Expense management as a financial control strategy in procurement

Many organizations view expense management as a cleanup step after employees submit expenses, and most tools reinforce that mindset by centering on corporate card programs, reimbursements, and automated expense reports. While these capabilities speed up processing, they leave companies reacting to spend rather than guiding it. 

For finance teams, the real challenge begins earlier—during the purchasing and approval process—before spending ever becomes an expense. By implementing controls at the point of purchase, CFOs can help prevent spend leakage, reduce audit exposure, and minimize manual work during reconciliation. This proactive approach reframes expense management as a financial control strategy, bringing more predictability to spending and shaping how money leaves the business.

What expense management covers

Expense management is how a company controls, tracks, and reviews business expenses so spending stays in line with company policies and financial plans. Today, it goes beyond post-spending expense reports, capturing costs earlier and giving finance teams clearer control over approvals and review. 

Core expense management areas include:

• Expense tracking and categorization: Recording expense data as spending happens and organizing it for analysis

• Expense reporting: Converting tracked employee expenses into clear, review-ready reports

• Expense reimbursement: Paying employees back accurately and on time after approval

• Expense approvals and policy enforcement: Applying controls to maintain policy compliance before payments go through

• Audit readiness and oversight: Keeping records clean and accessible so finance teams can review spend with confidence
  
  

Taken together, these pieces provide greater spend visibility and tighter control over day-to-day spending.

Where traditional expense management fails

According to Autorek’s 2024 survey, 84% of payment companies still mostly depend on manual reconciliation processes. But even when teams move over to automated workflows and expense management software tools, many find themselves struggling with the same issues:

• Most tools focus on cleaning up company expenses after the fact.

• Many platforms lack a complete view of spending to support informed decisions.

• Manual workflows are still the norm, even within software.

Below is a breakdown of the main issues finance teams face when relying on conventional expense management.

Reactive vs. proactive spend control

Most expense management systems step in only after expense reports reach finance teams. That timing creates an immediate risk: money has already gone out, even if the spend shouldn't have occurred. 

This scenario is common. According to Skift and Navan’s 2024 State of Travel and Expense report, 41% of managers say employee expense policy compliance falls below 75%. Applying proactive spend controls can prevent many of these exceptions by making policies visible before purchases are made. 

Reconciliation adds another layer of risk, as errors in expense submissions or approvals require corrections, follow-ups, and manual work. Payhawk’s 2024 report shows that 28% of organizations lose substantial time to reconciliation—time that could be better spent improving forecasting and proactively managing spend.

Limited visibility into purchasing decisions

According to Payhawk’s report, 22% of organizations have limited real-time visibility into company spending. Without this insight, finance teams may know how much money was spent but not the details of the purchases themselves.

When finance can’t confirm whether providers were approved or purchases were accurate, spend totals lose credibility. That uncertainty forces them to treat reported numbers as provisional, making it harder to set reliable budgets and forecast future costs.

High exception rates and manual work

Even though tools promise automation, many organizations continue to rely on manual processes. In fact, Rho’s 2024 report shows that just over 70% of employees still submit expenses manually, often using paper receipts, spreadsheets, or manual data entry. 

These manual workflows introduce avoidable mistakes. Payhawk’s 2024 report identifies human error as the top spend management challenge for organizations, largely because finance teams must spend time chasing details, fixing errors, and reconciling records.

On top of that, many errors trigger expense exceptions that the system can’t approve automatically. Each exception adds another pause and another round of follow-up, turning routine review into time-consuming cleanup.

3 modern expense management best practices

Most solutions frame modern expense management around speed: faster approvals, quicker reimbursements, and more automated workflows. Speed matters, but it doesn’t address the predictability challenges of reactive expense management. 

Because finance teams want fewer surprises, cleaner data, and spending they can trust in budgets and forecasts, the best practices below focus on governance and control—not just processing efficiency.

1. Shift control upstream to purchasing

Expense management processes work best when they begin before money leaves your business. Instead of reviewing expense reports after the fact, aim to apply controls during purchasing. 

By guiding employee spending at the point of purchase, you can reduce out-of-policy spend and avoid unnecessary reimbursements altogether. This shift gives you earlier control over where your money goes, making it easier to manage budgets and forecast spend.

2. Reduce manual reconciliation and exceptions

Manual processes create errors, and errors create exceptions. This cycle leads to more time correcting issues and less time reviewing spend. 

Reducing manual steps in expense processes lowers exception rates, which results in fewer follow-ups, cleaner closes, and more reliable expense data. Over time, this allows you to focus on analysis and decision-making rather than reconciliation.

3. Design policies that employees can follow

Strong expense policies only work when employees can realistically follow them. Rules that are overly complex or disconnected from how people actually spend lead to mistakes—not because employees are careless, but because the policies don’t map to real situations. Those mistakes slow approvals and create back-and-forth for finance teams.

