6 misconceptions about employee expense management

Effective expense management is critical for controlling your businesses finances and empowering your team to perform efficiently. However, outdated ideas often prevent businesses from adopting streamlined, effective practices. Below, we break down six common misconceptions and how modern tools like PEX address them.

1. Expense management is too complex to automate

The Misconception:
Many CFOs believe their expense workflows are too unique or complicated for automation. From reconciling receipts to tracking multiple team budgets, these processes seem inherently manual.

The Reality:
Modern tools like PEX simplify even the most intricate workflows. By using AI, we automate repetitive tasks such as matching receipts to transactions and categorizing expenses with pre-programmed GL codes. Your finance team can customize approval workflows and spending rules to align with your business needs, whether for a small nonprofit or a multi-department construction firm.

Case in Point:
Finance teams using PEX save up to 10 hours monthly by automating manual processes. For example, receipt matching alone saves 3.47 minutes per transaction. Over hundreds of transactions translate to days of regained productivity​ for you and your team.

2. Employee expense management with real-time visibility isn’t achievable

The Misconception:
Finance teams assume it’s impossible to monitor company spending as it happens, particularly when employees are distributed across locations or projects.

The Reality:
Platforms like ours enable real-time tracking of every transaction, with instant updates for purchases made on prepaid or virtual cards. Dashboards provide immediate insights into where money is being spent, while alerts notify admins of any irregularities. With this real-time visibility, you can address potential budget overruns or unapproved expenses before they spiral out of control.

The Benefit:
Having live updates not only helps you stay on budget but also supports accurate financial planning and cash flow management. Stop relying on outdated reports and make proactive decisions based on up-to-date information instead.

3. Corporate cards are too risky due to potential misuse 

The Misconception:
Many companies avoid issuing corporate cards due to fears of overspending, fraud, or unauthorized use. A shared card often exacerbates this concern because it’s harder to track who spent what, why, and where.

The Reality:
PEX virtual cards mitigate these risks by allowing companies to issue purpose-specific cards with pre-defined spending limits. You can restrict cards by merchant type, spending category, or even deactivated after one-time use. This ensures that employees have the freedom to make necessary purchases within company-approved guidelines.

Key Features:

• Custom Spending Rules: Limit purchases by amount, merchant type, or time
• Real-Time Deactivation: Cards can be turned off immediately if misuse is detected
• Audit Trails: Every transaction is tied to a user, ensuring accountability

Example Use Case:
Let’s say an event planning firm provides its coordinators with virtual cards limited to travel and vendor expenses. If a cardholder tries to exceed the set limit or use the card at an unauthorized merchant, the transaction is automatically declined​​.

4. Manual reimbursement is a necessary hassle 

The Misconception:
Many organizations still handle reimbursements manually, assuming that logging miles, scanning receipts, and filling out reimbursement forms is unavoidable.

The Reality:
Manual reimbursements are prone to errors and delays. Automation eliminates these inefficiencies. AI-powered tools read and categorize even hard-to-interpret receipts, such as fuel station printouts. Integrated workflows also allow employees to submit digital copies of expenses for approval directly in the system, reducing the time spent chasing paper trails.

PEX’s Benefits:

• Simplified Workflows: Employees upload receipts via mobile apps or email
• Accuracy: AI ensures data entry is consistent and error-free
• Faster Reconciliation: Reimbursements are approved and processed within hours instead of days

Impact:
For field employees or teams handling frequent mileage reimbursements, this automation saves valuable time. Companies just like yours avoid errors caused by manual entry and improve employee satisfaction by paying reimbursements promptly​​.

5. Expense management can’t contribute to cost savings

The Misconception:
Businesses often see expense management as a necessary administrative burden rather than a source of cost savings.

The Reality:
Poorly managed expenses lead to hidden costs such as fraud, inefficiencies, and delayed financial insights. Automated systems like PEX reduce overhead by cutting out manual processes, preventing duplicate transactions, and limiting overspending through customizable controls. Organizations also benefit from streamlined audits and compliance preparation.

Hard Facts:

• Businesses save an average of $63 per transaction when switching to purchasing cards​
• Automating GL code application saves 2.92 minutes per transaction, enabling faster month-end close​

Case Study:
A nonprofit organization using PEX reported a 93% reduction in reconciliation time, freeing up resources for strategic initiatives​.

6. One credit card suffices for employee expense management

The Misconception:
Small to mid-sized businesses often rely on a single shared credit card, thinking it’s simpler and cost-effective.

The Reality:
A shared card creates inefficiencies and limits visibility. It can lead to confusion, errors in allocation, and delays in reconciliation. Our prepaid and virtual cards enable organizations to issue individual or team-based cards, each tied to specific budgets or purposes. This ensures accurate reporting and eliminates the bottleneck of one card being used for diverse transactions.

Advantages of Multi-Card Solutions:

• Customizable Limits: Allocate specific budgets to each department or individual
• Improved Transparency: Every transaction is logged and visible to administrators
• Fraud Reduction: Prepaid cards minimize credit exposure and unauthorized use

Result:
Companies that adopt a multi-card strategy through experience smoother financial operations, faster reconciliations, and greater employee accountability​​.

Why a streamlined and automated employee expense management like PEX makes sense for your business

Outdated misconceptions about employee expense management can hinder your organizational growth and efficiency. We demonstrate that automation, real-time visibility, and robust controls are not just possible—they’re essential for any forward-thinking company. By addressing these myths head-on, your business can reduce costs, boost efficiency, and empower your finance team to focus on strategic priorities.

Request a demo today to see how PEX can help you achieve a streamlined and automated employee expense management.