What kind of discipline is “expense management” actually? Well, said in a few words, the term refers to the process of handling and controlling employee-initiated business expenses.

TL;DRExpense management covers the full process of handling and controlling all employee-initiated business costs, from the road-based salesperson's travel expenses to the office-based marketer's software subscriptions. Acubiz explains that beyond efficiency, companies must manage expenses correctly to comply with bookkeeping documentation requirements, and that a clearly defined process is the foundation for doing both.

All types of businesses have these kinds of costs, obviously with variation in terms of volume and types of expenses. In other words, all businesses have a requirement, to a varying degree, for managing employee expenses.

In addition, there are also a few basic legal principles related to bookkeeping and accounting that a business needs to comply with, if the costs are to be carried on to the debit side in the books. Obviously, I am talking documentation requirements towards receipts that needs to be stored for the auditors.

Read on and get the overview as well as a couple of tips on how to get a proper grip around the expense process.

Types of expenses

Some employees hold very few business-related expenses during a year. Others, on the contrary, have numerous expenses on a weekly basis.

It is typically applicable for employees with frequent travel activity or regular customer and client visits, that the weekly expenses for transportation and food often emerge as a necessity for the employee to carry out his or her job. The classic large post is therefore often travel expenses.

However, often we also see that more stationary based employees, to an increased extent, hold expenses, that can benefit from being handled through a clearly defined process. This could for example apply to employees in the marketing department, who are using credit cards to buy software, ads and content elements (like graphics and stock photos) on a subscription basis.

The above is just a few examples, because basically, the expense management discipline is about keeping track on and getting insight into ALL the expenses that your employees create when they do their daily jobs.

Process, process, process

Process and workflow are the two subjects that we constantly missionize at Acubiz. These make up the critical foundation that is needed to get to the point, where you really master the expense management discipline.

The process is about all the tasks involved from registering expenses to approval, controlling and accounting. Policies and rules around expenses, that your organisation might or might not have defined, is also a part of the process.

If your ambition is to achieve the black belt in the discipline, then you need to start with the process. Map how you work today and draw up how you want to work tomorrow. It is usually a good idea to get qualified input on this part.

Digitization

Every organisation has some sort of process for managing employee-initiated expenses. It is just a question whether the process is well defined and well implemented. It is also a question whether it is analogue and manual or digital and automated.

At the same time, it is not unimportant what tools you have got in place to support the process. There are still many businesses that solve the tasks around expenses manually or pseudo-digital. Let me be clear, there are several of challenges related to this.

Digitizing the process around employee expenses and the related tasks is a no-brainer. The process is highly fit for digitization. The most notable benefit is massive time savings, that will come in handy for both the employees/users, the managers/approvers, the finance department and the business in general. This creates a solid foundation for raising productivity.

A digital travel expense solution will also provide increased control and insight into the spend patterns in your organisation. You will also secure a higher level of compliance towards company policies and rules related to expenses.

On the other hand, your business might already have digitized the process – either fully or partly. However, this does not necessarily mean that your organisation master the art of managing expenses to full extent.

There are many tools out there that only provide limited functionality and are not founded in a solid process understanding. It can for example be tools supplied by credit card providers or tools that comes along with your enterprise resource planning – or salary system.

Make sure that you uncover the market thoroughly before you decide on a tool.

Why should you put an effort into the expense management process?

Sure, your business already has some sort of a process related to expenses. Then you think, “it works how we do things today…” or “it probably does not yield that much if we do something about it…”. Sorry, but I must stop you here. Fact is that you can harvest significant benefits, if you lead your organisation to be best in class in this discipline.

One thing is the time savings that both users and the finance department will achieve. Another thing is the data that will be at your disposal. It will help you gain much more insight into the organisations spending behaviour. In addition, it will also allow you to influence and change your employees spending patterns through effective control mechanisms.

Many suppliers within the dominant expense categories often work with dynamic price regulations to maximize profit. Look at a category like petrol and gasoline. Let us say that a few days ago, at a gas station off the highway, I refuelled my car with diesel at DKK 8,72 per litre. Shortly thereafter I passed a gas station on the highway where the price was DKK 10,89 per litre. That’s almost a 25 % difference!

Hotel rates is another example where big fluctuation is seen. Obviously, many organisations sign business agreements with vendors in these categories, but that does not equal lowest prices compared to the daily rates across the market.

At Acubiz, we praise the principle that goes like this, “spend company money the same way as if they were your own”. This means, that employees must have knowledge about the various agreements in order to act differently, and it is of course a management-decision whether this is allowed.

What if you could obtain such a deep insight into your business’ spend categories, that you easily can benchmark against actual price levels in the market? And what if you could steer your users according to this knowledge? Or maybe even better, what if you could bring this knowledge to the table, next time you or your procurement manager is negotiating fuel –, hotel – or other supplier agreements?

So, why should you invest in streamlining your employee expense process? Well it’s all about common sense!

Acubiz can be helpful with this! Contact us to hear more about how we can help you get the full overview with a solution from Acubiz.

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Frequently Asked Questions

What does expense management actually cover in a business context?

Expense management covers the full process of tracking, documenting, approving, and bookkeeping all employee-initiated business costs. This includes travel and accommodation, meals, mileage, company card purchases, software subscriptions, and any other cost an employee incurs while doing their job. The discipline applies to all companies, regardless of size, with volume varying by industry and employee role.

Which employees typically generate the most expenses?

Employees with frequent travel activity or regular client visits tend to generate the most expenses: transport, accommodation, and meals appear on a near-weekly basis. However, office-based employees in functions like marketing also generate significant expense volumes through recurring subscriptions, digital advertising, and content purchases made on company cards.

What are the legal requirements for managing employee expenses in Denmark?

Companies must maintain documentation for all business expenses to carry them as deductions in the accounts. This means receipts must be collected and stored for five years from the end of the relevant financial year. The new Danish Bookkeeping Act, applying from 2024, requires this documentation to be stored digitally rather than in physical form.

What is the most important element of a good expense management process?

A clearly defined and consistently enforced workflow. This means employees know exactly how to register and submit expenses, approvers have clear criteria for what to approve, and the finance team receives correctly documented submissions that do not require follow-up. Without a defined process, each step introduces delay, error, and compliance risk.