The essential guide to expense management automation

Expense management automation optimizes how you track, approve, and reimburse business expenses. It saves you time and reduces errors.

With automated expense tracking, you can:

• Categorize expenses automatically
• Remove manual data entry
• Capture receipts instantly

The expense approval process is also quick and painless with automation. For example:

• Automated systems flag out-of-policy expenses for managers to review. They also automatically approve expenses that do comply with the policy. This helps managers focus on only the exceptions flagged for them versus having to review every single expense.
• Reimbursements are automated. Employees get paid back quickly — and you get clear records showing their transactions. This transparency makes audits and tax preparation much easier.

Let’s take a look at more reasons you should consider expense management automation.

Automated expense management can strengthen your company’s financial control and productivity.

With the right platform, you can look forward to:

• More efficiency: Automate repetitive tasks like data entry and receipt tracking to save time.
• Enhanced accuracy: Reduce expense reporting errors and ensure financial records are precise.
• Cost-effectiveness: Optimize your company’s budgets, predict future costs, and optimize cost savings.
• Employee satisfaction: Streamline expense reimbursement processes to promote happier employees.
• Compliance assurance: Automatically enforce company policies and regulatory standards to avoid penalties.

Traditionally, most steps in the expense process were manual.

An employee would type up their expenses in a doc or spreadsheet, print it out, and staple paper receipts to it. Then hand it to their manager for approval.

From there, the report would make its way up to other departments for approval — like accounting or HR. And then the company would officially cut the employee a check. (Which would arrive by mail, of course.)

But with modern apps, you can speed up and automate those steps.

The latest software helps companies replace nearly every manual step in the expense process.

For example, an employee can open their expense app, choose the items they bought, type in how much they cost, and scan their receipts. After they’re done, the report automatically gets sent to the right manager for approval. No printing, stapling, or walking over to anyone’s desk required.

With a quick glance, managers can make sure employees are in-policy, and approve reports from the app. And the best part? After approval, employees automatically receive their reimbursements. Done and dusted!

More on this in the next section.

Historically, manual expenses involved paper, from receipts to printed spreadsheets and more. This naturally introduced inefficiencies.

Receipts can get lost or torn. And we expect human error with any manual processing.

Thankfully, receipt scanning tools simplify expense automation for organizations.

Employees can easily capture and submit receipts using optical character recognition (OCR) technology. This tech extracts data from receipts in any language and verifies it against expense claims.

However, capturing and uploading receipts on the go can be challenging. So … what if receipts were automatically included with transactions?

Employees could conduct transactions with routine vendors, and a virtual receipt would attach itself automatically. This automates receipt creation and expense reconciliation with submitted expenses.

Here’s what it looks like to forward a virtual receipt in Brex:

In a recent Brex survey, 32% of companies cited slow reimbursements and time-consuming approvals as the main challenges with T&E programs. Thirty-one percent struggled with integrating software, like accounting systems. And 29% had issues with employees not submitting expense documentation.

Here’s how automated expense management can change that.

Improved integrations

Expense management automation software integrates seamlessly with accounting systems and existing HR platforms.

Accounting integrations can help you close the books faster. And HR system integrations can help you automate employee onboarding and offboarding to Brex.

Better compliance

Automated systems allow you to embed your policies into every transaction. They automatically enforce rules, generate receipts and memos — and even learn your policies over time. This improves compliance and helps employees follow the expense policy.

Achieve up to 99%* compliance and save your team up to 4,000 hours a year with expense automation. Try Brex now.

*The metrics provided are from July 2023 and are for illustrative purposes only. Past performance does not guarantee future results, which may vary.

Increased efficiency

Automated expense management makes the entire expense reporting and reimbursement process more efficient.

Here are some ways it enhances efficiency:

• There are fewer errors which means less problems and delays related to fixing problems (remember it costs $52 to correct an expense reporting error)
• It’s faster than manual data entry so employees can get back to work quicker
• Automated approvals help employees do their jobs and free up managers

Ensure agile expense processes

Agile expense processes help teams adapt to changes like mergers, expansions, or new hires.

