Business Expense Management: Guide for Automated Reporting

Most finance teams can tell you that managing expenses rarely involves a single reimbursement. It’s about staying ahead of costs, catching errors early, and keeping the business moving. The stakes for companies running Microsoft Dynamics 365 are higher because so much depends on real-time accuracy. That’s where automation can change everything.

This guide explains the modern approach to business expense management, why it matters, the risks of doing it manually, and how to streamline every step using automation that works natively inside D365.

Key highlights:

• Expense management is critical in financial control, audit readiness, and team member satisfaction.
• Manual entry means chasing receipts, double-checking codes, and waiting days for approvals that should take minutes, creating blind spots across departments.
• Embedded automation ensures policies are applied, data stays current, and finance teams have the clarity to make timely, informed decisions.
• Using a tool like ExFlow brings that automation directly into D365, eliminating friction between process and platform.

What Is Expense Management?

Business expense management is the process of tracking and controlling employee and operational spending costs, such as travel, meals, software, and vendor payments.

The process ensures that expenses:

• Follow company policy
• Are approved appropriately
• Get reimbursed or paid on time
• Are accurately recorded in financial systems
  

Historically, this meant chasing docs, filling out spreadsheets, and managing email chains. But, as companies scale, manual workflows create bottlenecks, errors, and compliance risks.

Many organizations, however, are turning to expense automation — especially inside accounting software and ERPs like Microsoft Dynamics 365 Business Central — to streamline management.

Why Enterprise Expense Management Is Important 

For growing enterprises, managing business expenses isn’t just about paying people back. It’s also a way to safeguard profit margins and maintain complete financial control at scale.

Even small inefficiencies — like duplicate submissions or missing receipts — can add up quickly without a transparent process. These gaps lead to overspending, slow down reporting, and make audits harder than they need to be.

A structured approach to tracking expenses helps:

• Protect cash flow by keeping spending visible and predictable
• Enforce policy with less manual oversight
• Reduce friction across finance, procurement, and operations
• Improve accountability with approval history and real-time data

As businesses evolve, managing expenses becomes more complex. Embedded expense tracking within an ERP like Dynamics 365 gives finance teams the structure they need without introducing extra tools or integration headaches.

The Biggest Challenges with Managing Business Expenses

Even in well-established organizations, employee expense management often remains one of the least optimized workflows in finance. As spending becomes more decentralized and employee-driven, the cracks in legacy systems and manual processes show.

Four of the most persistent challenges are:

1. Manual entry and reconciliation: Disconnected tools and workflows lead to errors and inconsistent reporting. As a result, finance teams spend more time managing exceptions than driving strategy.
2. Lack of a current expense policy: According to the Center 2024 Trends Report, only 39% of companies have a written, up-to-date expense policy. Without a clear framework, compliance becomes reactive instead of automatic.
3. Too much time spent on reporting: Mesh Payments found that 78% of employees say the expense reporting process takes too long. When teams are stuck chasing payment info or fixing errors, it drags down productivity across the business.
4. Exposure to AP fraud and noncompliance: SAP Concur reports that 44% of global finance teams know someone who’s experienced AP fraud in the past three years. Without centralized controls, duplicate submissions and out-of-policy spending are harder to catch.

What these challenges have in common is fragmentation: too many steps, tools, and touchpoints. The result? Finance teams lose visibility, employees get frustrated, and strategic planning suffers.

Why It’s Time to Rethink Manually Managed Expenses

Managing expenses still means spreadsheets, emails, and scattered approvals for many finance teams. While these methods might feel familiar, they quietly introduce risk, drain resources, and limit visibility, especially as businesses grow and costs become more decentralized.

Manually managing expenses can cause:

• Delayed approvals: Expenses sit in inboxes without a structured, dynamic approval workflow. As a result, vendor payments get pushed back, and employees wait longer to be reimbursed.
• Inconsistent records: Manual entry leads to invoice coding errors, missing receipts, and unclear approval history, creating problems during audits.
• Wasted time on reconciliation: Finance teams spend hours matching credit card statements to expense reports line by line.
• Reduced strategic focus: When your team is tied up following up or resolving mismatches, there’s less time to focus on budget planning, cost analysis, or identifying savings opportunities.

An optimized business expense manager actively reclaims capacity for your teams. Automating core workflows allows accounts payable to shift from task execution to strategic enablement, especially in complex, multi-entity environments.

Types of Expense Management Tools 

Not every expense management system is built the same, and for enterprise teams, the difference matters. How a tool fits (or doesn’t fit) into your existing financial environment can directly affect data accuracy and reporting speed.

Here’s a breakdown of the most common expense tool categories:

Expense Management Tool Categories	How the Tools Work
Manual Systems	Use spreadsheets, email, and paper receipts, though these are inefficient and prone to delays, errors, and poor visibility.
Standalone SaaS Platforms	Offer automation, receipt capture, and approval workflows outside your ERP, limiting control over how you record expenses in the general ledger (GL).
Bolt-On Integrations	Bridge external tools with platforms like Microsoft Dynamics 365, but require IT support, additional licensing, and ongoing maintenance.
Embedded ERP-Native Tools	Purpose-built to run inside your financial system. Everything stays in one system — including audit trails, coding dimensions, and compliance checks.

