How to automate your expense approval process and cut costs

The expense approval process is a structured way organizations review, validate, and authorize business expenses before payment. It typically involves employees submitting expense requests, which then move through designated approval channels where managers or finance personnel evaluate the requests against established policies before granting approval for reimbursement or payment.

Effective financial management hinges on a robust expense approval process. When organizations implement clear approval workflows, they gain real-time visibility into spending patterns, which helps prevent unauthorized purchases and excessive spending. For example, a marketing team requesting funds for a campaign must receive proper authorization before committing to vendor contracts, ensuring the expense aligns with the company's goals.

Expense approval plays an important role in budget management by creating a direct connection between planned allocations and actual employee spending. Each approval decision is an opportunity to compare the requested expense against budgetary guidelines. Consider a manufacturing company that allocates $50,000 quarterly for equipment maintenance. The approval process should ensure these funds are used as intended and alerts management when maintenance costs approach or exceed the budgeted amount. This ongoing check helps teams stay within financial boundaries while providing early warning signals when budgets need adjustment.

A successful expense management strategy requires a carefully structured workflow from submission to payment. Let's examine each stage of the process to identify optimization opportunities.

Step 1: Expense submission

The expense approval journey begins when an employee submits a request for reimbursement or payment authorization. Typically, all employees from entry-level staff to executives can submit expenses, though the expense report approval requirements may vary based on position and expense amount. Common submissions include travel expenses such as flights, hotels, and meals; office supplies and equipment; client entertainment costs; and professional development investments like courses or conference fees.

Every submission must include proper documentation to meet IRS requirements. Organizations generally require original receipts for purchases above a minimum threshold, often $25, along with details about the business purpose of each expense. Many companies now utilize expense management software where employees can upload photos of receipts directly from their smartphones, streamlining the submission process.

Step 2: Initial review

Once submitted, expenses undergo a preliminary review, usually by the employee's immediate supervisor or a designated member of the finance team. This initial assessment focuses on basic accuracy and completeness. Reviewers check that all required fields are completed, receipts are attached, expense categories are correctly assigned, and basic policy guidelines are followed.

This stage acts as a filter, catching obvious errors before the request moves further in the approval chain. For example, a reviewer might notice missing documentation for a large purchase or an incorrectly categorized expense. This initial screening saves time for higher-level approvers and provides immediate feedback to employees about submission requirements.

Step 3: Compliance check

The third stage involves a thorough examination of how each expense aligns with established company policies. This review might be conducted by compliance specialists, finance team members, or automated through rules-based expense management software. The focus shifts from basic completeness to substantive policy adherence.

During this phase, reviewers look for potential red flags like unusually high costs for standard items, splitting purchases to stay under approval thresholds, or expenses that fall outside acceptable business activities. For instance, a $300 dinner for two people might trigger additional scrutiny in organizations with meal expense caps. Similarly, first-class travel requests would be flagged if company policy specifies economy-class travel as the standard.

Step 4: Managerial or departmental approval

With basic compliance established, expenses move to manager approval. Most organizations structure their approval hierarchies based on expense amount and department. Small expenses might require only direct supervisor approval, while larger amounts trigger multi-level review requirements. For example, a $250 expense might need only team leader approval, while a $5,000 expense could require director or VP-level authorization.

This stage also includes the escalation process for exceptions. When requests exceed standard thresholds or fall outside typical categories, they often require additional justification and higher-level approval. For example, an unusually large client entertainment expense might need approval from both the department head and a C-suite executive, regardless of whether it falls within departmental budget limits.

Step 5: Final finance team approval

After receiving managerial sign-off, expenses undergo financial validation. The finance team verifies that there’s appropriate budget for the expense and confirms proper accounting classification. This ensures expenses are assigned to the correct cost centers, departments, and general ledger accounts for accurate financial reporting.

The finance review also sets reimbursement timelines. Many organizations establish standard processing windows, such as weekly payment runs or monthly reimbursement cycles. Employees typically receive notification when their expense reports pass this final approval stage, including information about when and how they can expect reimbursement.

Step 6: Payment processing

The final step involves actual payment disbursement. Organizations use various reimbursement methods, including direct deposit to employee bank accounts, additions to payroll, physical checks, or adjustments to corporate credit card accounts. The choice of method often depends on the frequency and volume of expenses, as well as the organization's existing financial infrastructure.

Beyond simple payment, this stage also encompasses expense tracking and reporting. Finance teams categorize and analyze expense data to monitor spending trends, identify potential cost-saving opportunities, and ensure budget adherence. These insights feed into financial planning processes, helping organizations refine policies and allocate resources more effectively in future budgeting cycles.

A well-executed payment processing software provides clear transaction records for both employees and the organization. This transparency helps maintain trust in the expense process while creating the documentation trail needed for tax purposes and potential audits.

Knowing how to track business expenses impacts efficiency and accuracy. The tools and techniques organizations use to monitor spending significantly impact efficiency and accuracy. Organizations employ various approaches, each with distinct advantages and limitations.

