Top 7 Accounts Payable Software for Businesses in the UAE (With Checklist)
Processing bills is the most difficult part of procurement.
Bill payments are often mistakenly duplicated, goods aren’t received as per purchase orders, or there are delays in the approval workflow.
An automation tool makes the process hassle-free by automating approvals and payments and giving more visibility and control over your accounts payable (AP). It also enhances reconciliation and improves vendor relationships.
While the core job to be done by an AP manager is to ensure good vendor relationships, manage between timely payments & cash flow, ensure compliance in payments, what you need is a solution that supports your organization’s finances in one place and ends the chaotic back and forth.
What is Accounts Payable Software?
Accounts payable (AP) software is a tool that helps businesses automate invoice and vendor payments via a centralized platform. It brings together all the key information into a single source of truth and enables teams to do the following:
- Tracks bills and their statuses to avoid double payments
- Enables two-way and three-way goods received note (GRN) & PO matching
- Supports customizable approval workflows for complete visibility
- Supports local and international payments via various payment methods
Thus, AP software simplifies the payment processes and reduces unnecessary friction between finance, procurement & other teams.
What are the Benefits of Accounts Payable Software?
Adopting AP software helps you in the following ways:
- Gives real-time visibility into the status of invoices and payments
- Provides insights into spending patterns, vendor performance, etc.
- Streamlines payment and approval workflows, leading to smoother payment processes and vendor relationships
Top 7 Accounts Payable Software in the UAE
Here are the top 7 AP platforms for businesses in the UAE.
Based on your company size and needs, you can pick one of these to support your accounts payable.
Pluto is an accounts payable software that transforms your AP processes by simplifying bill processing. From enabling GRN matching to setting fully customizable multi-layer approval workflows, it is the best accounts payable solution to manage your vendor payments and relationships.
- Facilitates three-way GRN matching with purchase orders and item-based matching
- Consolidates approved invoices in a single window to highlight pending bills and avoid delays
- Offers a flexible approval engine capable of managing intricate hierarchies without requiring technical expertise
- Enables multi-layer invoice approvals with policies to align with your company's structure
- Ability to upload invoices easily via WhatsApp images and emails directly to speed up the receipt capture process
- A centralized dashboard to gather bills in one place and track the status to avoid double payments
- Vendor-specific corporate cards to control budgets and detect irrelevant expenses
- Enables creation of a preferred vendors list for quick payments
- Supports local and international wire transfers to make payments
- OCR technology minimizes manual data entry by creating and populating bills from invoices
- Supports ERP integration to synchronize your vendors, POs, and bills and integrates with accounting software such as Oracle, NetSuite, Zoho, Quickbooks, Wafeq, Xero, etc.
- Raises alerts for upcoming payments, enables scheduling payments in advance and automates invoices
- Provides a complete audit trail of the process to ensure visibility at each step
- Shows real-time analytics to facilitate deep insights for supporting budget control
- Enables branch- and subsidiary-level spend tracking (not offered by other platforms)
- Offers up to 2% cashback on all non-AED transactions
- Independent PCI DSS Level 1 certification
- SSO/SAML Capabilities for Enterprises
- Integrates with Netsuite, Microsoft Dynamics
- Better Forex rates than most local banks
- Multiple integration options
- Integrates with all other major ERPs except Tally
- Slightly longer on-boarding due to corporate card offering
Tipalti is an automation tool that supports end-to-end AP processes. It helps you streamline accounts payables and make global payments in local currencies for various recipients, from suppliers to freelancers. The cloud-based platform helps finance teams manage payments without losing visibility and control.
- Supports supplier onboarding and vetting to ensure supplier reliability and trustworthiness
- Integrates with ERP and accounting systems to help with reconciliation reporting
- Uses OCR to scan, capture, match, and process invoice data to reduce manual errors
- Provides built-in approval workflows and payment scheduling
- Offers invoice processing, including two-way and three-way PO matching and approval to avoid overpayments
- Assists AP processes for subsidiaries and entities
Starts at $129 per month per user for the platform fee and charges for additional features separately.
- Can manage supplier bank account details in a secure environment
- Cannot use it for prepayment invoices on inventory purchases with the ERP system
- High foreign currency exchange fees
- Tax forms can be difficult to fill out and very difficult if you do not speak English
Airbase is an automation solution for managing global AP processes. It focuses on ensuring compliance and syncing with your accounting tool to streamline the payment process.
- Offers OCR to populate details, including general ledger (GL) category, date, amount, and purpose
- Supports onboarding with a self-service vendor portal and custom questionnaires
- Has a centralized dashboard with all key information about the invoice to avoid friction
- Accepts invoices from email or vendor portal across all subsidiaries
- Offers automated approval workflows based on multiple parameters, such as vendor, amount, GL category, etc.
- Enables three-way invoice matching to ensure compliance and reduce wasted spend
- Facilitates payments and approvals, including multi-subsidiary support, international currency, and real-time GL sync
- Real-time audit trail with receipts, notes, and documentation for transparency
Pricing: Request a custom quote.
