a choice you won’t regret.

Assessing your needs

Start with a comprehensive assessment of your current spending processes and pain points. Here you can identify your spending categories, list current tools used for expense management, and calculate how much you spend monthly.

You should also measure existing challenges: time spent on manual processes, error rate in reporting, and difficulties with reporting.

! Actionable tip. Create a prioritized feature checklist based on your assessment. Distinguish between “must-have” and “nice-to-have” features to avoid paying for unnecessary complexity.

Scalability

Your spend management solution should grow with your business. You should consider user count expansion over the next 2-3 years, any possible new departments or business units, and possible transaction volume increases.

Some of the pricing structures can be unpredictable:

• Per-user pricing may become expensive as you grow;
• Per-transaction fees can be unpredictable;
• Tiered pricing models often offer the best value;
• Watch for hidden costs (implementation, training, support).

! Actionable tip. Ask vendors for client examples similar to your projected size in 2-3 years. How has their platform scaled for these customers? What challenges did they face?

User experience

Even the most feature-rich tool will fail if your team won’t use it. Check out if the right expense management software has these elements:

• Intuitive interface requiring minimal training;
• Mobile app quality (check App Store/Google Play ratings);
• Clear error messages and help documentation;
• Accessibility features.

! Actionable tip: During your trial period, involve actual end-users from different departments. Their feedback will help you find deal-breaking usability issues that finance leaders might miss.

Vendor support

The relationship with your vendor is as important as the software itself. Check if the software has a dedicated implementation manager, data migration assistance, and customization capabilities.

! Actionable tip. Ask for references from customers who have been using the platform for at least a year. Their experience with support and ongoing value will be more revealing than new customer testimonials.

Bonus features worth paying for (Depending on your needs)

The essential features are a perfect set of any good spend management solution, but what about some premium features available? What can they do, and whether you actually need them? Consider these advanced features if they align with your particular challenges.

• Virtual card management. Create instant digital cards with custom spending limits and merchant restrictions. This feature reduces fraud risk and also gives employees purchasing flexibility.
• Intelligent receipt matching. Some tools offer AI-powered technology that automatically pairs receipts with transactions. It is an ideal option for companies that have to process hundreds of receipts monthly.
• International payment capabilities. This one is perfect for those companies that are not working just locally. For this, check out a unified system that can handle multiple currencies, exchange rates, and country-specific payment requirements.

How spend management features help with common challenges

Companies of all sizes face similar financial pain points, but modern spend management software solutions offer targeted features to address these challenges. Here’s how specific features solve your most pressing problems:

• Unclear view of company spending. To solve that, create comprehensive dashboards that provide instant visibility across all spending categories. It will let you spot trends and address overspending immediately.
• Time wasted on manual tracking. Use automated expense capture with OCR technology that can extract and categorize information automatically. It can help reduce the monthly close from days to hours.
• Disconnected financial systems. Use integrations with accounting, ERP, and banking systems to eliminate duplicate entries and maintain a single source of financial truth.
• Unmanaged software subscriptions. Try out subscription tracking that shows all recurring payments. You can also try virtual cards with merchant controls that prevent overspending and identify redundant services.
• Compliance and reporting struggles. Implement automated policy enforcement with customizable reporting templates.
• Inaccurate expense forecasting. With predictive tools, you can use historical patterns to project future expenses while real-time budget tracking prevents unexpected overruns.
• Poor control over employee spending. Customizable card permissions set precise spending limits by employee or department. Pre-approval workflows prevent unauthorized purchases.

Spendbase stands out among such tools as it combines all these solutions in a single, intuitive platform that’s easy to implement and quick to adopt. Rather than working with multiple tools or struggling with outdated systems, you can get a solution that covers all these pain points.

Companies that switch to Spendbase typically report saving 15+ hours per week on manual processes and also gain better visibility into their spending. It finally gives finance leaders the control and insights they need to make strategic decisions that impact their whole company.

Takeaway

To sum up, spend management tools are making real changes in the companies that implement them. However, it is also important to know how to select that one ideal tool that will bring value and not waste money and time down the drain. Here’s a little recap of what we have been talking about above.

1. Essential features include real-time visibility, automated reporting, integrations, mobile access, compliance controls, approval workflows, analytics, vendor management, and security.
2. Key benefits are cost savings, improved workflows through automation, better policy compliance, and data-driven insights.
3. Select based on your specific needs. It includes assessing pain points, considering scalability, prioritizing user experience, and evaluating support quality to avoid joining the 68% of companies with software purchase regret.
4. Premium features like virtual cards, intelligent receipt matching, and international payment capabilities may be worth considering for specific requirements.
5. Good spend management tools directly address common challenges like unclear spending visibility, manual inefficiencies, disconnected systems, subscription management, and spending controls.

Digital spend management software is incredibly important if you aim for a more productive and less stressful workflow. With these tools, you can reduce time-consuming manual processes, gain complete visibility into your company’s spending patterns, and make smart financial decisions based on accurate, real-time data rather than outdated reports.