Business expense accounts may sound glamorous, but for most frequent travelers they’re more of a hassle than anything. Sure, there’s always the novelty of being able to go out to to dinner on the company’s dime, but this wears thin after a few days of stuffing your wallet full of receipts.
Expensify, the startup that took second place at TC50’s DemoPit, is hoping to ameliorate these issues as much as possible by keeping track of your expenses for you. CEO David Barrett says that while solutions exist for the top 3% of businesses - namely large companies with hundreds or thousands of employees - the remaining 25 million American businesses are left to fend for themselves with paper receipts and annoying Excel spreadsheets. The site launched this week, and is offering the service for free (you won’t have to pay its 3% surcharge) to the first 1000 users who sign up here.
To use Expensify, you first sign up for an “electronic payment card” - essentially an Expensify-branded MasterCard that is linked to your original credit card. This electronic payment card is acting as a middle man, tabulating all of your purchases on the road and immediately charging your original credit card for whatever you spent (you don’t lose out on your frequent flier miles, and you don’t get an extra monthly bill).
Expensify allows you to submit photographs of your receipts as you get them, which are automatically attached to the corresponding purchase in your account history (assuming your business will accept a photo in lieu of the physical receipt). You can submit photos using either a native iPhone application or using a dedicated Email address from any camera phone.
After logging onto Expensify’s website, you can browse through your purchases, categorizing and labeling them for future reference. Once the trip is concluded, the site will use this list to generate a PDF list of expenses for your company, which can optionally be emailed, imported into Excel, or printed. If you choose to submit the record online, your manager will have the option of paying for your expenses immediately using a credit card or bank information, and Expensify will reimburse your original credit card immediately.
To generate revenue, Expensify tacks on a 3% surcharge to all items purchased with the electronic payment card. This sounds a little steep to me for what it does - you’re still required to photograph your receipts, and the online interface isn’t that much better than the ones seen on most banking websites. But Barrett says that the service easily pays for itself by saving hours of times lost tabulating these expenses, and the site already has a number of customers chomping at the bit. This is a huge market, provided Expensify can find the ideal price point and can convince users to add yet one more card to their wallets.
Another service in the receipt/expense account space is Shoeboxed, which scans in any receipts its users submit through snail-mail for easy management online.
GO BLUE!!!!
Be careful with this. Barrett’s wording: “That’s right, from this moment on, the next 1000 users who sign up will get $1000 in free purchases” has the potential to confuse. What this really means is that if you are one of the first to sign up, you save $30. You save the 3% fee on each purchase (up to $1,000).
I’m not saying it’s bad to save $30, but it’s important to understand that this card is a surcharge card that adds a 3% fee to every purchase you make in exchange for their service (which might be excellent).
Yeah good point, I’ll clarify that.
When these guys add a subscription version that lets you use your own credit card (and avoid the 3% fees), they will stand a better chance at success.
The example above shows $9,356.00 in purchases.
Ironcally, the $356.00 is almost the amount that goes to Expensify.
That will add up.
Even with the 3% fees this service sound nice and very convenient, especially for small companies where you don’t want to spend too much time sorting through your receipts.
I signed up though and of course, the service is not available to international users at the moment
As soon as it becomes, i’ll gonna be one of the first to use it. I’d certainly give them a try.
On top of losing 3%, I would also imagine that you miss out on double miles / points on items such as groceries, gas, air travel, etc, taht is offered by many credit cards these days.
Makes no sense for me because its an extra fee i have to pay, in this case to Expensify, I’d rather get those portable scanners and scan the tickets everynight in case they get lost.
So then every charge you make will just show up as “expensify” on your real card. You loose the benefits of your original card. Say you have an Amex Gold, you suddenly lose car rental discounts, double warranty, etc. How could ever reverse a charge, or even tell what it was on your Amex.
Nice idea, loses out on the details.
Good idea but the 3% does add up and is a turn off — especially if you are a small business where every penny does count. Charging the customer an extra 3% to cover my travel and food expenses when i do a project will cut into my margin and doesn’t seem worth it. For the sake of expense reports, I’d go with shoebox and pay a set monthly fee each month instead of with each purchase. I think the money is better spent elsewhere.
As a little guy, I already have a dedicated business expense card. It generates cash back and everything.. no annual fee either.
But 3% for this?? dumb
some small business will see it very well
why would i use this? i just throw a fistful of receipts at my assistant every morning when i get to the office and let him work it out.
lol
he prolly makes even less than 3% of your expenses, too!