Automated systems offer the flexibility and scalability to accommodate these changes — without additional investments or licensing. Try them today to see the difference they can make for your team.

Enhanced security

Automated expense management prevents fraudulent or inappropriate spending. A platform like Brex protects and accurately records your expense data.

The system strengthens internal controls and reduces risks with features like:

• 24/7 fraud protection: Our advanced fraud monitoring, industry-leading AI technology, and 24/7 support are here to protect you
• Account security: We use encryption, idle lockouts, 2FA, and more to ensure secure browsing and authentication
• Fraud prevention: To help prevent fraud, only authorized users can access accounts and make changes

Don’t waste hours reviewing every global expense — and risk missing ones that‌ need a closer look.

Instead, let artificial intelligence support your accounting teams.

AI can be your team’s tireless teammate. It’s as skilled as the top industry firms and instantly understands your company’s data. (You’d need an army of associates to achieve this manually.)

For instance, with AI, you can:

• Set up automated approval workflows based on spending limits and policy rules.
• Add notifications and reminders to promote timely approvals and avoid delays.
• Use an electronic system for managers to review claims digitally.

How AI-powered expense automation works

AI-powered expense automation transforms how you handle expenses.

It can analyze each reported expense, detect non-compliant claims, and automate approval workflows. It can also instantly flag issues to make sure every report meets your policy rules.

AI expense automation can also help you:

• Review and approve claims digitally, with AI sending reminders to keep things moving.
• Scan receipts, categorize expenses, and match them with transactions.
• Create automated workflows to accelerate the approval process.

Ready to see how Brex AI can help your business streamline workflows? Let’s take a look at its features.

Traditional expense reimbursement moves at a glacial pace that frustrates employees and reflects poorly on finance operations. Automation transforms this process from weeks-long ordeals into streamlined workflows that can complete in days or even hours. The speed improvement goes far past employee satisfaction to create real operational and financial benefits for the organization.

The cost of slow expense reimbursements

Manual reimbursement processes create delays at every step. Employees accumulate receipts for weeks before submitting expense reports at month-end. Those reports then sit in managers' inboxes awaiting physical signatures or email approvals. Once approved, finance teams batch process payments weekly or monthly, adding more waiting time.

Any hiccup extends these timelines further. A missing receipt stops the entire report. A manager's vacation delays approval for weeks. Questions about expense coding trigger email chains that drag on for days. Meanwhile, employees who fronted their own money for business expenses essentially provide the company an interest-free loan while waiting for reimbursement.

Streamlining approval and payment with automation

Automated expense platforms compress the entire reimbursement timeline through digital workflows. Employees submit expenses immediately through mobile apps, photographing receipts at the point of purchase. Managers receive instant notifications and can approve expenses from their phones, whether they're in the office or traveling. The approval happens in minutes rather than days.

Once approved, automated platforms process reimbursements immediately through direct deposit. No more waiting for check runs or ACH batch processing. Some companies using automation reimburse employees within 24 hours of approval. The technology eliminates the paper shuffling, manual data entry, and batch processing that create delays in traditional processes.

Integration with corporate cards reduces reimbursement needs entirely. When employees use company cards, transactions flow directly into the expense platform without requiring reimbursement. The company pays the card bill while employees avoid fronting money. This approach eliminates the reimbursement cycle for most business expenses.

Why speed matters

Quick reimbursement builds trust between employees and the finance team. Staff who receive prompt payment for out-of-pocket expenses feel valued and respected. They're more likely to comply with expense policies when the process works efficiently. Slow reimbursements, conversely, encourage employees to find workarounds or delay submitting expenses altogether.

The accounting benefits extend past employee satisfaction. Faster processing means finance teams can close books on employee expenses quickly each month. Reimbursement liabilities don't accumulate on the balance sheet. Real-time recording of expenses improves cash flow visibility and budget tracking. Finance transforms from a bottleneck into an enabler of business velocity.

