Expense management is the software that handles what employees spend on the company's behalf, from the receipt to the approved claim and the refund. Each claim is called an expense report, or expense claim: a list of what an employee spent, with the receipts, sent for approval.
Without software, the process is slow. An employee keeps paper bills in an envelope, fills in a spreadsheet at the end of the month and hands it to the manager. An employee in the accounts team then checks every bill by hand. The refund, called a reimbursement, can take weeks.
Expense management software replaces these steps. Consider an engineer at a construction company in Raipur who visits a site in Bilaspur. He pays ₹650 for a taxi and ₹420 for lunch, with his own money. He photographs each bill in the app. The software reads the date, the amount and the GST number from each photo. It checks each item against the company's policy, for example a food limit of ₹500 a day. His manager approves the claim on her phone. The ₹1,070 is then added to his next salary through the company's HRIS and payroll system.
When an employee pays with a corporate card, the software receives each card payment automatically. The employee only adds the receipt and the reason for the purchase. Trips booked through corporate travel management software arrive in the same way.
The software also handles petty cash. Petty cash is the small amount of cash an office keeps for minor expenses, such as tea, couriers or a plumber. Each payment is recorded in the app instead of a notebook. Many small Indian businesses use simple apps that only record the cash they spend.
At the end of the month, the approved expenses are posted into the company's ERP, its main accounting system. The finance team then checks that every card payment and every refund has a matching receipt. This check is called reconciliation.
Expense data also matters for tax. A bill that carries the company's own GST number can let the company claim back the GST it paid, as input tax credit. But GST law does not allow this credit for some items, such as food and taxi hire. So the software checks which bills qualify.