Manual tracking methods

Traditional expense tracking relies on physical documentation and manual processing through paper forms with attached receipts or spreadsheet templates created in programs like Microsoft Excel or Google Sheets. While widely accessible and requiring minimal technical knowledge, these methods suffer from significant drawbacks including calculation errors, missing documentation, and lengthy processing times. Manual processes make policy enforcement inconsistent and create challenges in generating accurate spending reports or identifying expense patterns. As organizations grow, the limitations of these approaches become increasingly apparent, with finance teams spending excessive time on data entry rather than analysis.

Automated tracking solutions

Modern automated expense management tools can automate the entire expense process from receipt capture through expense reimbursement, dramatically reducing manual effort and human error. These tools use mobile apps with OCR technology to extract receipt data, automatically flag policy violations, and route approvals based on predefined rules without manual intervention. The resulting benefits include real-time spending visibility, faster reimbursement cycles, and seamless integration with accounting software for clean audit trails. Many solutions also offer analytics dashboards that help finance teams identify spending patterns and opportunities for cost reduction that would remain hidden in manual processes.

Even well-designed expense procedures encounter obstacles that can frustrate employees and burden finance teams. Here are the most frequent issues organizations face and how modern solutions like Brex address them.

Delayed reimbursements

Employees often wait weeks or even months to receive expense reimbursements due to bottlenecks in approval workflows, causing financial strain and diminishing workplace satisfaction. These delays typically stem from manual processing steps, approver unavailability, or batched payment schedules that postpone settlements until specific calendar dates.

How to eliminate delays in expense reimbursements

Brex eliminates these delays through automated approval routing, instant notifications to approvers, and real-time digital payments that can transfer funds to employees immediately after final approval.

Policy non-compliance

Organizations struggle to ensure employees follow expense policies consistently, especially when those policies are complex or difficult to access during the purchase decision. Without immediate feedback, employees may repeatedly submit non-compliant expenses, creating friction with finance teams and wasting administrative resources.

How to ensure employees follow expense policies

Brex addresses this challenge through integrated policy controls that alert employees to potential violations before submission and allow companies to set hard spending limits on corporate cards, preventing out-of-policy purchases entirely.

Receipt management

Missing or illegible receipts represent one of the most common roadblocks in expense processing, often resulting in approval delays or even reimbursement denials. Paper receipts are easily lost or damaged, while digital receipts may be scattered across email accounts or download folders, making organization challenging.

How to streamline receipt management for faster approvals

Brex provides mobile receipt capture technology that lets employees photograph receipts immediately after purchase, automatically matching them to card transactions and storing them securely in the cloud for easy retrieval during audits.

Approval bottlenecks

When approvers are unavailable or overwhelmed with requests, the entire process stalls, creating backlogs that can take weeks to resolve. These bottlenecks often occur at month-end or during busy travel seasons when expense volume spikes.

How to prevent approval bottlenecks and speed up processing

Brex prevents these logjams through intelligent approval routing that includes automated escalations, delegation options for approvers on leave, and parallel approval paths that allow multiple reviewers to work simultaneously rather than sequentially.

Expense fraud

Organizations lose significant funds to deliberate expense fraud, including duplicate submissions, inflated amounts, and personal purchases disguised as business expenses. Detection typically requires manual review of each expense, which becomes increasingly difficult as transaction volumes grow.

How to detect and prevent expense fraud effectively

Brex counters fraud through automated duplicate detection, machine learning algorithms that flag unusual spending patterns, and integration with corporate travel and expense management software to automatically verify travel expense claims against actual itineraries.

Budget visibility

Finance teams often struggle to track actual spending against budgets in real time, leading to overruns that aren't discovered until month-end closing. Without current data, managers make spending decisions without knowing their true remaining budget.

How to track budget spend in real-time

Brex provides continuous budget tracking that updates instantly with each new expense, displaying real-time department and project spending through intuitive dashboards that help managers make informed decisions about resource allocation.

Currency conversion

International expenses introduce complexity through currency conversion, fluctuating exchange rates, and foreign transaction fees that complicate both submission and accounting. Employees may calculate conversions incorrectly, while finance teams struggle to verify the accuracy of claimed amounts.

How to automatically convert currency at competitive rates

Brex simplifies international expenses through automatic currency conversion at competitive exchange rates, clear display of both original and converted amounts, and detailed transaction records that include the exact exchange rates applied for clear accounting transparency.

Disconnected expense tools

Many organizations use disconnected tools for expense management, accounting, and payment processing, requiring manual data transfer between platforms that introduces errors and delays. These integration gaps often cause duplicate entries, expense reconciliation problems, and incomplete audit trails.

How to keep your expense management data integrated

Brex eliminates these issues through seamless integration with major accounting software solutions, HRIS platforms, and travel management solutions, enabling automated data synchronization that maintains consistency across all the financial software you use.

Expense categorization

Incorrect expense categorization creates accounting headaches, tax compliance risks, and inaccurate financial reporting that can misrepresent company performance. Employees often select categories hastily or incorrectly, requiring finance teams to manually reclassify expenses before closing periods.