- Intuitive and easy to use; no training or previous knowledge required
- Seamless approval workflows
- The mobile app is slow and takes time to load pages
- SSO-based login is not smooth
- Not suitable for complex branch-level approvals and expenses
Ramp is an accounts payable solution designed to manage payments and business expenses. It automates bill entries, approvals, and payments while offering complete visibility and control. By tracking each AP step from data recording to approvals, it simplifies payment processing and takes the burden off teams.
- Uses AI to automatically extract key details from invoices to offer accuracy and eliminate data-entry errors
- Identifies duplicate invoices and helps with two-way matching to purchase orders
- Offers custom approval workflows to minimize errors and ensure timely payments
- Provides a unified dashboard with visibility into the status of invoices
- Consolidates multiple payment options, such as check, card, same-day ACH, or international wire
- Integrates with accounting solutions, such as QuickBooks, Xero, Oracle NetSuite, Sage, etc. for auto-sync bill pay transactions
- Supports international payment processing in multiple currencies
- Tracks vendor data and transactions for easy reporting and data-driven decisions
Three pricing packages—free or basic features, $15 per user per month for Ramp Plus, and custom quote for enterprises with features like enterprise ERP integration, custom implementation, and local card issuance.
- Works with multiple subsidiaries
- Offers cash back on credit card purchases made using VISA cards
- Can’t unmatch an incorrectly matched invoice (invoice to credit card)
- Approval routing can only be set on the vendor level, not department level
- Limitations in syncing repayments
Bill is a spend management solution for SMBs to control payables, receivables, expenses, and all corporate expenses. It allows businesses to streamline scattered AP processes into a single platform and gain more control over their finances.
- Enables tailored approval processes to facilitate approvals with minimal hassle
- Streamlines purchase order workflows with the option for automated two-way and three-way matching
- Simplifies expense reconciliation through quick coding and integration with accounting systems
- Automates receipt matching, categorization, and expense reporting, decreasing administrative tasks
- Syncs with all major accounting systems like QuickBooks, Sage, Intacct, and NetSuite
- OCR auto-populates invoices for data entry
- Provides bulk payments of approved invoices with payment choices, such as ACH, credit cards, checks, and international wire transfers
- Offers audit trail of any changes or actions related to the invoice on a single page
Pricing: Provides a free trial and essentials pack starting at $45 for six standard user roles. Its team and corporate pack are for $55 and $79, respectively. Enterprises need to request a custom quote.
- One-click swift payments
- Minimum training required
- Easy-to-use mobile app
- Customer support is difficult to initiate, slow, and unresponsive
- Frequent changes in the interface create confusion for users
- Limited customization options for reporting
Melio is a bill payment tool that enables businesses to pay via bank transfer and debit cards. Even when the vendor accepts only checks, it pays checks on your behalf to facilitate bill processing. It processes payments and issues checks without the payee having to use the platform. It is a tool suitable for small businesses to process payments without hassle.
- Enables payments via credit card even when the vendor doesn’t accept the card to support deferred payments
- Allows inviting additional users (such as accountants) to set up roles and permissions and manage approvals easily
- Supports two-way sync with QuickBooks and Xero
- Facilitates bulk payments and split payments (splitting bills into multiple payments)
- Offers international payments across the border
- Raises duplicate payment alerts to assist in fraud detection
Free to process ACH payments to vendors; charges a fee for other payment modes (check Melio pricing)
- Offers a free-to-use payment module (only with QuickBook)
- Lack of integration with accounting software
- Turnaround time on a check is three business days
- Support is very limited
- Limits payments to two checks per month
Spendesk automates the AP process by bringing together purchase orders and invoices to facilitate budgets, payments, and approvals. It creates a single source of truth to cut hours of manual work and detect errors better. It is a cloud-based software that improves budget control and financial reporting.
- Offers a centralized platform for tracking payments right from the purchase order stage
- Supports invoice capture via email and image/file upload
- Uses OCR to extract key information from the invoice, such as supplier name, amount, dates, and purchase details
- Enables budget changes in real time without a manual data-entry system
- Allows scheduling of payments and matching of purchase orders with the invoice for effective GRN matching
- Provides customizable and built-in approval workflows and controls to monitor spending
- Raises alerts for duplicate invoices to enable teams to avoid overpayments and defect frauds
- Super convenient for ad-hoc expenses
- Intuitive and interactive interface
- Easy manual upload in case OCR doesn’t support receipt capture
- Glitchy virtual card payments with delayed notifications and declined transactions
- OCR-based receipt capture only works for emails
- Basic features like memorizing accounting patterns for vendors are only available in the paid module
How to Choose a Good Accounts Payable Software
Image Prompt: Create a checklist
Ease of Use
The AP software must be flexible to accommodate complex hierarchies without making it difficult to follow the workflows. It should offer trigger-based workflows and a clean user interface. Your team shouldn’t struggle to learn how to use the product and rely on the support team to get basic invoices cleared.
