<aside> What’s this about? An expense management system, or EMS, is a software tool that lets you manage staff and company expenses.

What do I need to do? Determine a suitable EMS given your organization’s needs and budget, and configure the system to match your organization’s financial categories and procedures.

Contents

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Further reading

Databases

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The basics of expenses

Expenses broadly refer to costs incurred in the ordinary course of running an organization.

In the context of an expense management system (EMS), we’re typically thinking about staff expenses and reimbursements — such as costs relating to travel, training, and development.

(Be aware that “EMS” can also be an abbreviation of “enterprise management system” — a software package for especially complex organizations, which we aren’t discussing in the Nonprofit Playbook.)

What’s an EMS?

An expense management system, or EMS, is a software tool that lets you manage staff and company expenses.

A typical EMS supports out-of-pocket expenses, receipt uploads and scanning, company cards, bill payments, and customizable approval structures.

The interface for Ramp, a recommended EMS

The interface for Ramp, a recommended EMS

Setting up an EMS

There are dozens of well-reviewed expense management platforms in the wild, and it can be difficult and time-consuming to identify one that suits the needs of your organization.

Here’s how we recommend you approach things:

  1. Identify priority features: Not all platforms offer the same sets of features, and not all features are implemented equally well. It’s worth identifying which features are deal-breakers for your organization, and potentially ranking features by priority. When we analyze EMSs, we’re typically interested in certain features like company cards, out-of-pocket reimbursements, and approval structures. Here’s a template you can use to determine your priority features.
  2. Determine budget: What’s the value of a good EMS? This will depend on your budget, team culture and working preferences, and whether you’re already using other systems that overlap with the features of the EMS. (For example, you may already be using an HRIS that supports expense management, which could make the value of the EMS significantly lower.) A typical pricing structure for an EMS is on the order of $9 per user per month. However, this typically depends on whether you’re looking for all three expense types (reimbursements, cards, and bills) or just a subset. Here’s a template you can use to determine your budget.
  3. Create a comparison spreadsheet: An EMS touches many elements of an organization, from department budgets to financial controls. This means that there are often several stakeholders in play. It’s therefore useful to present the options you’ve considered — with summaries, pros and cons, expected costs, and the presence or absence of your priority features. As you’re doing this, make sure to check out endorsements and see what users of the EMS have to say about it. Look up ratings on Capterra and Trustpilot — a score of 4.5 and above (ideally based on 100+ reviews) is a good sign. Also, check out our assessment. Popular platforms include BILL Spend & Expense (formerly Divvy), Ramp, and Expensify.
  4. See the platforms in action: There’s no substitute for a demo of the EMS, to get a feel for the user experience, user interface, and the actual implementation of the features you’re interested in. You might begin your investigation by checking out third-party walkthroughs on YouTube — like these walkthroughs for Expensify and Wise. Most providers will have their own YouTube channels with first-party tutorials, but these are often less useful or impartial. As you narrow down your list of contenders, register for demos or trial accounts with the providers directly.

Here’s a template you can use to highlight the differences among platforms, with some suggested platforms listed to get you started.

As when you Set up an accounting system, make sure to configure an appropriate chart of accounts, automated bank feeds, recurring transactions, payment rules, and custom budget reports.

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