So the card issuing bank (and Mastercard or Visa) is going to charge the merchant about 2% in processing and interchange fees on the other side of the transaction and then Expensify is going to charge me 3% on top of any interest or fees I already pay?
Seems like for .25% or so Visa or Mastercard could easily do this if this takes off even a little bit.
i agree, if this makes it big, then visa/mc will just do it themselves, for far less than that astronomical 3%. crap model and its just a prepaid card in a different guise. Expensify, go back to school
The site states the following: “This way you keep earning frequent flier miles on your regular card, and don’t get a new monthly bill to worry about. ” .. so it doesn’t sound like you lose out on the benefits that come with using various other cards.
My cards give different benefits for purchases from different merchants.
For example, one card has a 5% rebate on gas and groceries and 1% everywhere else while another card has a 2% rebate for airlines and hotel purchases and 1% everywhere else.
If expensify only handles one card or is an “everywhere else” purchase, it costs more than 3%.
It’s a prepay card you sign up for. It’s no way “linked” to your credit card. You pay up front, get a card in the mail and start using it.
This is pure bait & switch. They use “linked to your credit card” in promotional materials, but the terms clearly say this new card is “not connected in any way to any other account you may have”.
https://expensify.com/terms
“The Card is a prepaid card. The Card allows you to access funds you place on the Card. The Card does not constitute a checking, savings or other bank account and is not connected in any way to any other account you may have. The Card is not a credit card. You will not receive any interest on your funds on the Card.”
Hi there, this is David from Expensify. Thanks for all the great comments!
As for the 3%, don’t forget that it’s 0% for the first $1000 if you sign up today — I’d recommend getting a card and giving it a shot. Once you’ve used it I think you’ll agree the value it brings is far greater than the its small price: not only do we directly save you money by getting you paid back more and paid back faster, we do it with far less time than paper reports.
As for dollars saved, if we can just capture 1 in 33 of those receipts you typically lose before filing your expense report, we pay for ourselves. If we can get you paid back before you pay any finance charges on your credit card, we pay for ourselves. If it normally takes you an hour to file $1000 in expenses takes (and if your time is worth more than $30/hr), again, we pay for ourselves. And if we do all three? It can start to really add up.
But at TechCrunch 50 we talked with hundreds of people who had opinions all over the spectrum, and the major takeaway was that the more expense reports a person files, the more willing they are to pay the 3%. The dollar savings are interesting, but what people are really excited about is the *time* savings.
People who truly hate expense reports hate it not only because it takes so much time, but because that time is so painfully spent. Expensify can save you money, yes. But its primary purpose is saving you time.
Anyway, I invite you again to sign up today and get a card and try it out for the first $1000 with 0% surcharge. I’m pretty confident that you’ll love it and stick with it!
-david
“thanks for the great comments” wtf?!?! everyone is tearing u down man, are you so blind to the obvious, well…. yeah u must be because ur 3% surcharge for a prepaid card is daylight robbery. send them to shoeboxed.com, much cheaper and they do the leg work for you at a fixed price.
it’s called being diplomatic, but you don’t seem to know much about that.
Conference fee: $250, flight: $300, hotel: $300, food: $100, car: $200 = $1,150
If you really need this service, I could easily see the $1,000 cap just being an inconvenience.
To clarify, the card budget only sets the size of any individual purchase — you can make as many back to back purchases as you like so long as each purchase is within the card budget. (One caveat: we’re considering a daily limit for the next few weeks just while we ramp up, but after that there will be no daily limit.)
You have got to be kidding me - 3% - what am I missing here? If you have time to scan your receipt and email it to this company you clearly have time to stick your receipts in an envelope and print off the monthly statement from American Express. American express will let you sort, categorize and manipulate your expense data any way you want. You can even download a file from American Express that can be imported into many financial reporting systems. And they don’t charge you for these additional services. So for several thousand dollars a year (3%) just stick the receipts in your briefcase and print your amex statement.
Try telling your boss that you are submitting an expense for 3% of all your purchases then multiply that by the number of people in your company. I am guessing your manager or CFO will tell you to get better organized and keep track of your receipts.
Highly unlikely that that fee structure will work. Increasing a company’s T&E costs by 3% is counter to company interest and will likely not pass muster with reimbursement policies.
Two points:
1. I’d like to hear more about whether this is somehow “linked” to your normal card, and exactly how that works. Do all the charges on the normal card show up as “expensify”? If it’s not linked, is it just a prepaid card? Seems a little suspect to me.
2. 3% is absolutely ridiculous for this “service”. They’re not offering much beyond what’s offered by a lot of other expense tracking and management services out there, including some iPhone apps. Additionally, depending on the answer to #1, there could be some real disadvantages as well.