Multiple Payment Options
From local transactions to international wire transfers and other digital payment options, AP software must support multiple payment options. It becomes easier with vendor-specific cards that make payments safe and fast. Pluto helps you set up vendor-specific cards, even for public relations officers. This is something most platforms on the market do not support.
Accurate Data Capture
AP software with OCR capabilities makes invoice processing faster and reduces errors. The ability to process invoices from different platforms and sources, such as emails, Slack, and WhatsApp, is required. Moreover, moving these captured invoices into the centralized database and syncing with accounting software eliminates the manual data entry task.
Approval workflows are key for timely and accurate payments. An AP software must have a simple no-code workflow builder, even for complex hierarchies. This is especially useful for large organizations where this process can be intricate and long.
Vendor payments need to be recorded across accounting systems for effective reconciliation. The AP software must integrate with your accounting systems and platforms to automate data entry and facilitate a synchronized record-keeping system.
The AP software should offer a dedicated dashboard with all the key information such as vendor, invoice number, status, description, etc. Also, it must give a separate centralized view for expense tracking. This gives you visibility into where you spend the most and helps you optimize resource allocation.
Supports GRN Matching
The AP software interface must be designed in such a way that it supports GRN matching, both two-way and three-way matching. Be it in the form of OCR invoice capture or offering item-based matching capabilities. This will avoid any under- or over-payments and support a healthy vendor relationship. Also, this eliminates complications in the reconciliation process.
Reporting capabilities of AP software help to identify the spending patterns and other key insights related to department-specific expenses, budgeting, etc. Hence, AP software must provide a dedicated reporting dashboard with the option to export the reports for enhanced analytics and reporting.
Transforming Accounts Payable with the Right Software
Accounts payable is not just about clearing bills and vendor payments. It is the basis for vendor relationship management and proper order in financial processes. From getting approvals to matching GRN, you need software that offers ease of use with the right blend of functionality.
Too complex of a product will leave your employees confused, leading to double work. Lack of customization will have teams work harder to adopt the product. Limited integration will have the accounting department working twice as much on data entry and syncing.
Make the right decision and choose software that gives you control, customization, security and speed, all while embracing automation capabilities.
Book a demo and discover how a simple automation tool transforms your AP process.
Disclaimer: The comparisons and rankings of accounts payable software competitors in this article are based primarily on reviews found online. While we strive to provide accurate and up-to-date information, these reviews are subjective and reflect the opinions of the users who posted them. The information presented is intended for general informational purposes and should not be considered as a definitive guide for choosing a software provider. We encourage readers to conduct their own research and consider their specific needs before making a decision.
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Corporate vs. Business Credit Card: What is the Difference?
Corporate credit card vs. a business credit card. You might have heard both terms used interchangeably, but what's the difference?
Primarily, corporate cards are issued to large businesses with many employees, while business credit cards are designed for smaller businesses. Corporate cards generally have higher spending limits and may offer more perks than business cards due to their volume.
This post will cover the main differences so you can decide which card is best for your business.
What is a Business Credit Card?
A business credit card is a commercial payment solution for companies and businesses. Similar to a personal credit card, business credit cards are used when business-related purchases are made on credit provided by one of the credit card companies.
Banks in the UAE and MENA offer various business credit cards for small, medium, and large companies.
Business credit cards usually offer higher credit limits than personal credit cards and may come with exclusive privileges, such as free travel insurance, concierge services, and air miles.
In the case of small businesses, a personal credit score will play an important role in credit limit approval.
What is a Corporate Credit Card?
A corporate credit card is issued to company employees to help with business expenses. The company will be liable for any debts incurred on the card.
It is important to note that corporate cards are not personal credit cards and should only be used for business purposes.
Financial institutions expect you to spend more with a corporate card than a business card, as the companies that require those cards are usually bigger. Therefore, the company must have a good credit score to qualify. This can come with various perks, such as lower interest rates, extended grace periods, and, most importantly - higher spending limits.
At the same time, there can be some drawbacks, such as:
- Long approval periods due to the nature of the financial product.
- Limited online features for your cards and company spend management.
What is a Pluto Card?
Pluto Card is MENA's corporate card that helps finance teams take control of their company's expenses while saving their business time & money. While Pluto can't give you a line of credit, you will be able to instantly issue as many business and corporate cards as you need while getting a complete overview of your business's spend management on one dashboard.
Virtual credit cards
Virtual cards are corporate credit card numbers used for online business-related purchases and contactless payments.
Although there is no physical card, virtual credit cards are great as they are flexible, convenient, and controllable.
With virtual credit cards, you can:
- Issue unlimited virtual credit cards/employee cards;
- Create a virtual credit card within seconds;
- Set employee spending limits to avoid going over budget;
- Generate a one-time use purchase card that deactivates as soon as it is used;
- Set purchases to be made with specific vendors so the card can't be used for other purchases;
Chances are that if you need a virtual credit card at your existing bank, it might take quite some time, and the reporting and limit setting options might not be very user-friendly.