Effective policies start with understanding real spending patterns, including common purchase types, typical price ranges, and approved suppliers. Once your policies reflect reality, you can embed them into intuitive approval workflows with timely notifications. 

By combining realistic policies with everyday approval workflows, you can guide employees to make compliant choices with minimal friction, streamlining policy compliance without complicating the user experience.

Evaluating expense management solutions

Choosing the right expense management software comes down to control—specifically, how early and how consistently you can influence spending. 

To evaluate solutions effectively, focus on the fundamentals below. They show whether a system fits your existing environment, scales with your governance needs, and helps you manage spend.

Integration with procurement and purchasing systems

An expense management system only works if it fits into your broader finance stack. When tools don’t integrate with procurement, purchasing, and accounting software, finance teams end up filling the gaps manually.

Poor integration typically leads to:

• Re-entering the same expense data across systems

• Reconciling mismatched records after the fact

• Relying on spreadsheets to connect purchasing and expenses
  
  

Strong integration keeps expense data consistent from purchase through approval and payment. That continuity reduces manual data entry, improves accuracy, and gives you a comprehensive view of employee spending.

Scalability, governance, and control

As your company grows, your expense management system must scale with it. More employees, entities, and spend categories add complexity, and you need controls that adapt without slowing teams down.

Scalable systems allow you to:

• Update expense policies as teams, regions, or roles change

• Support multiple entities or cost centers in one system

• Adjust spending limits and approval workflows as oversight needs evolve

• Maintain clear audit trails for approved expenses
  
  

Without this flexibility, policies can fall out of sync with how people actually spend. Finance teams often respond by adding manual reviews and workarounds, which slow approvals and increase exceptions.

Ability to support proactive spend management

Proactive spend management depends on visibility. To influence spending before it becomes an expense, you need to see purchasing activity as it happens and understand whether it aligns with budgets and policies.

When evaluating solutions, look for capabilities that support early control, including:

• Real-time visibility into purchasing and committed spend

• In-context guidance that steers employees toward compliant choices

• Clear notifications that flag potential issues before approval

• Reduced reliance on reimbursements by managing spend up front
  
  

Together, these features can help you act on spend earlier, make more informed decisions, and maintain tighter control over costs before they reach the ledger.

Amazon Business complements expense management

Amazon Business doesn’t replace your expense management system. Instead, it works alongside it by shaping spending before purchases become expenses that need review, correction, or reimbursement. That shift reduces downstream exceptions and lightens the load on existing expense workflows.

Here’s how Amazon Business helps before expenses ever exist:

• Centralize everyday purchasing: Routine buying flows through a single business account, keeping purchases in one place and reducing off-channel spend that later creates reconciliation gaps.

• Capture the right data at checkout: Administrators can require business order information, such as cost centers or GL codes, during checkout. Buyers enter this information up front, so finance teams don’t have to chase missing details after the fact.

• Improve reconciliation and close accuracy: Order-level data flows into Amazon Business Analytics, giving finance teams a centralized view to compare orders with invoices or card charges and resolve mismatches quickly. Cleaner, more complete data reduces errors and rework during close.

• Reduce reconciliation workload and expense complexity: Consolidated purchasing and payment options, such as Pay by Invoice, reduce the number of transactions finance teams need to review. Fewer invoices and charges help speed up reconciliation and simplify month-end close.

• Reduce reliance on reimbursements: Employees purchase directly through the business account rather than paying out of pocket. That lowers reimbursement volume and removes a common source of policy exceptions.

• Support three-way matching workflows: For invoice-based purchasing, teams can track the receipt of goods so purchase orders, invoices, and receiving records align. This supports automated three-way matching and helps ensure accuracy, compliance, and timely payment.

• Give finance earlier visibility into spend: Spend data is available as purchases happen, rather than weeks later through expense submissions. This enables more accurate budgeting, forecasting, and cost allocation.

• Guide compliant purchasing decisions: Guided Buying (a Business Prime feature) and approval controls surface preferred items and sellers during the shopping experience, helping employees make compliant choices without extra training or review cycles.
  
  

Integrating Amazon Business with your expense management system can help your finance team encounter fewer exceptions and less downstream complexity. Expense platforms still handle reviews, reimbursements, and accounting, but with Amazon Business guiding purchases up front, fewer issues arise in the first place.

Expense management starts before the expense

Real control over company spending can’t start with an expense report. Control needs to happen earlier, at the point where employees decide what to buy and how to buy it. 

When you influence purchasing decisions up front, you see far fewer policy violations and late-stage corrections. Spending data stays clean from the start, giving your finance team numbers it can actually trust.

To take control of spend before it becomes an expense, contact us to see how Amazon Business guides purchasing decisions, improves visibility, and simplifies downstream expense management.