Hi Ryan, thanks for the question! Yes, when you make a purchase with the Expensify card the purchase is billed back to your regular card. Also, yes, we use a prepaid card as the underlying platform. All this is spelled out in our help page:
https://expensify.com/help#budget
As for how it shows up on your credit card bill, the goal is to have the original purchase name with an Expensify prefix. That feature is under development, however, and at this moment it comes up with an Expensify name.
As for competition, I guess I’d like to see which names you have in mind. I think Shoeboxed is a valid competitor, but while I agree there are tons of expense management solutions out there, virtually all of them require that you manually type in your purchases, and manually collate your paper receipts. In other words, they are exactly the systems that people hate to use.
With Expensify, you never need to type in credit card purchases, and never need to sort paper receipts. The point is to get rid of all the manual tedium and let you get back to work.
Actually Shoeboxed enters in all the data for your receipts and makes them sortable. That’s kind of the whole point of what they do.
This is ridiculous. Why can’t you just use quickbooks with whatever credit card you have? That’s what our accountant does, and it’s much cheaper.
Hah, I like to say “The best way to manage expenses is to have someone else do it. For everyone else, there’s Expensify.” That said, unless you have *really* nice friends, usually that someone else costs money, and often they cost more than Expensify.
I had a similar discussion with an attendee at the TechCrunch 50, essentially starting with “That’s ridiculous, I just have my bookkkeeper do it.” But after a bit of thought he realized that his bookkeeper cost about 6% overhead for each expense report — double what Expensify would charge.
The way i understood it you dont loose the benefits - the charges still go through your card + the %age fee seems pretty reasonably to me to actually get rid of the hassle this system takes out. Its a major nightmare processing expense claims (and getting other people to do it right) and likely costs a lot more than you think. If you don’t have an admin person to take care of this (how much does that cost?) having all your expenses catalogued automatically is worth a lot of sanity.
As to if its worth 3%, don’t know - maybe the price will adjust over time or there will be volume discounts etc. - I’m sure they can make it competitive. I wouldn’t hesitate to use it if the price worked out ok and it was available in Europe. Banks generally very poor at providing this kind of value add - nice to see someone trying to coming up with an innovative service!
steve.
So, when it’s a real credit card you get things like Rental car insurance coverage etc etc, since this is a pre-paid debit card, does this mean you will no longer be covered by these perks you get on traditional cards ?
If not, then it’s worthless, the most common expense people have is Rental Car and insurance is no small amount.
I just signed up to take advantage of the offer. I’m horrible at keeping track of receipts, and it can have a bottom line impact, especially if you’re trying to keep your financials audited.
One comment/question to David Barrett though; I can’t help but feel this would be more attractive for us business owners if the card was tied into some sort of rewards program. I think the Amex Plumb card is a tremendously good idea. Not to be too invasive into your business model, but is there not a way to offer something while still making a profit? I know credit card programs are big business for airlines and other businesses.
This is absolutely, without a doubt, the biggest rip-off I’ve ever seen. Actually, I guess we should say it’s pure genius. If they can get enough stupid people to sign up for this that they can make a living, then more power to them.
3% fee, and the hassle of scanning in receipts and emailing them makes this the biggest joke. It’s more work than just tossing receipts in a box and manually sorting them.
The price is just too high. I hope the banks will catch up to them and introduce their own software..
Wow, what’s with all the haters on this thread? Are some of you bitter because you’re losing money in the market? Turn that frown upside down, guys…. This is actually a pretty useful service, or it wouldn’t have been voted for by tons of people at the conference (and win runner up at the demo pit)
Let’s first start with the founders. I was at tc50 walking around in the Demo Pit and David was one of the few sincere passionate guys talking through his vision for expensify without bloviating or sounding like an empty PR schpiel.
Second, it’s a really sound business model, and it passes the “pain killer- not vitamin” test for most people. For those of you who have people who do your expense reports, I guarantee you that you’re probably paying more than the 3%. And those of you who are cribbing about that 3% are either paying way too much to take your clients to fancy meals (when you can’t actually afford them), or just not the right customer.
From how the service works, it appears that you still can use your rewards program for the different cards (I could be mistaken). At the end of the day, it’s a startup. Even if that feature is currently missing, I don’t think it would take long to tie it to an existing rewards program.
Great work guys, I look forward to seeing the next iterations and start using this thing soon!
Yeah thanks for that expensify employee #3.
Look, the fact is, 1) its overpriced and difficult to tell ur boss that ur expenses have just gone up by 3% because ur a lazy son of a gun, and 2) will be killed off by visa/mc own built in offering if it gets big. So what’s ur biz plan, stay small enough so that visa/mc doesn’t notice us?
