The products in this comparison generally come from one of two directions: general purpose applications designed to capture payables and receivables data from all manner of sources; and apps built from the ground up to handle business expense claims.
Data or expenses?
As the industry has evolved, these two disciplines have started to overlap - in the end all of the items they’re handling are transactions that feed into accounting systems. The question for those reviewing software is which is the priority for your search: an easy-to-use tool you can put in the hands of staff or clients to get better visibility and control of their spending, or a more wide-ranging system that converts all your transactions into electronic data?
Most vendors will undertake to meet all your needs, but the expense specialists will have more mature tools for authorisation and policy enforcement, while the data management experts will tend to have stronger validation, analysis and accounting features that can streamline other processes besides expense management.
MTD and the growth of built-in apps
Use of expenses management apps among the AccountingWEB population has more than since 2015, driven mainly by the need to capture digital records to satisfy HMRC’s planned Making Tax Digital regime.
Specialist developers such as Receipt Bank and AutoEntry have prospered during this data capture boom, but as the requirement has expanded, accounting software developers have moved in to claim a piece of the action.
FreeAgent and Clear Books have offered mobile apps that compete with specialist suppliers for several users, and have been joined more recently by Xero, QuickBooks and Sage, all of which have their own variants of the photo-capture smartphone app.
These branded add-ons give you the basics for managing expenses with a good degree of integration, but will not match specialist tools for things like approval, policy enforcement and on-billing expenses to clients. If you want more than a “snap and submit” app, then spend more time reviewing specialist candidates.
The integration factor
Definitions and meanings of particular phrases are always important in technology, but take on extra nuances in the world of data capture. Nowhere is this more evident than when suppliers talk about their integrations with other systems. For maximum efficiency, you want the expense (or receivable) data to go from the point of capture straight into your accounts system, perhaps with a control point or journal posting stage built in.
This level of tight integration requires program-level links (APIs in industry parlance) and an element of collaboration and access control between the two systems. Not all programs offer the same connections. Test prospective data capture systems extensively with all of the data types and applications you intend to use to ensure your configuration operates seamlessly. It will lessen the benefits if you end up having to shovel bulk uploads between them.
Invoices and financial transactions contain personally indentifiable information and are therefore subject to the rules enshrined in the General Data Protection Regulation (GDPR). If you are outsourcing control of the information at any point, it is your responsibility to ensure it is secure.
This should already be part of your own GDPR regime, but it is a good discipline to question transaction data suppliers about where your data will be stored, what data protection policies and precautions they have in place, and whether they can respond to a subject access request swifty and delete all instances of an individual if required.
How much intelligence is involved?
When reviewing these applications, you will hear a lot about automation and machine learning. Optical character recognition of transactional data has a long history and has been one of the main testing grounds for machine learning in that time. It’s easy to assume that AI supercomputers are controlling of this data capture. This is increasingly the case, but in many, many cases, people in various locations are entering and verifying the data that comes back to you from these systems. In the short term, it probably doesn’t matter much to you whether your data is processed by machines or humans, so long as it is accurate, fast and reliable. But even with mass outsourcing, economics will ultimately favour the suppliers who apply technology most effectively to transaction data.
Scanning volumes vary widely and are difficult to predict, which can make flat rate or per user fees uneconomic for smaller entities. AutoEntry’s credit-based approach that charges by the number and type of scans has shaken up the market in the past few years, prompting Receipt Bank to adjust its pricing strategy.
Given the competitive nature of this market, AccountingWEB members have suggested that it is worth raising the issue with suppliers when you get down to final negotiations.