How to track business expenses in 2025: A step-by-step guide

Tracking business expenses is more than just stuffing receipts in a shoebox and manually updating a spreadsheet. So much more. At its core, expense management is the overall process that organizations use to review, reimburse, and record the work-related purchases of their employees. The key to doing it right is precise business expense tracking. It’s the best way to reduce costly errors, maintain legal compliance, and eliminate cumbersome and time-consuming manual tracking methods.

Modern software solutions simplify the process by automating and streamlining expense tracking and management. In this guide, you’ll discover how to track your business expenses effectively. We’ll explore the key steps, benefits, and top expense tracking software options for businesses of all sizes.

What is business expense tracking?

Business expense tracking is a straightforward process that monitors, records, and manages company expenditures. Its primary purpose is to provide transparency, accountability, and compliance with financial laws and regulations. This process helps organizations monitor spending and keep accurate books, which are essential for budgeting, future planning, and fulfilling tax responsibilities.

The key steps involved in the expense tracking process include:

• Maintaining receipts and invoices for all transactions
• Recording the purpose of each expense 
• Ensuring expenses align with company spend policies
• Mapping expenses to your general ledger for accurate reporting
• Consistently updating financial records to show current cash flow, spending and budget status

What is expense tracking software?

Expense tracking software is a digital solution that helps businesses monitor, manage, and categorize expenses. But it offers much more. It helps companies manage spending by automating financial workflows and providing reporting and real-time analytics. Advanced tracking software integrates with existing accounting software and systems to provide a clear view of company spending. Expense tracking software works by automating data capture and calculations, reducing errors, and improving compliance with internal policies and federal and state regulations. 

Unlike complex and inefficient manual processes, modern tracking software includes features like automatic company policy checks, expense categorization, record trails and audit logs, smartphone and mobile device accessibility, and more. Read on for more details on the benefits of expense tracking software.

6 benefits of business expense tracking 

Knowing where your money goes is critical for your company’s financial health and enhancing operational efficiency. Let’s take a closer look at the benefits of business expense tracking: 

Simplifying tax preparation

Tracking business expenses simplifies tax preparation by recording tax-deductible expenses accurately and making this data accessible. With increased accuracy, you can claim the full amount of the tax deductions you’re eligible for, reducing your tax bill while speeding up the process.

Identifying financial drains

Carefully tracking your organization's expenses makes it easy to pinpoint areas of overspending and unnecessary expenditures. This enables you to identify areas of waste and take steps to reduce or eliminate them, resulting in better budget management. 

Controlling company spending

Business expense tracking solutions allow organizations of all sizes to establish and enforce spending policies automatically. This helps you rein in costs and allocate your financial resources strategically.

Separating personal and business expenses

Doing your books can be a nightmare if company and personal expenses are mixed together. By accurately tracking expenses, it’s far easier to figure out which is which. Otherwise, you risk combining ineligible spending with legitimate business expenses. This can violate company policy and lead to compliance issues and tax implications. 

Sustaining long-term profitability

By tracking expense data accurately, organizations gain a clear view of financial outlay and can make informed decisions that support long-term profitability. Budgets are easier to balance, and you can identify wasteful spending and allocate your resources where they maximize value and return. 

Enhancing cash flow management

Modern expense tracking gives you real-time insights into your cash flow, helping you manage your liquid assets more effectively. This ensures that company funds are there when needed, avoiding cash flow issues and negative impacts on your business.

How to keep track of business expenses: 6 steps

Keeping track of business expenses is critical for keeping tabs on your spending, maintaining a clear view of your organization’s finances, and complying with company spending policies and federal and state law. Staying organized from the beginning is key to successful expense tracking. Whether by manual means or using modern software solutions, these are the essential steps in tracking business expenses: 

Step 1. Set up a business bank account

Many small businesses, startups, and sole proprietors make the mistake of combining personal and business finances. This often ends in a nightmare, with you pouring over receipts and trying to figure out which is a legitimate business expense and which isn’t. The IRS will want to know, too. Setting up a separate business bank account will make tracking and managing business expenses far easier. 

