The ultimate guide to employee expense management

Managing employee expenses manually might work when your team is small and based in one office. But once you start hiring across locations, reimbursing international team members, or trying to approve spend over email, things get complicated. 

Finance teams spend hours chasing receipts and categorising expenses. Employees wait weeks for reimbursement. No one knows what’s already been approved or spent.  

This guide explains how to build an effective, scalable employee expense process. 

It sets out how to write a policy, streamline approvals, reduce unnecessary spending and choose tools that don’t just solve the problems you might have now, but set your business up to scale.

What is employee expense management?

Employee expense management refers to the systems, policies, and tools a company uses to track, control, and reimburse business-related spending. That might be travel, subscriptions, meals, or mileage. It’s an important function that supports finance visibility, cost control, and compliance.

An effective process gives employees flexibility to do their jobs while giving finance teams visibility and control over what’s being spent. At its best, it’s fast, simple, and aligned with company policy. At its worst, it’s a manual mess of receipts, spreadsheets, and late payments.

Read more: The smart way to manage global spend from the UK

What’s in expense policies that work?

A strong expense policy sets expectations and eliminates grey areas. It should cover:

• What qualifies as a reimbursable business expense

• Daily or category-specific limits

• Receipt submission requirements and deadlines

• Approval workflows (e.g. manager, finance team)

• Rules for travel, mileage, per diems

• The reimbursement process and timelines

• Non-compliance consequences

Tip: Clarity is key. Avoid vague language and make the policy easy to access and update. A good policy strikes a balance between control and flexibility. If it's too rigid, employees will ignore it. If it’s too vague, finance teams will waste hours interpreting every submission.

Read more: Level up your business finances with expense IQ

How to create an effective employee expense policy

If you're starting from scratch, involve stakeholders across finance, HR, and team leads. Keep these steps in mind:

Assess typical spend patterns 

What do employees currently expense? Where are the gaps or risks? For a clearer view of which expenses are directly tied to delivering your product or service, you can calculate cost of sales alongside your broader expense categories.

Define rules and limits

Base these on budget, team structure, and tax regulations (e.g. HMRC mileage rates).

Make it accessible and enforceable

 Use automation tools to apply your policy at the point of spend.

Communicate and update

Treat it like a living document. Update it as your business grows or enters new markets.

How to streamline expense reporting and reimbursement 

Even with a strong policy, a poor process can make expense management painful. Here’s how to fix that:

Simplify submissions

Stop asking employees to fill out spreadsheets or forward receipts over email. Use a tool that lets them snap a photo of a receipt, select the category, and submit on the spot.

Improve receipt management

Lost receipts are one of the biggest blockers to fast reimbursements. Choose a system that automatically extracts data from receipts and stores them digitally. This makes audit trails easy to manage and ensures HMRC compliance.

Speed up approvals

Waiting a week for a manager to approve a taxi ride isn’t a good use of anyone’s time. Set up rule-based approvals so smaller claims are auto-approved, while larger expenses route to the right budget owner. Real-time notifications can prompt faster sign-off, and digital audit logs keep everything on record.

Read more: Global business expense management software made easy

Top tools to simplify spending

Digitising expense management saves time and gives finance teams real-time control. Look for tools that offer:

• Company-issued cards with spend controls

• Mobile receipt capture with OCR

• Automated approvals and policy enforcement

• Real-time reporting and analytics

• Accounting integrations (Xero, QuickBooks, Sage)

• UK compliance support (e.g. VAT, Making Tax Digital)

Why teams choose Airwallex

Airwallex does all of the above, offering modern spend management as part of its broader Total Spend Infrastructure (TSI). That means you have one platform for cards, approvals, reimbursements, Global Accounts, FX, and Bill Pay. It’s an easy way to centralise spend across your business.

Check out our comparison of the top 7 expense management platforms in 2025.

How to keep spend safe and compliant

When expense management relies on spreadsheets, email threads, or manual uploads, visibility disappears, along with the controls that keep your business safe. There’s more room for accidental errors, deliberate misuse, and audit risk.

