Expensify is a cloud-based expense management application that tracks expenses and allows employees to submit them for reimbursement. It focuses on expense tracking and reporting, with features like individual tracking, expense policies, and approvals. Expensify offers free plans for individuals and paid plans for businesses starting at $20 per user.
Expensify
Pros
- Provides basic analytical tools for analyzing expenses, such as charts and filters
- Contains approval flows and expense policies
- Easy-to-understand interface
- Submit mileage expenses
- Submit expenses based on billable hours
Cons
- Not a substitute for bookkeeping software
- No multiple approval workflows on lower-tier pricing plans
- Limited SmartScans included for individuals to stay in the free plan
When To Use Expensify
- Companies using popular accounting software: Expensify integrates with top accounting software brands, such as QuickBooks, Xero, Oracle, and Sage.
- Companies with a high volume of expense transactions: Being a preaccounting app, Expensify prepares expenses for the books. It also speeds up reimbursements with its direct deposit feature and reduces the work volume of the accounts payable (A/P) clerk in generating reimbursement vouchers for manual reimbursements.
- Companies that want free corporate cards: Expensify offers a bundle for Collect and Control plans, which include the Expensify card. If your company is still in the process of getting corporate cards for employees, Expensify is worth considering since you get free cards.
- Automated expense reimbursement: Expensify lets you reimburse expenses via direct deposit through an automated clearing house (ACH). All you need to do is set up your bank account within Expensify, and you can send reimbursements automatically to the employees you owe.
When To Use an Alternative
- Companies looking for bookkeeping software: Expensify is only a pre-accounting app. It focuses on expense tracking and reimbursement and doesn’t provide basic accounting features. For complete accounting, we recommend QuickBooks Online, our best small business accounting software.
- Freelancers and solopreneurs who need simple expense tracking: Expensify’s best trait is its collaboration feature for recording expenses. If you’re a solopreneur or freelancer, you don’t need Expensify’s collaboration features because you’re both the submitter and approver of expense. Alternatively, you can try FreshBooks because it has simple expense tracking for freelancers.
- Businesses looking for an affordable standalone expense tracker: Zoho Expense offers a more affordable monthly plan than Expensify. Aside from that, Zoho Expense offers corporate card reconciliation and can integrate with popular accounting software like QuickBooks and Xero.
Expensify Deciding Factors
Expensify Alternatives
Expensify Pricing
Expensify offers two groups of pricing plans for individuals and groups. Under each pricing group, two tiers of pricing options are offered depending on the users’ needs.
Expensify Features
Expensify’s core feature is expense management—nothing more, nothing less. It focuses on expense recording, tracking, reporting, and reimbursement. If you maintain books and accounts for your business, you can integrate Expensify with your accounting software.
Setting up Expensify
After logging in, the software will prompt you to set up your account. Expensify’s concierge will guide you during your first use of the app. It’ll provide tips and procedures to get you acquainted with its features. Regardless, you can always contact customer support by clicking the blue message bubble at the bottom-right corner of the screen.
Setting Up Expense Policies
Policy Screen
Before you begin utilizing the app, it’s best to set up your expense policies. Expensify lets you set standard rates and quantities.
Setting up Expense Policies
The Expense Policies screen will instruct Expensify on how to treat your transactions. You can set cash expenses as reimbursable or nonreimbursable by default. You can enable tax tracking for mileage, specify the unit of measure, and set mileage rates. Expensify has its default rate, but you can add more rates as you see fit. Aside from mileage, you can also set your billable hourly rate.
Setting up Per Diem Policies
If your company allows per diem for employees, Expensify can automate it based on your per diem rates. You can import your rates from a spreadsheet, and Expensify will apply them to your future transactions. It also lets you set the per diem on a default category for easier pooling of per diem expenses.