While Pluto cannot provide you with credit cards, we can issue as many virtual cards as you need with just a few clicks:
Physical credit cards
Physical corporate credit cards serve the same purpose as virtual and business credit cards, making payments. Unlike virtual cards, physical corporate credit cards can be used in person to make purchases.
While both virtual and physical credit cards are comparable, the main differences are:
- Physical corporate credit cards may take up to 3 business days to be delivered.
- Virtual cards cannot be used physically.
- Virtual cards are safer for the user, as they cannot be lost or stolen.
Benefits and perks
The benefits and perks differ for business and corporate credit cards and Pluto cards.
Business & corporate credit cards:
- Receive Business reward points for purchases made that can be redeemed for future purchases.
- Gain access to over $35,000 in perks and rewards programs
Why are Business Credit Cards and Corporate Credit Cards Different?
Now you know the main difference between business and corporate cards, but let's investigate some of them in more detail.
Expense management tools
Business credit cards are frequently limited to your online banking platform. In the case of corporate credit cards, you may get something slightly better - an enterprise solution.
But from what we have seen, the speed of card issuing or limit changes is usually lacking.
Pluto doesn't give you a credit line, but here is a list of things that Pluto's expense management platform does:
- Unlimited corporate cards (within seconds);
- Set spending limits on corporate cards to avoid going over budget or being overcharged;
- Issue one-time purchase cards that deactivate after being used;
- Real-time transactional data - know what (and where) is being spent in real-time;
- Ability to oversee company financials and receive instantaneous expense reports;
- Automated accounting;
- Sync transactional data to major accounting platforms;
- Simple and quick reimbursements;
- Digitized receipt reconciliation;
- Close books in hours, not days.
Corporate and business card fees
The fees that you might have to pay on corporate and business cards fall into two main categories:
For business and corporate credit cards, annual fees may differ depending on the bank or credit card issuer you choose to move forward with. Typically, the UAE's yearly fees range from 0-800 AED, with 'free for life' being the most popular.
If there are any fees, you can typically waive them by spending a certain amount per year.
Pluto cards do not have any annual fees and are entirely free; however, if you're a large corporation that wants unlimited users, custom ERP integrations, or a dedicated account manager, there will be a monthly subscription fee.
Business and corporate credit cards tend to incur FX fees, making it expensive for a company owner, a small business, or a large business to do any transactions outside their domestic currency.
FX fees can be high, and credit card issuers are usually not transparent with the fees that come with them. Typically, fees come in the form of an FX spread and are hidden inside your payment, meaning you might be paying 2-6% for a transaction in a different currency.
Just imagine how much of your spending is in a different currency and take an optimistic 4% fee from that amount. Now multiply it by five years.
Pluto does not charge FX fees, making it the perfect choice for companies or businesses that frequently transact in foreign currencies.
Application & Approval Process
You must wait around two weeks for a business credit card approval. After the approval process, it may take up to 10 business days to receive your business credit card.
With a corporate credit card, the time may vary, but the chances are that you will need to wait more than 5 business days before you get approved.
From our experience, when you need an expense card - you need it on the spot!
Pluto has adopted a KYB & KYC (know your business and client) process that allows us to onboard customers in minutes. After you set up your account, you can start issuing virtual cards and continue your work without halts or limitations.
Corporate vs. Business Credit Cards Pros and Cons
While a corporate credit card and a business credit card may be comparable in some aspects, there are some differences between the two financial products.
Business credit card pros
- Available for most businesses in their standard banking products;
- Standard application process with low business requirements;
Business credit card cons
- Usually limited in numbers, one card is internally shared amongst many employees. That creates bottlenecks in spending and raises various security risks;
- Non-existent (or very limited) spend management platforms to monitor your reporting;
- No virtual cards;
- High FX fees;
Corporate credit card pros
- Higher spending limits;
- Possibility to issue several cards;
- Safe & secure, as information is not being shared;
Corporate credit card cons
- Longer approval process;
- High FX fees;
While the pros and cons for both types of cards may vary, the final decision will be based on the size of your business.
Why Pick Pluto Card for Business and Corporate Users?
As mentioned, Pluto won't give you a line of credit; instead, Pluto provides you with an all-in-one expense management solution.
Pluto's spend management platform
- All your business expenses are at your reach on Pluto's dashboard;
- Control over all issued cards and their limits;
- Creation of unlimited virtual cards;
- Real-time expense reporting;
Approval workflow on Pluto
Once you have access to Pluto's expense management dashboard, you'll also be able to set up approval flows and automation.
With Pluto's approval workflow, you can:
- Get visibility and control over your expenses;
- Streamline how you manage your spending;
- Automatically direct approvals to the right employees;
- Create approval flows within departments;
Real-time expense reports
With Pluto cards, you'll gain real-time transactional data on company spending while being able to set strict budget limits.
This will also help you make informed decisions about allocating resources and improving your P&L.
Additionally, you can also set up notifications to be sent to your accounting or finance team whenever a transaction is made. This way, they'll always be in the loop and can take appropriate action if needed.
