Before you have a bank account/get funded there are a few ways to manage your expenses.
The spreadsheet isn’t the greatest option - it requires manual work to maintain and will need to be manually put into your accounting system. But we’ve seen hundreds of organized founders use spreadsheets when they first found their companies, so we know it’s possible.
Expense management software can be cheap and very effective. Expensify has $4.99 per month plans for individuals, and this is a good option to use before you’ve been funded and have a bank account.
Two of our favorite finance tools, Rho and Brex, have a bank or cash management solution built into their expense management tools, which makes them possibilities for a company that has yet to fund raise but where the founders will kick some cash into the business. Rho is a real bank, and is used to working with pre-funded startups, so that’s our current recommendation if you want a bank + expense tool bundle prefunding.
After you’ve gotten financing, even if it’s just $250,000, you’ve got more options. And if you are going to hire quickly, you’ll have employees - who will need to get reimbursed for items they put onto their own cards for the company, or who will need corporate cards.
At this point, you NEED an expense management software. Look for an automated expenses management system that can: document the paper trail of expenses for IRS audit purposes, help keep founder and business expenses cleanly separate, and easily integrate with your accounting system. The best expense management tools have a mobile app for scanning receipts on the go, accept invoices and payment records via email and have a killer web app for managing your records.
Some of the key features to look for in a system:
|Cost of Basic Expense Management||Free||Free||Free||$5 per mo per user|
|Cost of Advanced Expense Management||Free||$49 per mo (unlimited users)||Coming Soon||$9 per mo per user|
|Corporate Card or Expense Management Software?||Card||Card||Card||Either|
|Requires Solution Specific Card||Yes||Yes||Yes||No|
|Receipt Scanning App||Yes||Yes||No||Yes|
|Virtual Cards for Employees||Yes||Yes||Yes||Yes|
|Has a Bank or Cash Management System||No||Yes||Yes||No|
|Visit Site||Visit Site||Visit Site||Visit Site|
One tip we have for companies that are going to have recurring reimbursements to specific employees is to use a payroll system that actually automates these recurring reimbursements. For example, Rippling has a great feature whereby you can send the same reimbursement to an employee every month. For example, if you pay $50 for an employee’s cell phone or home internet connection, why go through the hassle of having them submit an expense report every month for that? Read more about how to choose the best payroll system for your company.
Save future you (and your future accountant) a ton of time and headache. If you’re planning on growing fast after you raise capital, get a solid expense management solution set up. If you’re really early, go sign up for Rho. If you’ve already got some funding, you have more options like Brex and Ramp. But all are easy - do it now!
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