How to organize and keep track of every business expense

Business expenses are the costs you pay to run your company smoothly. They're essential line items that help keep your operations on track.

Types of business expenses include:

• Marketing expenses: costs for physical and digital ads, promotions, and brand-building
• Software subscriptions: monthly or annual licenses fees for your SaaS tools
• Personnel costs: salaries, wages, and benefits for your employees
• Office supplies: paper, pens, computers, and other daily essentials

Other common business expenses include:

• Travel expenses: costs for business trips, including flights, rental cars, and hotels
• Rent: monthly payments for an office or storefront
• Utilities: bills for electricity, water, and internet

Tracking business expenses helps you understand your net profit and overall financial health. Here are some of the main benefits of accurately tracking your business expenses.

Maintain financial records

Keep your books accurate and up-to-date so you can stay compliant with financial regulations. You’ll never know when the auditors will come to take a look at your books.

Track cash flow

Know exactly where your money goes. Without accurate, timely financial tracking, you risk not having the proper funds to run your business. For example, the following image shows $120,300.05 was spent in Q3. It also reveals that the amount was on-budget, in-policy, and pre-approved. It provides a quick but insightful look into where your dollars are going.

Maximize tax deductions

Tracking business expenses can help you identify deductible expenses easily. When you track expenses correctly (with transaction types, categories, amounts, etc.), you can run a report that lists all transactions that were made in tax-deductible categories. This helps you claim the full amount to reduce your taxable income and save money come tax time.

Make better financial decisions

Analyze your spending patterns. Insights into your expenses help you make smart financial choices based on which expenses have the biggest ROI so you can improve your bottom line.

Identify cost-saving opportunities

Spot areas where you can cut costs. Reviewing your spending shows you where you’re overspending so you can seek out cheaper alternatives. Or you might be able to cut duplicate or unused software tools altogether.

Improve budget planning

Create realistic budgets and develop an accurate operating budget. Expense reports help you evaluate spending against your current goals, set better future goals, and allocate resources more strategically.

Forecast expenses

Predict future costs. For example, if your tracker consistently shows that you spend $5,000 a week on project materials, you may be able to assume that next week’s project costs will be around the same amount.

How should you track your business expenses? It requires a combination of financial software and services, as well as robust recordkeeping and reporting. Technology can go a long way in making all of this easier, faster, and more accurate.

Step 1. Open a business bank account

Get a business bank account to keep your personal and business finances separate. Look for an account that offers checking for fast money movement, treasury for yield, and a vault to store and protect your non-operating cash. Having a separate business bank account makes tax reporting easier and boosts your professional credibility. Having a business bank account also helps you track business cash flow and keep clean financial records.

When opening an account, have these documents ready:

• Proof of business ownership
• Tax identification number
• Your business license

Step 2. Select a business credit card

Choose a business credit card for company purchases. A corporate card separates personal and business spending, making bookkeeping easier and more accurate. The Brex card typically offers qualified businesses high credit limits with no personal guarantees.

Here are examples of the types of expenses and cards you can manage with Brex:

• T&E cards: Enable travel expenses and ensure policy compliance with automated controls, receipts, and memos.
• Vendor cards: Designate spend limits for one-time or recurring vendor expenses — software subscriptions, advertising, shipping, etc. — and set expiration dates to avoid being overcharged.
• Purchase cards: Instantly issue purchase cards with per-transaction AP controls and PO-like approval workflows.
• Benefits cards: Set up recurring or one-time employee stipend cards with embedded policies — and only pay for what’s used.
• Fleet cards: Enable policies strictly for fuel, maintenance, and other auto expenses and easily track spend on your vehicle fleets.
• Or any type of card: Provision spend limits for any need, and your policy will be auto-applied with every Brex card swipe.

Corporate cards also significantly reduce the need for expense reimbursement, which can be a time-consuming process for both employees and the finance team. When employees use a company card instead of their personal funds, they don’t need to submit expense reports and wait for reimbursement.