Which Card is Best for My Business?
The final pick of the card will depend on several factors related to your business.
The needs of companies based on their industries may differ. Consulting businesses need a flexible card solution with no FX fees, as their employees travel frequently. Digital agencies need multiple virtual cards to onboard new projects and pay for ad networks daily.
Consider the needs relevant to your industry and decide from there. While Pluto is an excellent pick for all industries (as we have a very versatile product), here are some of the use cases that illustrate the needs and how Pluto solves them:
Annual revenue, the number of employees, and spending volume will also come into play when making your decision.
If it is just you or a couple of employees, you may not need many cards (or you might take advantage of Pluto's virtual cards).
On the other hand, if you have a sales team that needs to pay for lunches with prospects every second day, one card in the business owner's name will be problematic!
How much control do you need over your spending? Classic credit cards (be it business or corporate) usually have just a few features that are extensions of your online banking.
In some cases, that might be enough. If there is one card and one person using it - setting limits and monitoring the spending is not an issue.
Pluto comes into play when you have several holders and many cards, as you can set custom limits on cards. Real-time reports of spending suddenly become very important to increase and decrease limits on the go.
- Business credit card is the best fit for small business owners; they offer a standardized solution.
- Corporate credit cards are for bigger companies, allowing higher spending and slightly better control.
- Pluto cards (used for all business sizes) can provide unlimited virtual cards and give you access to an all-in-one expense management platform.
Does a corporate credit card affect my credit score?
A corporate card is a company's liability and does not affect your credit score, and you will not see them on your personal credit report. Pluto cards do not affect your credit score in any way (as they do not provide loans or credit facilities).
What is the difference between a business and a corporate credit card?
The main difference between small business credit cards is the size of the company that uses them, followed by credit limits and available control features. Pluto provides cards to corporations and businesses through the all-in-one spend management platform.
What is meant by a corporate credit card?
A corporate credit card refers to a card provided by the company to the employee for various business-related expenses.
Is a corporate card the same as a credit card?
Credit cards primarily draw from an approved loan balance, while corporate card programs are just an extension to a dedicated corporate account. But the terms are used interchangeably nowadays.
What is the difference between corporate and domestic credit cards?
A domestic card may refer to a debit card or a card issued by your local bank for your local use. Corporate cards are accepted internationally, at the ATM, or online.
Can a corporate card be used for personal use?
No. By default, corporate cards have to be used for business expenses, which are reported into accounting, but most importantly, it is the company's money on that card. The only exception will be if your company allows it.
What is the advantage of a corporate credit card?
Usually, it comes down to higher spending limiting. Compared to small business credit cards, corporate credit card debt does not usually require a personal guarantee, as the company guarantees it.
In the case of Pluto's corporate card, we can also add - unlimited virtual cards, real-time team-wide spend control, instantaneous reporting, and no FX fees!
Does a corporate credit card affect my credit score?
No. If the corporate credit card has a credit facility attached to it (it usually does), it is a company liability, not a personal liability. You are given access to a portion of their credit facility that does not fall into the personal loans group, and you do not need to provide personal guarantees.
Can my company require me to put business travel on my own credit card?
No, the company cannot force you to put business expenses on your credit card, but it is sometimes easier for everyone. So, if you agree with that, and the company agrees to reimburse you - it is not a problem.
If you are looking for a better solution, let the Pluto team know, and we will provide you with an easy corporate card platform for your whole team.
Do corporate credit cards require a credit check?
A corporate credit card (in its classical meaning) is attached to a loan facility. To approve this loan facility, banks must do a company credit check.
A Guide to Improve Internal Control Over Financial Reporting
Internal control over financial reporting (ICFR) refers to the legal obligation of a company to provide accurate financial statements. It requires you to adopt policies and processes that show the true picture of the company's finances. This involves:
- Avoiding errors, fraud, or omissions
- Meeting deadlines
- Reviewing statements regularly.
An example of ICFR is inventory control, which involves maintaining accurate records of the company's goods. This requires adopting practices such as:
- Maintaining documents, such as receipts, shipments, and adjustments
- Segregating duties to different individuals or teams for handling, recording, and verifying inventory
- Matching physical inventory counts with recorded inventory levels
- Valuing inventory in accordance with generally accepted accounting principles (GAAP) principles, such as FIFO, LIFO, or the weighted average method.
These practices minimize the risk of inventory discrepancies and enhance the accuracy of financial statements.
What is the Purpose of ICFR?
ICFR is mandatory as per the Foreign Corrupt Practices Act (FCPA) of 1977 and the Sarbanes-Oxley Act (SOX) of 2002.
FCPA requires public companies to establish and maintain accounting controls. This reasonably ensures that financial statements comply with GAAP.
SOX takes this a step ahead and mandates public companies to assess the effectiveness of ICFR efforts and share the results with the public. Additionally, it demands large companies to get independent auditors for the evaluation.
Why is Internal Control Over Financial Reporting Important?
