Across both developed and developing markets, expense management consumes significant resource and time of the firm’s accounting team. In most of the companies in developing markets, cash is still used as a primary mode of expense payment. This becomes a challenge for employers as they have lesser control over employee spending. Fintech start-ups offering mobile-enabled and cloud-based reporting platforms that capture expenses automatically to the backend of the company’s accounting system are set to revolutionize expense management in near future.
According to PayNXT360, prepaid card driven expense management platforms are driving growth of business and administrative expense management category. This segment is expected to grow at over 30-35% with adoption surging for both SMB and enterprise businesses. Especially, for small and medium businesses such platforms are expected to transform expense management and add maximum value both in terms of cost reduction and improvement of business process efficiency. In the enterprise business segment, we expect adoption to be relatively slower than SMB segment due to in-flexible systems in place.
Pleo, a Denmark based fintech startup is joining the league of companies such as Xpenditure and Expensify that are automating expense reports. Pleo offers a prepaid virtual card (MasterCard) for online purchases and physical card for in-store purchases, along with a mobile and web-based app. Pleo integrates with most of the leading accounting platforms and transforms all the paper work into an organized stream of digital requests. The platform’s algorithm monitors incoming receipts and categorizes them to the respective transaction category automatically. For instance, if the employee makes a purchase at a coffee shop, Pleo sends push notification on the app. When the employee captures the receipt on the app, Pleo automatically categorizes the bill amount towards a pre-assigned label in the company’s accounting system.
Businesses with decentralized spending patterns are benefitting from the automated expense reports generated by Pleo’s platform by monitoring all the expenses in real-time and even receive notifications on the mobile app when a specific transaction occurs. For the beta trial, Pleo is targeting businesses with less than 100 employees in Denmark and the UK. Based on the success of the beta phase, Pleo plans to offer the platform on a fixed monthly subscription basis.