Step 2. Select the best business credit card

Choosing the best corporate business credit card for your company can simplify expense tracking and provide rewards or benefits tailored to your needs. Look for options that offer in-depth reporting and can integrate with popular expense tracking and management platforms.

Step 3. Implement expense tracking software

Utilizing expense tracking software automates submitting, approving, and reimbursing expenses. Modern platforms can easily integrate with accounting software and other business-related systems, reducing manual effort and increasing compliance with company policies. Integration boosts reporting by connecting all of your data. The result is in-depth data that helps you make strategic business decisions. 

Step 4. Establish an expense policy

Developing a comprehensive expense policy that outlines how employees can spend company funds ensures that expenses align with business objectives and are properly documented. Expense tracking software can enforce business spend policies automatically, preventing excess spending and fraud. 

Step 5. Keep track of receipts

Maintaining accurate and organized receipts is essential for verifying business expenses, both internally and with federal and state tax authorities. You can easily streamline this step using digital tools that automate receipt management.

Step 6. Regularly document expenses

Regularly documenting your expenses helps ensure that all spending is accounted for and mapped to your general ledger (GL) for optimized accounting and financial reporting.

Best ways to keep track of business expenses: 4 methods

You have several options for tracking your business expenses. Effective tracking and management is more than just recording transactions. You need a systematic approach to categorize, analyze, and take control of your business spending. With the right strategy, you can simplify the process while reducing errors and gaining actionable insights into spending patterns. If you’re wondering what the best method is for your situation, we’ve put together a list of the best methods to track business expenses.

Using expense tracking apps and software 

Expense tracking apps and software are designed to automate and optimize tracking and managing business expenses. These tools let your employees report their expenses directly through the platform. The system then routes the claim through an automated approval process that flags errors and enforces company spending policies. Expense tracking software typically includes receipt scanning, mileage tracking, and integration with popular accounting systems. This integration gives you real-time insight into company spending. You can easily visualize spending patterns, giving you the necessary information to make informed budgeting decisions.

Maintaining a business expense spreadsheet

While they may be seen as quaint relics of the past, properly structured business expense spreadsheets can still provide spending oversight with limited analysis. Spreadsheets are customizable, allowing them to be tailored to specific situations and businesses. They’re cost-effective and relatively easy to use, but they rely on manual data entry, which is highly susceptible to input errors. Even with time-consuming double-checking, mistakes can still occur and cause big headaches. Business expense spreadsheets require regular audits to ensure accuracy and compliance with company spending policies and tax regulations. 

Scanning and storing digital receipts

Scanning and storing digital receipts is a common feature of modern expense tracking platforms. These tools enable businesses and their employees to digitize receipts, automatically process them, apply company spending policies, and store them securely. This method reduces clutter (and shoeboxes), makes certain that tax requirements are met, and provides on-demand access to receipts if required for auditing. Unlike physical receipts, a digital receipt can’t be lost or damaged. This helps ensure you have a digital trail of all your expenses.

Conducting regular expense audits

Regular expense audits are essential for identifying discrepancies, ensuring compliance, and optimizing expense management processes. This step involves analyzing spending trends to make strategic financial decisions and adjust policies as needed. However, this isn’t really a stand-alone task. While audits foster transparency, catch mistakes, prevent fraud, and provide actionable data, they are only one part of tracking business expenses. The best solutions combine easy tracking, automation, digital storage, and audits.

7 best business expense tracking software

Effective business expense tracking is essential for maintaining financial control and optimizing budgets. In this section, we’ll compare the leading software solutions, exploring their key features and drawbacks, helping you find the best fit for your business. 

