Don’t sacrifice rewards for the sake of expense management

Many business owners feel a strong responsibility to identify the best expense management system for their operations, often without fully assessing the total costs, including potential rewards they might miss out on.

While these owners frequently maximize their personal credit card benefits, they often take a different approach for their businesses, where expenses can be significantly higher.

So, are expense management platforms like Ramp, Rippling, and Brex right for your company? The answer lies in the specifics.

What do expense management platforms provide?

Platforms like Ramp integrate expense management with credit card services. Rippling and Brex also provide various rewards when using their credit cards; for instance, Rippling offers up to 1.75% cash back, while Brex provides points that are particularly valuable for travel expenses, though less so compared to traditional business credit cards.

These platforms aim to enhance control over spending, set expenditure rules, and facilitate card issuance. They offer APIs designed to connect with your key systems to streamline bookkeeping and expense oversight.

How much expense management do you truly need?

When evaluating expense management solutions, the most pertinent question isn’t which platform is best but rather, “What type of expense management fits your business requirements?”

Many popular accounting systems can automate tasks like importing and reconciling credit card transactions. You may require a comprehensive solution like Ramp or Rippling if your organization needs strict spending policies. While some corporate credit cards allow you to set upfront spending limits, platforms like Rippling incorporate rules-based logic to adjust for circumstances like peak travel pricing.

Evaluate the numbers

Once you determine your optimal level of expense management, consider what potential rewards you could be missing. At a minimum, look for a cash-back credit card offering at least 2% that aligns with your business needs. Although Rippling’s 1.75% cash back may seem close, remember that alternative cards can provide more lucrative rewards. For example, the Capital One Venture X Business card allows you to earn 10 miles for every dollar spent on certain travel expenses, equating to a 10% rebate on hotel and rental car bookings.

Find the right balance

While some businesses require rigorous expense oversight, they also risk sacrificing potential rewards by favoring strict management solutions over traditional credit cards. A mixed strategy often proves to be more beneficial.

For instance, in my own business, we utilize an accounting system designed for our restaurant operations. This platform automates many routine tasks and integrates seamlessly with invoices and expenditures from key vendors, including our corporate credit cards.

The rewards from these corporate cards extend beyond personal vacations; they also facilitate employee trips or alleviate financial burdens during family emergencies.

Conclusion

Before committing to an expense management platform, assess the full spectrum of benefits available. Such systems can be advantageous for companies with employees who frequently travel or incur dining expenses. However, it becomes challenging to justify stringent spending controls in categories like shipping or advertising if doing so leads to missing out on significant rewards.