Brex AI helps you streamline your workflows and expenses.

Here’s how you can accelerate expense management with Brex AI.

Automate workflows for every spend

Brex AI is your decision-making partner, providing the automation and suggestions you need. Every spend type gets an optimized workflow to reduce manual tasks and save time.

Give every employee their own assistant

Executives aren’t the only ones who deserve an assistant. Brex Assistant extends that luxury to every employee. Team members can ask their dedicated assistant questions to instantly learn about a spending limit or policy.

Put expense reports on autopilot

Brex auto-generates receipts from L3 payment data. It uses large language models (LLMs) and real-time integrations to fill in memos, attendees, and expense categories. This makes expense reporting a breeze.

Offload expense tasks to AI

Delegate tasks to Brex AI, like assigning charges to specific budgets or adding memos to expenses. Brex Assistant follows your commands and handles these tasks effortlessly.

Automate expense resolution

Brex AI automates in-policy approvals, custom routing, and exception detection. It even starts conversations to resolve issues faster, providing smooth operations.

Reduce receipt reviews

Brex AI searches receipts and data for policy violations using LLMs. (It can detect issues like unauthorized alcohol purchases, so you don’t have to.)

Find transactions fast

Get instant insights into spending patterns with natural-language search. Quickly find transactions like “marketing expenses over $200 without receipts last month.”

Ready to transform your expense management? Try Brex AI today.

Automated expense management transforms audit preparation from a scramble into a routine process. Every transaction creates a complete digital trail showing who spent what, when they spent it, and who approved it. Receipt images attach directly to expenses through mobile capture, approval timestamps document the authorization chain, and policy checks record compliance verification. When auditors request documentation for any transaction, finance teams can retrieve the complete history in seconds rather than spending days searching through filing cabinets and email archives.

The automation enforces compliance continuously rather than catching violations during audits. When an employee tries to submit an expense outside policy limits, the software flags or rejects it immediately. First-class flights without pre-approval get blocked. Meals exceeding per-diem limits require justification before processing. This real-time enforcement means auditors find fewer violations because problems get caught and corrected as they occur. The systematic application of policies across all expenses demonstrates strong internal controls that satisfy regulatory requirements.

Common audit findings disappear when automation handles expense management. Missing receipts become rare when mobile apps prompt immediate capture and won't process expenses without documentation. Categorization errors vanish when the software consistently codes expenses based on merchant data and predefined rules. Duplicate submissions get caught automatically before they reach the books. The result is cleaner financial records with fewer exceptions for auditors to investigate, shortening audit timelines and reducing the risk of adverse findings.

Audit readiness becomes a competitive advantage for companies using automated expense management. CFOs can confidently tell board members and investors that every expense is documented, approved, and compliant. When tax authorities inquire about specific deductions, finance teams produce supporting documentation immediately. For companies preparing for IPO or managing SOX compliance, the combination of policy enforcement, approval workflows, and comprehensive audit trails demonstrates mature financial governance. At Brex, our expense platform builds this audit readiness into every transaction, turning what was once a source of anxiety into evidence of financial excellence.

Businesses today are global and complex. You might have overseas vendors and employees in different countries. You might also have global subsidiaries with local tax rules.

This makes manual global expense management a time-consuming hassle.

Thankfully, automation makes global expense management easy. It removes manual errors and helps you capture receipts in any language or currency. You can also track VAT across markets and integrate your expense system with financial tools like NetSuite.

Compliance with US expense regulations protects companies from tax penalties, failed audits, and legal problems. The IRS has specific requirements for business expense documentation, and companies must follow these rules regardless of whether they use manual or automated processes. These fundamentals form the foundation of any compliant expense management program.