Go home guys
i’m not am employee. click on my name if you want proof. i’m in chicago, expensify’s in san fran. i just found out abt it literally a week ago.
….in fact, are YOU an employee of visa or mastercard? i wouldn’t be surprised if you were in biz dev at one of these companies and kicking yourself in the ass for not thinking of the idea.
or is your startup in super duper “stealth” mode and are you trying to do the same thing? sorry man!
it’s one thing to offer some inspiration or suggestions to make a business better, it’s completely another to tell people who’ve worked tireless hours on something to “Go home guys”.
grow up.
What’s up with the hostile response? Feel free to relax a bit, we’re all friends here.
Amex has a crude version of this already included for free. All they need to do is come out with a friendlier version 2 and they will have everything expensify does but without a surcharge.
These guys need to partner with (or be acquired by) a bank and give this service away for free. The money should be made off the back end of the card, not a surcharge for purchases.
I’m all about the modern paperless office, but can’t fathom why in this economy, a company would increase their expenses by 3% to not have to deal with receipts. I love the concept, but the revenue model just doesn’t make any sense.
guess what expensify…90% of people working today have an automated/web-based expense system they are required to use. are you going to go to my office and log into it for me? STUPID
Are you guys like 12? What’s the point of all the name calling?
the 3% covers the interchange fees you have to pay in the conversion process to reintroduce the same expenses back to the “home” card, plus gives you about 1.2% profit, correct?
Personally, I’ve never had to fill out an expense report so I can’t relate, but I think the model could work if the process is as burdensome as it’s described.
Best of luck to you. And I hope you are able to use all the nonsense on this board as motivation.
I’m always getting a bit suspicious when the company executives decides to defend the business in the techcrunch comment field. What are they hiding? If you believe in your model: ignore all stupid comments, work hard and show them whos daddy.
Errr, I think that’s called being responsive. I applaud the man for taking time out of his schedule to address each legitimate concern individually. He isn’t defending it nor hiding anything - simply responding to concerns that some of the readers have.
The worst part of this is the double transaction they’re engineering for credit card companies and banks, who already make a fortune out of merchants and consumers. You’ll now have 2 card transactions for every purchase, with small companies picking up the tab.
They’ve managed to think of a way to get all business transactions through their own frequent flyer programme or the like, and most likely have negotiated another percentile or 2 from MC or the acquiring bank for duplicating all transactions.
This should be against the law as you should not be allowed to process the transaction twice, it’s clearly a manipulation of a financial structure and the businesses who will foot the double bill.
I some how doubt the people who thought this up ever dealt with small business accounting people who would never pay a 3% surcharge for a service that requires so much manual intervention by a user. Taking pictures of receipts? You have to be kidding. And doesn’t Am-Ex offer a business card that does all this and more?
There is no way our business would use this even at .5%. Too labor intensive.
It’s just so dumb. It takes a couple of hours to organise a second credit card which you could use solely for business.
This is the most over-engineered solution to a non-existent problem I’ve ever seen.
@David Barratt - How many of your employees does it take to screw in a light bulb?
You might also want to check out Exgis Expense, I’m loving it on my Blackberry.
http://www.exgis.com
I don’t really see how this helps in any way shape or form? I have a separate Amex card for business, and I can get all those expenses online? Does taking pictures of them first make it easier to keep track of receipts?
Not to mention, you could pull this data in via Mint.com or Wesabe without having to do the stupid credit card trick?
What extra benefit do I get from this?
https://www.shoeboxed.com/
http://xpenser.com/
Not to mention this doesn’t track your cash expenses, which is really what causes the most problems.
@Jason Nielubowicz that http://www.exgis.com looks kinda clunky. What does it do for you?
Just had a look at Shoeboxed. Nice product.
Looks like the CEO’s (Taylor) previous project, which he claims is Germany’s biggest website, is a facebook clone. Nice.
(http://www.studivz.net/)
At least he’s doing something a little more original now.
My favorite company from the demopit. Very nice guys with a very useful product. Hopefully with adoption the % fee will go down.
@Andrew - there’s nothing useful about it. It’s more admin than you would currently have.
Amex Plum has some interesting benefits for small businesses as well. Worth a look. I like this, but not sure if 3% is really worth it for me organize receipts. I may be regretting this if my company gets audited though :/
What a fantastic idea. I can’t tell how often i loose expenses reciepts. I hate hate hate doing my expenses.
Has anyone actually got their card, or has the guy run off with our SS #’s?