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Traditional Expense Cards are Not Built for SaaS Spend Management

6 min read Indus Khaitan


Corporate expense cards have been around as long as consumer credit cards. They play an essential role in expense management, allowing employees to make necessary purchases when they’re needed while maintaining accurate reporting and accountability. Even before mass-market consumer credit cards became commonplace, traveling employees used corporate expense cards to make purchases on the road.

Expense cards have come a long way since then, and they are no longer “one size fits all.” Instead, most cards differ regarding their spending limits, security features, integrations, restrictions, and reporting. For example, a business that owns a fleet of delivery vehicles might have a fuel expense card that it issues to drivers, but that does not work for other purchases.

Despite all that innovation, expense cards have failed to keep up with one of the fastest-growing expenses for companies: Subscription software (a.k.a. SaaS). Regulating SaaS spending is a new challenge, and it requires more modern tools to meet that challenge—and that includes looking at our old friend, the expense card, in a new way.

Why is Regulating SaaS Spending a Challenge?

Why is regulating SaaS spending a challenge, and why aren’t expense cards helping with that challenge? Part of the problem stems from one of the main selling points of SaaS: The cost of a software investment can be spread out in time with monthly payments instead of a lump sum.

It’s true that SaaS software is easy to purchase and can usually be tossed on a departmental card without too much worry. But that is the very issue. Such spending can quickly get out of control. There could be redundant accounts with a piece of software or unused licenses. Features could go underused, too. Different teams might use different SaaS solutions for the same function, even when it makes sense to consolidate under one set of licenses in a single solution. Managing pricing tiers and cancellations can get tricky.

Granted, an expense card can help a department head (or finance professional) track purchases. When an employee buys something, they are great, get a receipt, consume the goods, and go back to the office to reconcile the completed transaction—for example, when salespeople are traveling. But the tools needed to manage SaaS spend are much different from the more traditional tools needed for typical expense account purchases.

Indeed, corporate expense cards fail because they are designed to mimic personal credit cards. However, they are not built to track and manage enterprise-wide expenses across an entire category like SaaS spending, which is recurring, has downstream data implications, and could add to organizational risk if left unchecked.

Here are the five reasons where traditional expense cards miss the point of managing modern software spending.

Incentives That Don’t Incentivize 

Many corporate expense cards reward users for purchasing more. In this way, they look very much like personal credit cards. But in my experience, the number of departments and companies that care about, say, 2% cashback is vanishingly tiny.

Companies want to control flagrant spending, not incentivize it. They would rather have a robust set of reporting tools and sophisticated spending rules at their fingertips over an arbitrary amount of money coming back each month.

Reports That Aren’t Clear

Let’s talk about those reporting tools. Yes, an expense card will give you a list of transactions for the month, along with vendors and amounts. If you are lucky, there is also some degree of categorization and maybe some data on spending trends.

If you purchase your SaaS software with an expense card, all renewals and licenses are getting lumped in with one-time purchases, like that client dinner or airline tickets to fly out to a trade show. Already, that makes getting a handle on SaaS spends difficult.

And when SaaS line items appear, they are not always clear. All you might have is a company name or just part of a company name. If you’ve ever found yourself wondering, “Wait, what does Thingamagr do again? Is that our team chat software or our bug report software? Or our image archive?”

These inconveniences are minor, however, when compared to the lack of analytics. Because SaaS is a recurring cost, it would be good to know the total by software category and how it is changing or trending with time. Traditional expense cards simply don’t have a convenient way to visualize or track that data.

No Clues for Controlling “Zombie Spending”

Suppose you discovered that a piece of software used by your company was being underused by 50%—meaning that, for the past year, you have been paying for twice the number of licenses than were used. Wouldn’t you want to know that? That kind of information would make it very simple to rein in IT costs.

Expenses cards and their reports simply are not designed to show companies this kind of “zombie spending.” Indeed, on the model of personal credit cards, the card company just assumes you are using the purchase that you made. (Think: That’s why there is an entire repossession industry—to stop people from continuing to use something that they paid for with a credit card!)

But zombie spending is exactly the problem that crops up again and again with SaaS software that gets purchased on the side and auto-renews without a thought. It’s what leads to shadow IT and shelfware.

Limited Ability to Manage Renewals and Cancellations

Because SaaS solutions are (typically) subscriptions, they renew monthly or annually. Some are good about warning you about upcoming renewals and their cost—but not all of them. The same applies to cancellations: Some solutions make it easy to cancel or downgrade, but others make it downright mysterious how to cancel their service.

Expense cards just aren’t in the business of managing renewals and cancellations. Instead, they would rather you not cancel any transactions…and might charge you hefty fees if you do.

Short on Innovation

Let’s be clear: Expense cards can be a great tool, especially given the numerous new tools that they have, like spending rules. So there is innovation going on at the companies that supply these cards.

When we say there is a lack of innovation, we refer to the novel ways in which somebody could use such cards if they had some of the features above. But, for the most part, the industry has not gone down that path. Instead, we see an arms race when it comes to cashback incentives and POS tools.

Fierce competition between similar-seeming cards has disincentivized innovation. No one wants to be the first to test out a new tool or use case. As a result, the expense card industry has been thoroughly commoditized.

Competition is a good thing, but it should lead to more innovation, not less. So ask yourself: What more can you expect from your company expenses card? What do you wish it could do?

Next Steps

And if those questions lead to more questions about what’s possible when it comes to SaaS management, reach out to us for more answers. We might just have the card for you to manage your SaaS expenses while measuring and reporting consumption.

About Quolum

Quolum is a full-stack SaaS Spend Management product. Its data-driven renewals, spend controls, license monitoring, contract oversight, and a buying concierge helps companies save millions of dollars in spending.
Quolum is ideal for companies that have hundreds of SaaS tools. Finance, Procurement, IT Teams, and departmental spend owners use Quolum to help manage SaaS sprawl and remove shelf-ware.
Talk to us to get a demo of the product. You can start seeing savings in just a few weeks. No spreadsheets are required.