Always require proper receipts and documentation

The IRS requires receipts for all lodging expenses and any other expense over $75. While technically expenses under $75 don't need receipts by IRS rules, best practice demands documentation for every transaction. Each expense needs a receipt showing the amount, date, vendor, and itemized details. For meals and entertainment, you must also document attendees and the business purpose of the meeting.

Automated expense platforms enforce documentation requirements by blocking reimbursement until receipts are attached. Mobile apps prompt employees to photograph receipts immediately after purchases. The software can require business purpose notes before processing expenses, ensuring no transaction lacks adequate evidence. This systematic documentation protects the company during audits and satisfies IRS requirements.

Implement an accountable reimbursement plan

Companies must structure reimbursements under an IRS accountable plan to avoid tax consequences. This requires three elements. First, expenses must have a clear business connection. Second, employees must provide adequate substantiation within a reasonable time, typically 60 days. Third, employees must return any excess advance payments promptly.

Failing any part of this three-part test turns reimbursements into taxable wages for employees. Automation helps by time-stamping expense submissions to track the 60-day window. Digital workflows ensure timely processing and flag old expenses that might violate IRS timing requirements. The platform can automatically calculate and request return of excess advances, maintaining accountable plan compliance.

Establish clear policies and approvals

Internal expense policies must define eligible expenses, spending limits, and pre-approval requirements. Per diem rates, travel class restrictions, and entertainment guidelines need clear documentation. Multi-level approval workflows provide necessary oversight, with managers reviewing employee expenses and finance teams checking policy compliance. This segregation of duties satisfies SOX requirements for public companies.

Automated platforms build these policies directly into the approval process. Out-of-policy expenses get flagged immediately for review. Spending above certain thresholds routes to higher-level approvers automatically. The software enforces consistent policy application across all employees and departments, eliminating the favoritism or oversights that occur with manual reviews.

Retain records for at least four years

The IRS requires companies to keep expense records for a minimum of four years from the filing date. Physical receipts can fade, get lost, or suffer damage over time. Digital storage through expense management platforms ensures permanent, searchable records. Cloud-based storage provides automatic backups and easy retrieval during audits.

Digital platforms also maintain the complete context around each expense. Approval chains, policy checks, and correspondence about specific transactions remain linked to the original expense. This comprehensive record-keeping exceeds IRS minimums while making audit response faster and more complete.

Here’s how Brex helped DoorDash automate expense management.

Company

DoorDash connects consumers with local businesses. The company serves 32 million users across 27 countries.

Challenge

DoorDash uses multiple cards and platforms to manage spending. As they grew, this became complicated. The user experience suffered, and managing global expenses was a headache. They needed one integrated solution for global corporate cards and reimbursements. Managers wanted a proactive way to track spending — and employees needed an intuitive experience.

Solution

DoorDash chose Brex for corporate cards and expense management.

Brex deployed a fully configured solution for DoorDash. We transitioned its ERP, HRIS, and SSO integrations quickly.

Impact

Brex’s global spend solution has empowered DoorDash employees with:

• Card acceptance in 100+ countries
• Reimbursements in 4 days or less
• Local and USD currency visibility
• 24/7 support

The finance and travel teams now have a single, real-time view of global spending.

DoorDash can pre-approve travel spending or stipends and enforce custom expense policies automatically.

The Brex mobile app also enhances the user experience. Employees can use their virtual cards, check spending budgets, request reimbursements, and add receipts from anywhere in the world.

According to Josh Pickles, Head of Global Strategic Sourcing and Procurement, DoorDash:

“The Brex app has been a major gain for us in both user experience and efficiency for T&E. It’s easy for employees to understand where and how to spend, driving accountability from top to bottom.”

Expense management automation simplifies your processes and gives you control over your finances. It’s a smart move for any business looking to improve expense management.

By automating global expense management, you reduce errors, policy violations, and fraud. You also improve efficiency and transparency throughout the expense management process.

The bottom line? AI expense automation amplifies human effort — so your team can skip the fact-finding and go straight to better decision-making.

Want to see it in action? Try Brex for free now, or schedule a demo.