ICFR’s purpose is not restricted to being a statutory obligation. Here are five reasons why ICFR should be on your priority list:
Accurate Financial Statements
ICFR ensures accurate financial statements that reflect the company's financial position and performance. Such reports enable investors, creditors, and internal management to make informed decisions.
ICFR emphasizes the use of automation, standardized procedures, and clear documentation. This reduces the risk of errors due to human oversight, saving time and resources.
Preventing Fraud and Misconduct
ICFR employs strategies such as segregation of duties, multiple approvals, and regular audits. This reduces the chances of oversight and ensures employees do not engage in fraudulent activities.
Stakeholders (including investors and creditors) rely on financial reports to assess a company's performance. Effective ICFR policies build confidence in the company's financial reports.
Avoiding Costly Errors
ICFR detects errors and discrepancies before they can escalate into expensive matters. This saves significant expenses and protects its long-term viability. For example, identifying accounting errors eliminates the need for financial restatements.
What are the Components of Internal Control Over Financial Reporting?
There are five main components of internal control over financial reporting. These are defined by the Committee on Sponsoring Organizations (COSO) of the Treadway Commission.
These five components are also known as the COSO framework.
The control environment includes the organization's standards, processes, structures, and values. It comprises:
- Ethical values of the organization
- Organizational structure and authority workflow
- Processes to build a competent team
- Focus on performance measurement, incentives and rewards.
These elements create an environment that fosters internal control in the organization.
Risk assessment is an agile process for identifying and assessing risks. It involves:
- Identification of potential risks that impact the ICFR efforts. This includes both internal and external risks.
- Evaluation of the potential impact of identified risks. Some risks have a higher likelihood and a greater impact than others.
For instance, an internal risk could be employees intentionally inflating their expense reports to receive higher reimbursements. The potential impact will be financial misstatements if the risk goes undetected.
Control activities refer to the plan of action to address the risks identified during risk assessment. This requires establishing specific policies and procedures, such as:
- Segregation of duties to prevent fraud and collusion
- Controls in information security, application development, and system maintenance
- Implementation of entity-level controls, such as reviewing differences between planned budget and expenditure
- Employing preventive control, such as limited access to IT systems and automated approvals
- Using detective control to identify misstatements via reconciliations and management review controls
One such example would be accounts payable automation to eliminate manual data entry. For instance, an OCR-based automation tool will improve receipt retrieval if there are recurring manual errors.
Information and Communication
Information and communication ensure that key stakeholders know their roles and responsibilities. It involves:
- Defining expectations from each stakeholder in the financial reporting process
- Educating employees on ICFR policies, procedures, and compliance requirements
- Providing channels for reporting concerns and issues related to ICFR.
An example would be communicating reimbursement policies to manage company spending. These rules set clear limits and expectations for employees.
Hence, if the policy says entry-level employees can't claim travel expenses, they should not submit such expenses for reimbursement.
Monitoring activities involve regular review of financial controls and processes to identify and rectify issues. It includes the following steps:
- Review expense reports, receipts, and other data to verify the accuracy.
- Test sample data to ensure that controls are operating as intended.
- Detect unusual patterns or anomalies in the data.
- Verify that employees are following established policies and procedures.
One such example would be reviewing travel expense reports as a part of expense management. It involves verifying receipts and approval compliance. Any detected exceptions trigger investigations and corrective actions.
A Better Way to Manage Internal Control Over Financial Reporting
Setting effective policies for ICFR requires financial data visibility and proper reconciliation processes. Hence, achieving this demands more than policies and procedures.
You need software to support operational efficiency transformation. Here is how Pluto offers a helping hand to get better control over your ICFR efforts:
Seamless Financial Reporting
Pluto generates detailed financial reports, providing more accurate and effective financial reporting. You can automate the process of data entry with OCR-based receipt capture. This reduces the manual errors and ensures accuracy.
A multi-layer approval workflow ensures that financial transactions are reviewed and authorized on time. This helps you comply with company policies, enhancing control and accuracy.
The seamless integration with accounting software provides real-time data sync. This keeps the data up-to-date, enabling faster report generation.
Simplify Financial Audit
Pluto centralizes financial data, enhancing auditing capabilities.
Document management becomes simple with the easy uploading and retrieving of financial records. You can bulk download all audit logs and supporting files in a single click. This eliminates the time-consuming task of searching for and gathering individual paperwork.
Pluto's automated systems keep expense records for all financial transactions. As a result, auditors can trace every step of the transaction, ensuring transparency and accuracy.
With end-to-end encryption, Pluto meets bank-grade security standards to safeguard sensitive financial information. This ensures the safety and easy accessibility of financial data.
Accounts Payable Automations
Pluto automates the accounts payable (AP) process to simplify procurement and payments. From purchase request (PR) to goods received notes (GRN) matching, you can streamline the entire AP process.
Multi-layer approval workflows accelerate purchase requests and approvals. The purchase order (PO) process becomes faster with custom workflows and ERP integration.
Pluto automates the entire invoice management process. OCR technology makes it easy to capture and auto-fill invoice details, ensuring accuracy and speed.