However, in cases where expense reimbursement is necessary, having a clear corporate credit card policy and efficient system in place is incredibly important. Many expense management tools, including Brex, offer features to streamline the expense reimbursement process, making it easier for employees to submit claims and for finance teams to review and approve them quickly.

Pro tip: You can apply for a business credit card using your Employer Identification Number (EIN) instead of your SSN and build your business credit score. Other benefits of a business credit card with EIN only include protecting yourself against identity theft and potentially faster approval.

With a business credit card, you can:

• Maintain digital transaction records
• Earn rewards or cash back
• Simplify expense tracking

Step 3. Choose your software

Select accounting and expense management software you can count on.

Accounting software

Choose from popular accounting software, like QuickBooks or NetSuite. (Brex integrates seamlessly with these platforms so you can have a complete financial management system.)

Accounting software can help you automate invoicing, track expenses, and generate financial reports. This saves you time and reduces accounting errors made during manual processes.

Expense management software

Expense management software automates expense approval and verification. (Brex does this with AI and machine learning.) It also helps you control your spending, especially on travel expenses, incidentals, subscriptions, and office supplies.

Good expense management software includes automated receipt scanning, real-time expense tracking, and policy compliance checks. For instance, with an expense management solution like Brex, you can:

• Look at customized AI-powered insights, such as spikes in spending, that help improve decision-making
• Run real-time spending and budget reports across cards, reimbursements, travel, and payments
• Manage global and multi-entity spend across locations and operate in virtually any currency
• Simplify expense reporting for both employees and finance teams, reducing the time and effort required for this essential task

Step 4: Categorize your business expenses

Keep organized financial records by categorizing costs in your expense tracking software. Create categories that align with your company's expense policy, such as::

• Tech subscriptions
• Office supplies
• Marketing
• Utilities
• Travel
• Rent

This helps you better track your cash flow, identify spending patterns, and make informed financial decisions. Expense categorization also simplifies tax preparation so you can take full advantage of any potential tax deductions.

Step 5: Record and file your receipts

Use accounting software or a business expense tracker to store digital receipts and keep detailed records. Some apps let you snap a photo of your receipt and automatically match it with the right expense. This helps you avoid lost receipts and simplifies financial audits.

Ask your accountant or financial advisor how to keep receipt records according to IRS requirements.

Step 6: Track and review your spending regularly

Review your expenses weekly or monthly. This regular review should include a thorough expense reconciliation process to ensure all recorded expenses match your bank statements and receipts. Analyze spending data to learn more about your financial habits and identify areas for improvement.

Expense reconciliation is a critical step in maintaining accurate financial records. It helps you:

• Identify any discrepancies or errors in your expense records
• Catch any fraudulent charges or unauthorized spending
• Ensure all legitimate business expenses are accounted for
• Prepare accurate financial statements and tax returns

Use spend management software to automate reporting, tracking, and the expense reconciliation process — and correct any errors or omissions promptly.

Brex simplifies this with automated tracking, comprehensive reporting features, and tools that streamline the expense reconciliation process. By automating these tasks, you can save time, reduce errors, and gain more accurate insights into your company's financial health.

Remember, regular expense tracking and reconciliation not only helps you maintain accurate books but also provides valuable insights for budgeting, forecasting, and strategic decision-making. It's an essential practice for businesses of all sizes to ensure financial transparency and compliance.

There are countless reasons why you should automate your business expense tracking. Here are some of the main ones.

Less risk of human error

Manual processes are prone to mistakes, which can cause financial discrepancies and compliance issues. Mistakes can also lead to:

• Inaccurate financial reports
• Missed tax deductions
• Fraud

Automation software automates data entry and optimizes processes so you can avoid such errors altogether.

More efficient

Automating expense tracking streamlines budgeting and cash flow management so you can better allocate resources.

It also simplifies expense tracking, making it easier to track spending and process payments. Real-time cost tracking also gives you instant insights into your financial status. This is pivotal to making informed decisions and avoiding cash flow problems.

Improved compliance

Expense tracking helps you stay compliant with financial obligations and tax reporting requirements. Addressing compliance throughout the year, rather than waiting until the end, minimizes risks. (Think penalties, fines, and audit issues.)

