How to Track Company Expenses: A 7-Step Control Guide

This guide covers tracking and controlling what your employees spend on behalf of the company: meals, transport, hotels, fuel, corporate card spend, cash advances. It is not about the accounting concept of a cost center, and not about sole traders tracking income and outgoings. Search results mix those three topics constantly; here there is only employee spend at a company.

Below you will find the difference between tracking and control, then where the process usually breaks, then the end-to-end setup in seven steps.

What is expense tracking, and how is it different from expense control?

They are assumed to be the same thing, but they work at different moments.

Expense tracking looks backwards. The money is already spent; you record it, collect the receipt, categorise it and report on it. The output is visibility. If tracking works, at month end you can answer "who spent what, on what" without delay.

Expense control looks forwards. Where spend breaks your rules, you intervene — before it happens, if possible. The output is not visibility but changed behaviour.

The simple split: tracking tells you what happened, control determines what will happen. A company with no tracking cannot build control — it does not know what to limit. A company that only tracks rediscovers the same variance every month. For the basics see what an expense is, and for the wider frame the expense management guide.

Three moments of control

You can intervene at three points. Which point you stop at shows your maturity level.

Most companies operate only in the "after" column. Control means shifting the weight to the left.

Maturity levels

1. Manual collection — receipts in a bag, a sheet circulating by email.
2. Central record — everything lands in one place, but there are no rules.
3. Rule-based checking — policy breaches are flagged as the record is created.
4. Preventive control — a breach cannot even be recorded, or is blocked before it reaches an approver.

You cannot skip a level. In companies that try to jump from 1 to 4, the system gets installed and nobody uses it.

Why expense tracking slips: the typical breaking points

• The spreadsheet-and-email chain. The form circulates in several versions, approval sits in an inbox, and who approved what cannot be proven later.
• Late receipts. The receipt arrives weeks after the spend; period close gets stuck on it.
• Inconsistent categories. The same spend gets booked to three different lines by three people, and the report becomes meaningless. How small items slip through is covered in detail in tracking small expense items.
• Unwritten rules. "Dinner shouldn't go above about this much" is a different figure in everyone's head; an unwritten rule cannot be enforced.
• Card statements and records living apart. There is a line on the statement with no receipt against it, and nobody knows who to chase.

What these five have in common: none of them is solved by "let's all be more careful". They are all process-design problems.

Step 1 — Put the expense policy in writing

All of control rests on a single document: who can spend, in which category, up to how much, and who approves exceptions. Until the category list, the per-category cap, the receipt requirement and the exception owner are settled, none of the other six steps works.

We won't repeat how to write the policy here; the step-by-step version is in the expense policy guide. If you are starting from scratch, the expense policy template gives you a ready skeleton.

One warning: do not try to write a perfect policy in one go. Keep the first version short and revise it in three months with real data.

Step 2 — Design approvals around who approves what, and when

An expense approval process has to answer two questions: how many levels does a given amount or category pass through, and what happens when the approver is away.

A practical threshold approach:

• Low-value spend that fits policy → straight to the manager, one level.
• Above the set threshold, or an exception → manager plus finance, two levels.
• Contractual or project-specific items → an extra approval from the project owner.

Adding levels does not add control; it adds time. Every extra level adds days to approval and pushes receipts later. If delegation is not set up — who approves in place of a manager on leave — a multi-level flow jams during the first holiday season. The mechanics are covered in expense approval workflow and delegation.

To try your own levels on paper, use the approval workflow builder.

Step 3 — Define limits up front

Limits are the cheapest tool for moving control from "after" to "before". They are defined on three axes: team, project and category. A given expense is judged at the intersection of all three — for example sales team plus client visit plus meals.

Decide up front what happens when a limit is breached: a warning, or a hard stop. Where each belongs is its own discussion; hard-stop policy enforcement covers it. The steps for setting up limits and rules are in how to set up expense restrictions, so we won't repeat them here.

Don't confuse this with budgeting: expense data feeds budget decisions, it does not replace the budget. If you want to build out the budget side too, see budget management.

Step 4 — Connect advances to their settlement

Cash advances are where tracking breaks most often: money goes out, the spend happens, and settlement is forgotten. The balance stays open for months and turns into a receivable nobody owns.

Think of the setup in three parts:

1. Request and approval — reason, estimated amount, date range.
2. Expense records — every expense made from the advance is linked to the same request.
3. Settlement — the amount spent is deducted from the advance, and the remainder is returned or the shortfall topped up.

Point 2 is the critical one. If advances and expense records live in different places, settlement is calculated by hand, and hand-calculated means late. A simple rule that blocks a new advance for anyone with an unsettled balance cuts most of this loop on its own.

