Expense management for multi-entity organisations: What you need to consider

Managing expense reports in one company is one thing. Doing it across a group with ten, twenty or a hundred companies in several countries is something else entirely. Yet many organisations choose systems that aren't built for that complexity, and they pay the price in manual work, inconsistent compliance and frustrating administration. This article covers what matters when choosing an expense management system for a multi-entity organisation.

Scalability has to be built in from the start

The most common mistake is choosing a system that works well for a single company and then trying to scale it up to a group, which rarely ends well. A system built for scale thinks differently, right down to its data model.

Templates are one concrete example. In a well-built system, you can work with templates applied at different levels: globally for the entire group, perhaps for a region such as the Nordics or DACH, and locally at company level for whatever needs to differ. When you change an account number that applies to the whole group, you do it once and the change takes effect everywhere.

Just as important is the ability to make changes that cut across other dimensions than the company structure. Say a group of employees across several companies is covered by the same collective agreement but not necessarily the same region, and they need to be treated consistently. The system should support that without you having to configure each company separately.

Permissions, visibility and shared service centers

In a group, it’s rarely the case that everyone should be able to see everything. A financial controller at the Swedish company might need full visibility into Sweden but limited visibility into other markets. And a shared service center handling payroll and expense reports for several companies needs a different permission structure than a local finance function, for example.

Ask the vendor how they structure permissions in relation to companies. Can we have different shared service centers with visibility into different parts of the group? Can an approver see and handle expenses relating to several companies in a single flow?

These are details that are easy to overlook in a demo, but they determine whether administration is manageable in practice.

Global and local at the same time

One of the hardest balancing acts in a multinational group is keeping together what should be uniform without forcing every company into exactly the same solution.

Some things should be global, such as overarching policies, group-wide approval flows and reporting up through the organisation. Other things have to be local: SSO solutions may need to differ between companies, ERP integrations can vary depending on which system each market uses, and local tax rules require local configuration.

A well-built system handles both without one undermining the other. What’s global takes effect globally, and what’s local can deviate without breaking the whole.

Tax handling in every country, not just “we support that country”

For a group operating in several countries, tax handling is one of the most critical issues. Asking a vendor whether their expense system supports a particular country rarely gives a meaningful answer. The answer is almost always yes; what’s interesting is how.

How is VAT splitting handled in Norway, for example? How is per diem calculated in a country where the vendor doesn’t have a ready-made model? How are entertainment expenses handled in Sweden versus Germany? A vendor that handles tax by requiring the employee to remember a particular click sequence, or by having the finance department set up a workaround, doesn’t actually support the rule. They delegate the problem. Automation should go all the way, not stop halfway.

Involve representatives from your local markets in the procurement process. They know which scenarios are critical for them and will ask questions you would never have thought of yourselves.

AI is changing what administration in a group can look like

Administering an expense management system in a large group has traditionally required dedicated resources, and sometimes external consultants for every change. That’s no longer the case.

With systems that accept instructions in plain language, an administrator can describe what should happen and the system carries it out. For example: “Change the account number for taxis in all companies to X” or “Add Sara as an assistant for everyone in company Y.” This changes who can administer the system and how quickly changes can be made, without every adjustment requiring a consultant or a developer.

Questions to ask every vendor

  1. How is the system built to handle a group structure with many companies? Is there a clear template concept?
  2. How do we make a change that applies to the entire group versus one that applies to just one company?
  3. Can we have different SSO solutions and ERP integrations for different companies within the same installation?
  4. How do we set up permissions for shared service centers with visibility into several companies?
  5. How is tax handled in the countries we operate in? Discuss concrete scenarios