Automation records your expenses accurately and promptly — reducing the chances of non-compliance. Automated expense reporting ensures that all submitted expenses adhere to company policies, flagging any discrepancies for immediate review.

Increased security

Automated systems use encryption and secure access controls to safeguard your financial data. This helps your business maintain trust and comply with data protection regulations, which can also help you win more business.

Scalability

As your business grows, manual tracking becomes more complex and time-consuming.

“Brex is basically saving us 2 to 3 days on the financial close process monthly,” said Sean Soper, Head of Accounting and Financial Operations at Alchemy.

Expense automation handles higher transaction volumes, so your business can scale without the extra administrative overhead. Your expense management processes remain efficient and accurate, regardless of your business size.

Looking for an all-in-one expense management solution? Create a single source of truth with Brex. Here’s how Brex can help you efficiently track business expenses.

How to track business expenses with Brex

After using your Brex corporate credit card, the expense appears instantly in your dashboard and app. Each entry shows details like amount, vendor, and merchant category. You can also upload receipts and add memos for clarity — a receipt will be generated automatically for thousands of merchants and added to the transaction.

Here’s how to use Brex to view, filter, group, and manage your expenses.

Viewing a single expense

In your Brex web dashboard:

1. Go to the Expenses page. Admins can view All expenses, Not compliant, or Pending my review.

2. Select the expense for more details.

3. A window will open with additional information.

In your Brex mobile app:

1. Go to Wallet > Latest expenses or tap All expenses for older entries.

2. Tap the expense for more details.

Filtering expenses

Admins can use the search bar on the Expenses and Wallet pages to filter expenses by date, type, spend limit, status, and more.

Grouping expenses

Group expenses by spend limit, merchant, category, or employee

1. On the Expenses or Wallet page, click the Group dropdown.

2. Choose your grouping parameter.

3. Click See All in any group header for detailed views.

Perform actions like filtering, grouping, and reviewing directly from All Expenses or Wallet.

How to use Brex for expense tracking

Once approved, it’s easy to set up your Brex account.

Follow these steps to get started

1. Enter all account details and customize your settings.

2. Connect other bank accounts for transfers and automatic payments.

3. Set up your Brex profile and invite your teammates.

Application

When signing in for the first time:

1. Verify your business address, incorporation details, and ownership information.

2. Apply for financial services and a credit limit by connecting your bank account. (You can use Plaid or upload bank statements.)

Card setup

1. Set up auto-pay by choosing an internal or external account from which you’ll make your monthly payments.

2. Order your first physical Brex cards and spin up virtual cards. The system generates your virtual card number immediately.

Brex business account setup

1. Fund your account via check, ACH, or wire transfer from an external bank account.

2. Make your first payment once funds are available.

3. Order your first Brex card.

4. Connect payroll and other resources.

5. Invite Brex business account-specific users like account admins and accounts payable clerks.

Configure your account

1. Invite users and manage your organization by creating departments and locations.

2. Integrate your accounting software for automatic reconciliation.

3. Start earning Brex rewards and redeem points for various benefits.

4. Set up budgets and spend controls for your organization.

5. Learn about Brex travel to book trips directly from your Brex app or dashboard.

6. Manage user permissions and roles to delegate tasks and approve spend.

With Brex, tracking and managing your business expenses has never been easier. Enjoy seamless integration, instant updates, and complete control over your financial operations.

Automating business expense tracking simplifies financial planning. You’ll have a better grip on your cash flow, budget constraints, and tax deductions. You’ll also learn where to cut costs or increase investments to widen your bottom line.

Brex offers a modern, all-in-one solution for tracking and managing business expenses. Key features include:

• Instant expense tracking: Transactions appear instantly with detailed entries.
• Easy expense management: View, filter, and group expenses effortlessly.
• Simple setup: Set up your Brex account, connect bank accounts, and start using your cards quickly.
• Comprehensive control: Manage users, integrate accounting software, and use Brex rewards and Brex travel.

Ready to simplify your expense management? Get started with Brex today, or book a demo to see how easy it is to track your business expenses efficiently.