1. Rippling Spend

Rippling is an all-in-one platform that unifies HR, IT, and Finance into a single system, paving the way for time-saving automations that help businesses manage their workforce. Rippling's advanced policy engine and customizable workflows enable you to create custom rules and automate tasks, saving time and reducing manual effort. 

Rippling's spend management software consolidates all of your company’s finances—from payroll and benefits to corporate cards and expense management–giving you an up-to-date view of cash flow across your company and offering unprecedented control over spending patterns. 

Pros:

• Easy-to-use expense tracking
• Customizable policies for spending control
• Automated management of tedious tracking tasks
• Simplified report creation with templates

Cons: 

• Learning curve for certain features

2. FreshBooks

FreshBooks is a cloud-based business accounting software solution. FreshBooks is tailored to small businesses and those who are self-employed, helping them manage and track business expenses efficiently. FreshBooks features include invoice and payment processing, automated expense tracking, time tracking, comprehensive analytics and reporting, a mobile business expense tracker app, scalability, and integration.

Pros:

• Capture receipts easily
• Import transactions from bank accounts
• Generate reports for spending insights

Cons: 

• Limited report customization
• Clunky interface
• High cost for some businesses

3. QuickBooks

QuickBooks Online is a cloud-based accounting software solution that helps small businesses manage their accounting, income, expenses, and payroll. Features include various accounting tasks, including invoicing, expense tracking, and financial reporting.

Pros:

• Efficient receipt management and reporting
• Seamless integration with hundreds of popular apps
• User-friendly and intuitive interface 

Cons:

• Lack of corporate credit cards, adding complexity to account reconciliation
• Limited advanced features
• High cost for some users

4. Expensify

Expensify is an easy-to-use financial management tool built to streamline the expense tracking and reimbursement process. Expensify has multiple features that simplify expense tracking and management for employees and managers. Expensify integrates with other accounting software, making it an excellent choice for most businesses.

Pros:

• Single-click receipt capture to eliminate manual data entry
• Custom approval workflows
• Global reimbursement feature for cross-border payments

Cons: 

• Lack of functions on lower-tiered plans
• Mixed experiences with customer support 
• Unsuitability for some organizations

5. SAP Concur Expense

SAP Concur Expense is an business expense tracker and management platform that simplifies and automates the expense process. The cloud-based platform provides businesses with enhanced spending visibility, helping reduce costs and increase compliance. Concur Expense offers a comprehensive spend management solution for any business. 

Pros:

• Automated expense capture from multiple sources
• Analytics and reporting for real-time insights into spending trends
• Automated expense reporting and faster employee reimbursements

Cons:

• Complexity for smaller businesses
• Expensive for some users
• Complex setup and configuration 

6. Zoho Expense

Zoho Expense is a cloud-based solution for small businesses looking to simplify their expense tracking and management. Zoho Expense offers a variety of features aimed at streamlining expense tracking, reporting, and reimbursement. Zoho Expense is a good choice for small businesses thanks to its user-friendly interface, cost, and functionality.

Pros:

• Automated receipt scanning
• Custom expense policies
• Comprehensive analytics

Cons: 

• Integration issues with some third-party tools
• Learning curve
• Limited travel expense management across all plans

7. Brex

Brex is a popular spend management platform that combines corporate credit cards, expense tracking, and accounting automation into one integrated system. Brex helps companies simplify and control their business spending with several features, including customizable expense policies, automatic receipt scanning, and accounting software integrations. 

Pros: 

• Local expense policies and compliance
• Support for multiple currencies
• Travel booking shortcuts

Cons: 

• Some issues with identifying certain receipts
• Customer service issues
• Additional costs for advanced features

Streamline business expense tracking with Rippling

As we’ve seen, business expense tracking and expense management go hand-in-hand. While many tracking, reporting, and expense management tools can save companies time and simplify business expense tracking and management processes, they typically aren’t connected with the rest of your company’s finance systems. 