Encoding & Reporting Expenses
If you click Expenses in the left menu bar, it’ll bring you to the Expense tab. This will show you all expenses encoded in the system. Each expense is marked depending on its status:
- Unreported (white): Expense hasn’t yet been added to any report
- Open (light blue): Expense has been recorded and added to a report
- Processing (dark blue): Report has been submitted but not yet approved
- Approved (light green): Report has been approved but not yet reimbursed
- Closed (gray): Report has been approved but not reimbursed
- Reimbursed (dark green): Expenses in an approved report has been reimbursed
Expense Overview
There are two ways to encode an expense: manually or via SmartScan. If you have to enter several expenses, you can add multiple entries in a single window, as shown in the image below.
Encoding Multiple Expenses
When encoding expenses manually, you can enter the merchant, applicable tax, amount paid, expense category, attendees, and a brief description of the expense. You can also add a PDF copy of the receipt or its image.
Entering Expenses Manually
View Reports
Once everything is laid out, you can add expenses to a new or existing employee’s expense report. Just click the drop-down menu beside the Report tab, and it’ll show all your reports. In case there are no existing reports, Expensify can auto-generate a report for you. Once you click Save, the expense’s status will be Open.
Submitting Mileage Expenses
Expensify can record mileage expenses in two ways: entering miles manually or via map. You can use your odometer to track your miles and input them into Expensify. The app will compute your mileage cost automatically based on the mileage policy and applicable taxes. Alternatively, creating mileage expenses via map allows you to enter your starting point and destination, and Expensify will compute the number of miles automatically.
Entering Mileage Expenses
Entering Mileage Expense Using the Map
Submission of Expenses Based on Billable Hours
Expenses incurred based on billable hours are also accepted by the system. You can simply add the number of hours billed, and Expensify will do the rest.
Entering Expenses Based on Billable Hours
Data Visualization
If you want to see a brief snapshot of your expenses, the Expense screen provides essential analytic tools like charts and graphs to visualize your transactions. You can also filter specific expenses based on status to assess your efficiency in approving expenses.
Visualization of Expense Categories
Approvals
All expenses are pooled into a report that is then submitted to the approver. If you click Reports, it’ll show you all reports. The approver will review the report and approve or reject some of the items enumerated. Only approved items will move forward in the process.
Reports Overview
If the approver rejects a report, it goes back to the submitter and is marked as “Retracted.” All expenses in a rejected report will become Open again. However, after making the necessary changes, the submitter can resubmit it for approval.
Rejecting a Report
Reimbursements
Modes of Reimbursement
After approval, expenses are now ready for reimbursements. The system lets you reimburse via direct deposit or manual reimbursement. For direct deposit, you have to set up your bank account within Expensify, and it’ll reimburse via an automated clearing house (ACH). Manual reimbursements let you transfer cash physically while Expensify only marks the report as Reimbursed.
Approved and Reimbursed Report
Expensify User Reviews
Those who left Expensify reviews praised the platform for having a clean interface and mentioned that its SmartScans reduced data entry time when recording expenses. We agree that the user interface (UI) design and overall user experience of the system are outstanding. However, some users said that they found inefficiencies, such as the inability to upload credit card statements. There are also instances where some encountered duplicate entries for receipts.
Overall, Expensify offers a competent expense tracking solution. The score of Expensify in user review sites are as follows:
Frequently Asked Questions (FAQs)
How much is Expensify?
Expensify is free for individuals. Business plans start at $5 per user, per month, if billed annually.
Is Expensify worth buying?
While Expensify can be expensive compared to competitors, users get free Expensify cards for the whole team. Expensify is worth it if your business wants to give all employees a company card.
Bottom line
Overall, Expensify is the ideal app for businesses needing to process and reimburse expense reports. Its features can help accountants and accounting clerks speed up bookkeeping procedures and correctly book expenses based on Expensify reports. In other words, expenses processed under Expensify will provide more accurate information for bookkeeping than those tracked manually in a spreadsheet.
We highly recommend it as a supplementary app to your accounting software. However, it’s not a standalone bookkeeping program.