Step 5 — Capture spend the moment it happens

The later the receipt is collected, the more errors the record carries. The goal is to bring the gap between spend and record down from days to minutes.

• Reading data from a receipt or invoice image. The employee photographs the receipt with their phone, and the amount, date and merchant become a record. The comparison with manual entry is in artificial intelligence receipt capture versus manual entry.
• E-invoice QR codes. An expense record can be created from the QR code on an incoming document.
• Corporate card spend. The card statement is uploaded to the system as a file at period end; date, amount and card number are used to match it against the records employees entered. Unmatched lines drop into a "missing receipt" list and get chased. The detail is in corporate credit card statement reconciliation.

If you are going to keep running this manually, at least use one fixed form; free-text fields are the main source of inconsistent categories.

Step 6 — Standardise the handover to accounting

The record is collected and approved — then what? In most companies a second round of manual entry starts here: approved expenses are keyed into the accounting system one by one.

The way to remove that is mapping: you define once which accounting account each expense category corresponds to, and the handover runs on that mapping. Without a mapping, the handover cannot be automated.

Don't make the tax calls yourself: which items are deductible, and which count as non-deductible, varies by company and by period. Set the classification up with your accountant and write it into the policy that way.

Step 7 — Track the indicators that show control is working

"How much did we spend" is not a control indicator; it is an outcome. Four numbers show whether control is working:

Don't try to fix all four at once. Pick the worst one, work on that single indicator for three months, then move to the next.

Where to start, by company size

Can expense tracking be done in a spreadsheet?

Short answer: up to a point, yes. With few employees, low spend volume and a single approver, a spreadsheet is enough.

Where spreadsheets break is clear: version chaos when several people edit at once, approvals sitting in email and unprovable afterwards, receipts living apart from the line item, rule checking left entirely to a person. If you are living with two of those four, the spreadsheet is no longer a record-keeping tool — it is a source of risk. For the frame around the overlapping terms, see spend management.

What to look for when choosing expense tracking software

The long list of features to look for is in the expense management guide. Here we leave only the three questions that decide things from a tracking and control point of view:

1. Is the rule engine genuinely preventive? A tool that only warns you after the report is a tracking tool, not a control tool.
2. How does the handover to accounting or ERP work? Can a mapping be defined, or will you be fixing the export by hand?
3. How fast is it for the employee? If filing a receipt takes more than a minute, it is not the process that wins but employee resistance.

Where Masraff sits in these steps

Masraff is an expense management solution built to run all seven of the steps above in one place. Policy and limit definitions, warnings or hard stops on breach, multi-level approvals and delegation, advance requests and settlement, reading data from a receipt image, creating records from e-invoice QR codes, and uploading the corporate card statement to match it against existing records are all inside the product. On the accounting side, export to more than 20 ERP and accounting systems is supported.

Today 800+ customers and 100K+ users across 5+ countries use Masraff. If you want a closer look at the policy and approval side, the approvals page is the place to start; to evaluate the process end to end, start from the spend management product page.

Frequently asked questions

What is the difference between expense tracking and expense control?

Tracking looks backwards: spend is recorded, documented and reported after it happens, and the output is visibility. Control looks forwards: through rules, limits and approvals it intervenes in out-of-policy spend before it happens where possible. You cannot build control without tracking, because you would not know what to limit.

What are the steps of expense tracking at a company?

Seven steps: (1) put the expense policy in writing, (2) build the approval flow with its levels and delegation, (3) define team, project and category limits up front, (4) link advances and their settlement to expense records, (5) capture spend the moment it happens, (6) standardise the accounting handover with an account mapping, (7) track approval time, breach rate, missing receipt rate and period close time.

How many approval levels should an expense process have?

There is no fixed number; it depends on amount and category thresholds. A common setup is one level for low-value spend that fits policy, and two levels above the threshold or for exceptions. Since every extra level lengthens approval time, only add one if there is a concrete risk reason — and always define delegation.

Is a spreadsheet enough for expense tracking?

With few employees, low volume and a single approver it can be. Once version chaos, approvals stuck in email that cannot be proven later, receipts that don't match their line item, and rule checking left entirely to people begin, the spreadsheet stops being a record-keeping tool.

What should you look for when choosing expense tracking software?

Three things decide it: whether the rule engine is genuinely preventive (warning after the report is not control), whether the accounting or ERP handover can run on an account mapping, and how fast filing a record is for the employee. If a record takes more than a minute, the system won't be used.

How do you track the settlement of cash advances?

Once an advance request is approved, every expense made from it has to be linked to that same request. The expense records are deducted from the advance, and the remainder is returned or the shortfall topped up. If advances and expenses are held in separate places, settlement is calculated by hand and runs late; making it a rule that nobody with an unsettled advance gets a new one is the most effective safeguard.