With Rippling’s expense management software, all of your company spend—expense reimbursements alongside vendor bills, payroll, and corporate cards—are together on one intuitive platform. This gives you unprecedented control and visibility over spend. With Rippling, you can create customizable reports, approval chains, and policy enforcements.

Since Rippling uses employee data to connect finance with the rest of your workforce management processes, company expense management policies will automatically apply to new employees as soon as they onboard and automatically adjust if they ever change roles.

With Rippling you get: 

Automation and policy enforcement: Rippling's advanced policy engine allows you to create hyper-custom policies based on vendor, dollar amount, and expense category. This ensures that out-of-policy expenses are automatically flagged for review, reducing errors and enhancing compliance.

Corporate cards with real-time policy enforcement: Rippling's corporate cards proactively block non-compliant spending in real-time, ensuring that company policies are enforced automatically. Rippling's policy engine can also be configured to lock employee cards if they haven't submitted receipts for a specified number of transactions. This ensures that all expenses are properly documented and compliant with company policies. These cards offer leading cashback rewards, providing financial benefits while maintaining control over spending.

Automated general ledger syncing: Rippling seamlessly integrates with your accounting systems, automatically syncing expenses to your general ledger. This feature saves time on bookkeeping by categorizing transactions accurately and efficiently.

Vendor mapping and automatic receipt capture: Rippling's system can automatically match receipts to transactions, making it easier to manage expenses and close the books faster. This feature also includes reminders for employees to submit receipts, ensuring timely compliance. 

Accuracy and compliance: By automating expense reporting and approval processes, Rippling reduces manual errors and ensures that all expenses are accurately recorded and compliant with company policies. This not only saves time but also provides a clear, real-time view of company spending. 

What's more, if your company has an international presence or eyes global expansion, Rippling lets you reimburse employees around the world in their local currency—all while reviewing transactions in your native currency.

Rippling Spend offers a robust and integrated solution for managing business expenses, providing unparalleled control, accuracy, and compliance.

How to track business expenses FAQs

How do small businesses track expenses?

Small businesses use a variety of methods to track expenses. Some rely on manual tracking, while others use automated methods. Manual processes using paper receipts and spreadsheets can be time-consuming and error-prone. Many small businesses have switched to automated expense tracking and management software. Software solutions automate and simplify the process. They integrate with accounting software systems, enable employees to upload receipts from their mobile devices, and streamline expense reporting and approvals. Expense tracking software reduces manual errors, expedites reimbursements, and provides data-driven insights into spending.

What is the best small business expense tracker?

We’ve mentioned some top-notch options above. However, the best solution for small business expense tracking depends on factors like your specific needs, the size of your business, scalability requirements, and more. Also, consider integration with existing systems, user-friendliness, and the automatic enforcement of company spending policies. Do you need a system with analytics and reporting? At the end of the day, the best solution is one that fits your business’s needs now and can grow with you in the future. 

How to calculate business expenses?

To calculate business expenses you must gather and categorize expenditures related to running the business. Collect the relevant paperwork (e.g., receipts, invoices, statements) to identify your expenses. This includes business costs like salaries, rent, travel, and supplies. Separate the expenses into categories (e.g., operating expenses, capital expenditures). Input this information into your spreadsheet or software platform. In the case of manual methods, be sure to double-check all figures and calculations. Errors can result in compliance issues with state and local tax laws. Take time to review your numbers to keep on top of your financial health and when making significant business-related decisions. 

How can a sole proprietor keep track of business expenses?

To effectively keep track of income and expenses, start by setting up a business bank account, securing a corporate credit card, and implementing a business expense tracker. The tracker helps categorize spending, store invoices, and assist you in identifying potential tax deductions. Sync your bank account and corporate credit card with the business expense tracker to automate expense monitoring and ensure accuracy. Regularly reviewing your business expenses keeps your finances organized and simplifies tax season.

This blog is based on information available to Rippling as of March 21, 2025.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.