Pluto's cash flow management features provide alerts for upcoming payments. This enables you to schedule payments and avoid penalties.
Pluto enables budget control by facilitating spending limits and approval workflows.
Not only can you decide the limit for corporate cards, but also reject an expense if it goes against company policies. In contrast, you can also approve the spending limit for legitimate expenses.
This ensures that employees adhere to predefined budgets. Moreover, this gives your finance teams immediate visibility into spending against budgeted amounts.
Pluto's ERP integration streamlines vendor management and fosters an efficient control environment.
It imports vendor lists from your ERP and exports them back. This reduces data discrepancies and duplicates, leading to data consistency.
Pluto's dashboard further makes tracking invoices and payments straightforward. This simplifies the payment and reconciliation process, preventing any errors.
Pluto automates and simplifies expense management processes.
Each expense prompts a WhatsApp notification for employees to upload receipts. Administrators and managers also receive notifications to approve expenses. Approved expenses get reimbursed immediately to employees' bank accounts.
This seamless approval workflow ensures proper control and accurate financial reporting.
Go Beyond Statutory Obligations
ICFR is not just a legal compliance. It is a practice to ensure financial visibility and control. While implementing policies and procedures is the main focus, finding the right tools to support your journey will make the process easier.
Pluto automates your financial processes to reduce manual errors and accelerate reconciliation. You close books 10X faster with more confidence.
Book a demo today, and see how Pluto gives you better control and visibility from day one!
Expense Management; Definition, Types & Tips
Effective expense management is a critical aspect of any organization's financial health, ensuring smooth operation through controlled employee spending. Employees frequently incur various business expenses, from travel and entertainment to office supplies. To facilitate reimbursement, these expenses must be meticulously reported with detailed descriptions and receipts, subsequently reviewed and approved by line managers and finance teams. This process, central to expense management, not only streamlines how employees pay for business expenses but also provides a comprehensive track of their spending through organized expense reports.
What is expense management?
Expense management refers to the systematic process of tracking, processing, and reimbursing employee spending. This involves scrutinizing expense reports, evaluating reimbursement claims, and enforcing company policies on permissible expenses. It is a key practice in ensuring adherence to the organization's expense policy while maintaining accurate financial records.
Why is expense management important?
As an essential part of any business, expense management is vital for various segments of a company, such as the following:
1. Finance teams
An expense management process is the most important to a finance team or accounting department. Their main goal is to sustain accurate business financial records and analyze past trends to determine future business decisions.
Additionally, it can help identify cost-saving opportunities and risks by providing insights into the company's financial health.
2. C-level executives & managers
Owners, managers, or C-levels are more concerned about growing revenue, managing risk, reducing expenses, satisfying employees, and having a productive business.
Having reimbursements processed quickly creates a feeling of trust and satisfaction among employees. This greatly influences the productivity of your employees and your company.
Maintaining detailed records of your business expenses ensures that your company stays compliant and assists companies in audit activity in case of fraudulent behavior.
Nevertheless, with the corporate income tax being introduced in 2023, expense management makes it simpler for businesses to file their taxes.
Expense management process
The expense management process is designed to safeguard against policy violations and mishaps, and it typically follows a uniform sequence across most businesses:
- Employee Expenditure: An employee makes a purchase for business purposes.
- Reimbursement Claim Submission: The employee submits a claim for reimbursement of the incurred expense.
- Claim Review: The submitted claim is reviewed and either approved or rejected.
- Payment Processing: Upon approval, the reimbursement is scheduled, often aligning with the employee's End-of-Month (EOM) salary.
Types of expense management
Approaches to expense management may differ from company to company. Here you'll find the different ways in which expenses are managed:
1. Paper tracking
Employees collect paper receipts and submit them to the accounting department for approval monthly or quarterly. This is the traditional (and outdated) method of managing expenses.
Businesses, especially in the UAE, usually use spreadsheets to manage their expenses and reduce dependency on paper receipts. Some common spreadsheet software is Microsoft Excel, Google Sheets, and Zoho Sheets.
3. Expense management software
An expense management software simplifies the process for companies by automating it. After an employee makes an expense, the managers are alerted to either accept or reject the expense. If the expense is accepted, it is usually scheduled to be reimbursed with the employee's EOM salary.
Pluto is an expense management software that helps accounting teams save time by automating reimbursements, expense reporting, expense tracking, and budget control.
When a business expense is made, a Whatsapp notification is sent to the employee, prompting them to upload their receipt by snapping a photo; this also simplifies the reconciliation process. When that is done, the admin/manager is notified to accept or reject the expense. If the expense is accepted, it is reimbursed to the employee's bank account in seconds.
On the other hand, Pluto gives you the ability to create unlimited corporate cards with spend limits so you won't have to go through an approval workflow.
Real-time expense reports are also one of the many benefits Pluto offers, helping finance teams, CFOs and accountants make informed decisions. Learn how to improve internal control over financial reporting on our new post.
