Dakota Software finance director Nick Lay canceled his Concur Expense implementation two months ago, but he still gets monthly bills. This, he said, is a sign of a provider that’s too big for a small enterprise like his. On the other hand, new supplier ExpenseBot takes his phone calls and emails. ExpenseBot’s founders consider its technology a differentiator, but their help desk seems to make them most proud.
Both Ohio-based companies, ExpenseBot and Dakota Software have no other relationship than that of vendor and client. ExpenseBot asked Lay if he would speak to the media, a tall task for many companies. He was happy to oblige, but not because he’s a Concur hater.
“I came from a company that used Concur,” said Lay in an interview last week. “I was on the road for a year. I loved what it had done for us. It was basically hands-off reporting — electronic receipts, etc. At month’s end, everything’s there.”
When he joined Dakota a year ago, the company was processing its reports with spreadsheets. Employees were scanning receipts. Accounting personnel were buried in data entry. This manual processing cost the company at least $10,000 a month in manpower alone.
Lay said that after a demo from Concur, Dakota was “off and running” on implementation. The first issues, he said, came when implementation sessions required hours of phone time. “I didn’t think it would be that much of a hassle,” Lay said. “I wasn’t told a lot of things. They didn’t respond to basic requests. I realized they wouldn’t give us the control and attention we needed.”
Having heard of ExpenseBot from a “random local email chain,” Lay reached out and immediately found the company “much more helpful.”
Set-up for 35 Dakota users was easy, he said. It was done within 24 hours. “Say you have a $50 limit on meals per day,” Lay explained. “You type in $50 on the relevant line item, fill in some account numbers and that’s about it.” He recognized that superior customer service — “the best I’ve received by far with software companies” — has a lot do with ExpenseBot’s modest operation. Concur, of course, “is a massive company now.”
Lay also acknowledged that Concur can scale up for global organizations with complex needs. “Absolutely,” he said. “If you’re owned by SAP you’re not going after privately held software companies in Cleveland.”
Concur disagrees with that sentiment. “Concur is committed to delivering the highest levels of service to all customers,” according to a spokesperson. “Small- and medium-sized businesses are an important part of our business, and we are actively working with this customer to resolve the issue.”
Lay said every feature his company wanted from Concur was available in ExpenseBot. Managers now are looking more closely at submitted expenses than they were when Dakota manually handled them. Importing expense data into the company’s bookkeeping software fell to minutes from days.
Lay didn’t attempt a hard calculation of return on investment, but at $8.10 per user per month (Concur had charged per report), ExpenseBot is an obvious improvement over the wasted manpower pre-automation.
Dakota Software spends $30,000 to $40,000 a month on travel and entertainment. It has considered but doesn’t use a travel management company. It does have discount deal with Hertz and encourages employees to book air travel in advance.
Co-founders Ed Buchholz and John Siladie created ExpenseBot in 2013. That was five years after Deem predecessor Rearden Commerce acquired ExpenseWire, where they worked together. In between, they created and sold an unrelated financial tech startup.
The partners envisioned a “robot that does your expense report,” but it had to be more than that, said CEO Buchholz. “It’s not easy to break into the expense management space with a nifty gadget.”
They decided they needed an expense system that rivals Concur’s functionality for the midmarket, learns how the user typically categorizes personal or corporate card charges, begins to do that automatically and then takes the concept to a concierge-type level. The last part is coming this quarter.
“Not only do you get all the best of what a CFO needs and a great user experience, but also we’re providing a proactive, bite-sized approach to getting an expense report done,” said Buchholz. “Expensify CEO David Barrett calls this ambient computing. I call it context-driven artificial intelligence.”
Whereas traditionally charges pile up and are submitted manually, he explained, ExpenseBot will submit automatically once the amount due to the user hits a predetermined threshold. Hence the move away from per-report fees.
The software will integrate with email applications, calendar data “and GPS passively to do cool things like the automatic expense,” Buchholz said. “We see charges that hit your card and can ask the user if they want to submit those. ‘Expense it’ versus ‘Don’t expense it.’ And we learn over time based on how often, when and under what variables you choose to expense. At 78 percent to 79 percent ‘expensability,’ we begin to automatically add that for you.”
Got a lunch meeting in your Google calendar? Notifications remind you to snap a photo of the receipt or, if appropriate, track mileage. Email addresses of participants build fields of meeting colleagues. Microsoft Exchange support is coming soon, said Buchholz.
Additional iterations of the software will know if your expense should go to a different division’s P&L or a different general ledger item, or if it’s client-billable and to whom.
First-generation expense management automation took users a long way past the manual processes that once bogged down Dakota Software. But Buchholz believes there’s another leap underway. “The biggest blocker is the user having the impetus to make it happen,” he said. “You decide to log in. You decide to delete that one line item because it’s a payment. That one over there was a client, you enter their name. ‘Yes, it’s okay, add those …’ This is the 2003 interface. It’s a commodity at this point. That you had to come up with a reason to sit and do this is what is to be disrupted.”
So far ExpenseBot has “a couple hundred” small and medium enterprise customers. The very smallest of them pay nothing unless they need advanced capabilities, under the so-called freemium model. The sweet spot, Buchholz said, is companies with 100 users. That’s where he wants to focus for now but “we do intend to go upstream.” He acknowledges that ExpenseBot doesn’t yet do what some larger clients and some industries need. It’s not Sunshine Act-compliant, for example.
Although Concur is clearly the biggest, the expense management market has dozens of competitors. These range in sophistication from the one-off app for personal budgets up to large enterprise providers including Oracle, Coupa and Chrome River.
Acquis Consulting CEO and managing partner David Kaufman hadn’t heard of ExpenseBot and said they seem “very small.”
“I like their messaging and the concept of the bot and the AI,” he said. “It’s great that a lot of entrepreneurs are building things and it’s good for the industry, but as an organization you want to be on the leading edge, not so much the bleeding edge. Even for midsize companies, you want to know the provider’s software is for real and works well and has been tested. More and more, IT plays a role even in smaller companies in asking, ‘Is there a risk here?’ People are storing confidential data — who they’re meeting with, the business purpose. I don’t know how secure they are but as a company, I’d want that level of comfort.”
Those are understandable concerns that ExpenseBot’s team can address, Buchholz said.
He is an admirer of Expensify. “Some people prefer our interface,” he said. “I like theirs. So I say it’s like BMW and Audi. But our sales and support team is second to none. We pick up the phone when people call. Support is near real-time. I view it as a cultural differentiator for us.”
ExpenseBot started a TMC partnership program in January, evidently investigating the integration of travel and expense. Buchholz said the company is “talking in-depth with multiple partners on the travel side to do cool things with itineraries.”