Here’s how to prevent issues before they start:

Spot common fraud patterns early

Some expense fraud is deliberate, some is simply due to poor processes. Watch for patterns like:

• Falsified receipts – old or personal receipts passed off as work-related.

• Duplicate submissions – employees submitting the same expense twice (often with slight edits).

• Overstated mileage or per diem claims – rounding up trip distances, or claiming per diems that weren’t approved.

• Split transactions – breaking one high-cost purchase into smaller amounts to stay below approval thresholds.

Using modern expense software helps flag these issues automatically. With Airwallex, you can:

• Block submission of expenses without receipts or supporting evidence.

• Set strict policy limits on mileage, meal allowances and categories.

• Require manager approval based on amount, department, or role.

• Automatically match receipts to card transactions.

Align with HMRC rules

To remain compliant with HMRC, you need to:

• Track and report VAT accurately (gross, net, and tax amounts must be recorded).

• Calculate mileage using HMRC-approved rates, especially if reimbursing use of personal vehicles.

• Digitally store all records, including receipts, for a minimum of 6 years.

• Ensure your process supports Making Tax Digital if you're VAT registered.

Airwallex helps automate this by capturing VAT on expenses, applying local mileage rates, and storing all data securely in audit-ready format.

Audit proactively, not reactively

Compliance isn’t a one-off exercise. Regular reviews catch issues early, help you fine-tune policies, and surface blind spots in how employees spend. Build these simple checks into your monthly or quarterly workflows:

• Filter expenses by amount, team, category, or policy violations to find outliers.

• Review high-risk categories (like travel and entertainment) for patterns.

• Investigate delayed submissions or consistently missing receipts.

• Keep a log of who approved what and when. (Airwallex creates a digital audit trail automatically.)

How to save with smarter spend

Smart expense management helps maximise value from every transaction. Here’s how to drive efficiency and reduce costs without adding admin overhead:

Switch from reimbursements to company cards

Reimbursements slow down employees and open the door to unapproved purchases. Issuing company cards with pre-set limits gives finance teams more control and employees more freedom. With Airwallex cards, you can set per-user limits, track spending in real time, and manage multi-currency transactions, all from one dashboard. It also means employees aren't left frustrated by slow reimbursement.

Consolidate vendors and negotiate better deals

Use your expense data to identify frequent suppliers. Standardise across teams to unlock volume discounts, reduce duplicate purchases, and eliminate underused subscriptions. Preferred vendor lists help reduce fragmented spend and improve consistency.

Streamline your tools

Using separate platforms for cards, FX, reimbursements and reporting adds cost and complexity. Airwallex consolidates spend management, international payments, and expense tracking in one place, so you can eliminate redundant systems and reduce manual work.

Turn spend data into smarter decisions

Analyse spending by team, category or currency to uncover inefficiencies. Spot recurring waste, trim unused subscriptions, and reallocate funds where they’ll have more impact. With Airwallex, you get visibility into how and where money is spent. 

Airwallex: Your expense engine for growth

Airwallex helps finance teams stay in control while giving employees a modern, easy-to-use experience. Here’s how:

• Instant virtual and physical employee cards with custom spend limits and real-time tracking

• Low FX fees  

• One platform for global payments, accounts and expenses, reducing admin and giving full visibility

• Integrations with accounting tools like Xero and QuickBooks, syncing receipts, categories, and tax data

• Audit-ready digital records stored securely to meet HMRC and MTD requirements

Airwallex is more than an expense tool. It’s your operational backbone for payments, FX, cards, and financial controls. As you grow, you won’t outgrow your infrastructure. Streamline your entire spend process with Airwallex.

A financial backbone for your business

As teams grow and borders disappear, the right spend processes and tools become essential to staying in control without slowing anyone down.

With a clear policy and the right platform, your business can reduce waste, maintain compliance, and create a better experience for both employees and finance teams. Airwallex helps you do exactly that by bringing expenses, payments, and controls together into a single, scalable system.