Traditional vs. automated expense management
Despite the benefits of automated expense management, a large percentage of organizations in the UAE still perform manual expense management. This leads to expense reports that are time-consuming and prone to error.
Traditional expense management
Traditional expense management is one expense management process that relies on several steps to manage spending and ensure the process for an expense claim is correct. As an expense management solution, expense tracking is usually in the form of paper tracking or excel sheets, as mentioned above.
Typically, once employee-initiated expenses are made, the employee must store the expense receipts and file them as reimbursable expenses at the end of the month when the accounting department is doing the end-of-month closing. After the expenses are submitted, the approval process begins. The employee's manager either accepts or rejects the reimbursable expense; if it is accepted, it is sent to the accounting team for reimbursement.
This is considered a nightmare for accounting departments, as they will have to go through manual data entry and spend countless hours on expense reporting at the end of month closing.
Automated expense management
Unlike traditional expense management, automated expense management software reduces time spent on processing expense reports, managing the business's cash flow, reconciliation processing, and controlling expenses incurred for finance teams.
Automated spend management software, such as Pluto, eliminates the manual process and automates the process for finance teams from A-Z. With expense management software like Pluto, you can automate different flows, such as the following:
Pluto helps you manage expenses incurred by digitizing the reimbursement process. Once an expense is made, Pluto sends you a Whatsapp notification prompting you to upload your receipt by replying to the Whatsapp or by uploading it onto the Pluto app. Once that is done, the expense record is saved, so employees don't lose it, and the expense is submitted for approval.
As an added perk, Pluto also auto-categorizes expenses made so employees and finance teams won't have to worry about categorization!
With Pluto, all expense records are in one place, meaning expense reports are automated; this helps accounting departments save hundreds of hours on manual work.
Additionally, expense reports are trackable in real-time, giving managers, finance teams, and accounting departments complete visibility over the business's finances.
Close your books 5x faster!
Whether you use Zoho expense, SAP Concur, or Quickbooks, your accounting software can integrate directly with Pluto's platform.
Through our integration, you can also sync your chart of accounts and your GL codes to automate bookkeeping.
Pluto allows you to issue your employees unlimited corporate cards with spend control. If you have daily allowances, weekly budgets, or travel expenses, you can get better control over your employee spending by setting custom limits on their corporate credit cards.
Expense management advantages
If you've reached this far, you might already know the advantages of automated expense management.
Accurate expense reporting
- Real-time, automated expense reports
- Sort reports by day, week, month, or by department, or category
- Faster approval process for employees and finance teams
- Auto-categorization when uploading receipts
Monitor employee spending
- See what is being spent and where in real-time
- Set daily, weekly, or monthly allowances
Close books faster
- Integrate with all major accounting software to close your books 5x faster
- Sync your GL codes
Expense management policy
Employee spending can be controlled by implementing an expense management policy. The policy can function as grounds for rejecting or questioning expenses and help determine whether they should be reimbursed.
In every expense management policy, the following items should be included:
Types of expenses
A complete list of everything employees may purchase and what they may not purchase.
The current budget should be disclosed to everyone, and those with questions should be able to contact those responsible.
A reimbursement policy must specify the reimbursement method, such as online, by credit card, or by other payment methods.
Choosing an expense management software
If you're purchasing an expense management solution, make sure it fills your company's unique needs, offers the right level of functionality, and comes with a dedicated account manager.
Some of the key features you should be looking for are:
Real-time expense tracking and reporting
Having real-time expense reports is vital, as it helps finance teams monitor employees' expenses and manage them on the go.
For example, if the company's marketing department uses 70% of its monthly budget in the first two weeks of the month, the finance team can notify them that 70% of the budget has been used so they can plan and budget for the remaining 30%.
With Pluto, you can:
- Get notified as soon as an expense is made, so you know who spends what, where, and when
- Keep track of all business expenses, such as reimbursement, travel, and employee expenditure data, to avoid going over budget
End-to-end reimbursements are crucial for a business to operate seamlessly. With quick end-to-end reimbursements, employees no longer have to wait till payroll to get reimbursed.
With Pluto, you can:
- File a reimbursement request through Whatsapp or the Pluto app
- Get reimbursed in seconds
Approval processes should be hassle-free. It's essential to have automated approval flows to ensure employee expenses and expense claims are approved by the right managers.
With Pluto, you can:
- Automatically assign expenses to the right reviewer
- Create your own customized approval flow
Integration with accounting software
Integrating your accounting platform with your expense management software reduces the time spent on bookkeeping.
With Pluto, you can:
- Integrate most major accounting platforms
- Sync your chart of accounts
- Sync your GL codes
- Close your books 5x faster
Customizable budget control
Setting limits and budgets is essential to control your company's financials fully. This helps your company stay within its budget and avoid mishaps with company spending.
With Pluto, you can:
- Create unlimited corporate cards with set limits
- Increase limits on corporate cards in seconds
- Issue vendor-specific cards
Pluto combines the above features with easy integrations, complete visibility, and total control over every aspect of your company's expense management.
Modern finance teams save time & money with Pluto.
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