Travel expense reporting made easy

The start-up Circula wants to set the new standard in travel and expense management. Can it succeed?

If you ask Nikolai Skatchov what problem he solves with his start-up Circula, the first thing you get is a deep "hmmm". The founder sits in front of his unfolded laptop in Berlin, takes his time, thinks about how best to explain his idea, then he lays it out: "We take the headache away from employees and also from employees in financial accounting."

They haven't developed a new miracle pill at Circula, though. The startup believes much more that they've found a simple solution when it comes to handling employee expenses, such as travel.

Only, can it even get through to companies in these days of Corona? The German Travel Management Association (VDR) sounded the alarm as recently as November. The number of business trips continues to decrease. Circular has nevertheless recently managed, according to its own information, to win new customers. The biggest challenge for the start-up is another: It's far from the only software provider for processing employee expenses.

For a long time, accounting for travel expenses meant employees had to fill out slips of paper themselves, paste in receipts and tickets, and then send it all to the department responsible for processing it further. The department, in turn, had to enter everything into their system, possibly charging employees for portions that they would be reimbursed for. That was annoying for both sides and meant for example for frequent travelers gladly once several hours of work.

In the meantime, there are various programs that are supposed to facilitate exactly that. Photographing the bill once with your mobile phone and forwarding it directly via an app is what modern solutions look like today. And it is precisely in this field that Circula has been involved for a good three and a half years.

"When I was still working at Finleap, a startup incubator in Berlin, we had pretty old-fashioned software for expenses and accounting, for example," Skatchov says. "Then, as soon as we also had to deal with tax issues when it came to expense reporting, we were annoyed and liked to put it off once in a while." For Skatchov, who had always wanted to start something of his own, that was reason enough. Together with his then-work colleague Roman Leicht, he built Circula.

"The billing software sector is currently in the middle of a generational change," he says. This still means: "Either you have taken into account the German tax law as a software provider, but then the program is usually very confusing and cumbersome to use - or there is a program from the U.S., which is very automated, but then just not adapted to the German tax law." Skatchov wants both in one app: an automated process that is adapted to German tax law.

For traveling employees, Circula is an app in the process. Among other things, they can use it to scan receipts and have them read automatically, forward PDF invoices, or import the list of hospitality guests directly from the calendar. Supervisors can then - either via the app or on the computer - for example approve the expenses submitted or evaluate the costs by using the filter and search function. Accountants are then sent the data. They can, for example, configure their expense report individually and have the option of displaying duplicates of invoices that have been submitted twice by mistake.

But with SAP Concur, for example, there is already a similar solution, and that from an established provider. It even integrates travel booking. Large customers such as Bayer, IBM or Zalando trust according to the web page of SAP Concur in this software. So is Circula too late with this after all?

"Our software is used today by many start-ups up to corporations - but most of our customers could be classified as medium-sized businesses in terms of their size," says Skatchov. For them, he wants to offer a more customized solution than the one from the big competitor. To illustrate this, Skatchov calls up a graphic on his laptop and splits the screen. It shows the companies in Germany according to their number of employees. According to the chart, companies with more than 10,000 employees account for a good five million employees, but there are also just over seven million employees at companies ranging in size from 1,000 to 10,000 employees. "That's the segment that operates internationally, but for which a flagship like SAP Concur doesn't fit in some cases," says Skatchov. And that's where he wants to go. To offer the right solution for all of them. Initially only for companies in Germany, but in the future also in other European countries, as Skatchov says. With his approach, he has already been able to win N26, AXA or the BDI as customers.

An argument with which the founder wants to score: the IT service provider for tax consultants, auditors and lawyers DATEV has recently entered into a strategic partnership with Circula. In October, the magazine of the IT service provider recommended to use Skatchov's start-up for the accounting of expenses and travel costs. The next step on the way to becoming a major software provider has thus been taken.