How to automatically categorize expenses

Brex addresses this challenge through AI-powered categorization that automatically suggests the appropriate expense type based on vendor, amount, and transaction patterns, dramatically improving accuracy while reducing the need for manual corrections.

Each of these challenges represents an opportunity for organizations to improve their financial operations. By implementing solutions like Brex, companies can transform expense management from an administrative burden into a strategic advantage.

Implementing automated expense tracking delivers tangible advantages that impact both daily operations and strategic financial management. Organizations that make this transition experience improvements across multiple business dimensions.

Time efficiency

Automated expense tracking dramatically reduces the hours spent processing expenses at every level of the organization. Employees save valuable time by avoiding manual data entry, searching for missing receipts, or following up on approval status. Finance teams eliminate the need to manually review each line item, chase missing documentation, or rekey data into accounting software. Managers receive pre-validated requests that require minimal scrutiny, with exceptions clearly flagged for attention.

Cost reduction

The financial benefits of automation extend far beyond simple processing efficiencies into meaningful cost savings. Direct expenses decrease by eliminating paper forms, physical storage requirements, and manual data entry costs. More significantly, automated tracking prevents duplicate payments, flags out-of-policy spending before it occurs, and provides visibility into negotiation opportunities with frequently used vendors. Enhanced analytics capabilities identify spending patterns and anomalies that would remain hidden in manual processes, allowing finance leaders to make targeted policy adjustments.

Improved compliance

Automated tracking transforms expense policy compliance from a retrospective review process to a proactive enforcement mechanism. The best expense management software allows you to incorporate policy guidelines directly into the submission workflow, alerting employees to potential violations before expenses are submitted. Approval routing automatically escalates higher-risk transactions for additional scrutiny based on amount, category, or other risk factors. Consistent enforcement across all departments eliminates perception of favoritism while maintaining complete audit trails that simplify external audits.

Enhanced visibility

Perhaps the most strategic benefit comes from the clear financial visibility that automated tracking provides. Real-time dashboards show current spending against budgets, eliminating month-end surprises and enabling proactive management interventions. Detailed analytics reveal spending patterns across departments, projects, business expense categories, and time periods, highlighting opportunities for policy refinement or vendor consolidation. This enhanced visibility supports more agile and informed business decisions while giving employees transparency into their own spending patterns and reimbursement status.

Organizations transition to Brex through a practical implementation path that starts with replacing traditional payment methods. Smart corporate cards become the foundation of the expense ecosystem, capturing transaction data automatically while allowing finance teams to set customized spending limits that reflect company policies. This shift eliminates the need for employees to front personal funds for business expenses and reduces the dependence on reimbursements.

The Brex mobile app transforms how employees interact with the expense process daily. Rather than saving receipts and completing expense reports later, team members simply snap photos when purchases occur. The app's AI technology extracts merchant names, dates, amounts, and even itemized details, then matches this information with card transactions automatically. Managers review these pre-categorized expenses through email or mobile notifications, making decisions quickly without interrupting their workflow.

Data flows seamlessly between Brex and popular accounting platforms, eliminating manual exports, spreadsheet manipulations, and duplicate entries that plague traditional processes. Approved expenses appear in the general ledger with proper coding, supporting documentation, and clear audit trails attached. This integration creates a single source of financial truth where expense data moves efficiently from purchase to accounting records without human intervention, dramatically reducing errors while ensuring consistent financial reporting.

Companies using Brex gain immediate access to spending analytics that transform expense data into actionable insights. Finance teams configure dashboards showing real-time budget utilization across departments, projects, or expense categories. These visualizations highlight spending trends, identify opportunities for vendor consolidation, and alert managers when budgets approach thresholds. This data-driven approach shifts expense management from processing transactions to informing strategic decisions that optimize resource allocation.

The expense approval process forms a critical foundation for financial control and operational efficiency in modern organizations. From initial submission through compliance checks, managerial approvals, and final payment, each step provides opportunities to validate spending against policies, maintain budget discipline, and gather valuable financial insights. As we've seen, traditional manual approaches create significant friction points that slow approvals, frustrate employees, and burden finance teams with administrative tasks rather than strategic analysis.

Automation transforms this essential business function from a necessary administrative burden into a powerful financial management tool. By eliminating manual data entry, streamlining approvals, proactively enforcing policy compliance, and providing real-time visibility into spending patterns, automated expense management drives organizational improvement. Companies that implement these solutions experience elevated efficiency, enhanced compliance, reduced processing costs, and more informed financial decision-making that directly impacts bottom-line results.

Brex stands at the forefront of this transformation with an integrated expense management solution that addresses challenges throughout the approval lifecycle. By combining intelligent corporate cards, mobile receipt capture, automated approval workflows, accounting integrations, and powerful analytics in a unified platform, Brex eliminates the disconnected tools and manual processes that plague traditional expense management.

Rafa Tihanyi, Sr. Director of Operations at Graphite, says: “Brex was the obvious choice for expense management solutions. As a fully remote team with people all over the US and the world, being able to easily track expenses, approve reimbursements, and create virtual cards has been a game-changer for our operations team.”

Ready to transform your expense approval process and streamline financial operations? Sign up for Brex today and experience the difference.