How Embedded Expense Management Solutions Benefit Enterprises

For finance teams using Microsoft Dynamics 365, how expense management tools integrate with your ERP isn’t just a technical detail​​ — it’s a strategic decision. Embedded solutions are built to run directly inside your ERP, and unlike standalone apps or bolt-on integrations, they don’t require syncs, connectors, or data handoffs between platforms. 

Integrated solutions offer:

• Stronger Data Integrity: Since data is no longer pushed or pulled between systems, the risk of mismatches, duplication, or version control issues disappears.
• Simplified Workflows: Sign-offs, coding, and policy checks happen in the same system your team already uses, reducing context switching and training time.
• Faster Close Cycles: Expenses are coded correctly from the start and posted in real time, helping accelerate reconciliations and month-end expense management processes.
• Built-In Compliance: Because all activity happens in one system, it’s easier to enforce policy, trace actions, and support audits without extra documentation.
• Less IT Overhead: No middleware to maintain, fewer troubleshooting integration points, and no reliance on external APIs or vendor-managed syncs.
  

Tools like ExFlow for Business Central offer a cleaner, more scalable way to manage business expenses. Instead of adding another system to manage, you get the features you need, right where your financial data already lives.

D365 Expense Management: Finding the Right Solution

The right expense management software enables Microsoft Dynamics 365 to do more than automate reimbursements. It needs to enhance control, reduce manual overhead, and scale with your finance operations. Here’s what to look for when evaluating a solution built for D365.

Native Integration

Embedded expense tools don’t sit on top of D365, they run inside it. That means no external connectors, no syncing delays, and no risk of working from outdated data. Finance teams stay in one system from submission to GL entry.

Key benefits:

• Real-time access to financial data
• No duplicate entries or integration gaps
• Simpler audit preparation

Automated Coding and Validation

Manual coding is one of the most error-prone parts of the expense process. Automating GL assignment and field validation helps ensure data entry is accurate from the start, keeping your financial records clean and your month-end work lighter.

Look for:

• Smart, rules-based GL and dimension coding
• Validation of required fields before approval
  Reduced rework at month-end

Configurable Approval Workflows

Invoice approval workflows should reflect how your business operates, not what your software dictates. A flexible software engine allows you to route expenses based on real org structure and policy logic, adapting quickly as teams or thresholds change.

What to expect:

• Multi-level approvals based on roles, departments, or thresholds
• User-friendly mobile apps and email-based approval options
• Clear escalation paths to prevent bottlenecks

Policy Enforcement and Audit Readiness

A written policy doesn’t do much if it’s not enforced. Built-in rules should catch out-of-policy expenses before they reach finance, while a full audit trail makes it easy to track who approved what, and why.

Critical features:

• Automated flagging of out-of-policy submissions
• Receipt and documentation checks are built in
• Full activity logs for audit support

Real-Time Reporting

Growth shouldn’t come with more complexity. A strong expense management solution supports enterprise requirements — from multi-entity environments to changing tax rules — and provides responsive support to help your team focus on higher-value work.

Essential capabilities:

• Live dashboards and category breakdowns
• Spend tracking and reporting by team, project, vendor, or expense category
• Exportable reports for forecasting and variance analysis

Scalability and Support

Your finance operations will evolve — your expense tool should grow with them. A solution built for enterprise use should handle global complexity without slowing you down.

Must-haves:

• Multi-entity, multi-currency support
• Ongoing updates aligned with the Microsoft roadmap
• Vendor support that understands D365 architecture

Unlock Better Insights with Automated Expense Reporting

Most businesses automate expenses to speed things up, but the real payoff is what automation enables. With structured, real-time data flowing through your ERP, finance teams gain visibility that supports more thoughtful decision-making, not just faster processing.

Automated financial reporting provides:

• Up-to-date visibility of expenses across teams 
• Better forecasting and budget alignment
• Faster audits and stronger accountability
• Actionable dashboards and alerts

When reporting lives inside Microsoft Dynamics 365 — not in a disconnected platform — every insight ties back to the source of truth: your financial system.

Optimizing Your Automated Reporting Strategy

Automated reporting is only as valuable as what you do with it. Building the right reporting framework ensures your finance team gets visibility and clarity.

Here’s how to get more from your reporting stack:

• Tailor Your Reporting: Break down spending by department, project, or vendor to uncover patterns and quickly catch inefficiencies.
• Set Real-Time Alerts: Use automated triggers to avoid budget limits, policy violations, or unexpected spend spikes.
• Continuously Review the Process: Build monthly check-ins into your process to catch overspending early and adjust before it snowballs.

When automated expense reporting is treated as a strategic asset, it helps teams move faster and stay aligned, without trading control for speed.

Best Practices for Smarter Employee Expense Management

Effective expense management is about more than policy enforcement. It’s about building systems people can follow, processes that scale, and visibility that empowers decision-makers. These five best practices help finance teams create consistency, improve accountability, and support smarter spending at every business level.

Let’s review the five best practices every finance team should follow:

1. Start with a Clear Written Policy

Employees can’t follow rules they haven’t seen. A strong expense policy should outline what’s reimbursable, set category limits, and define what documentation is required. It should also be easy to find and understand, not buried in a handbook or under vague instructions.

2. Make the Process Easy to Follow

If submitting an expense feels like a chore, people will delay or skip it. A smooth experience leveraging mobile access, smart categories, and simple forms encourages timely, accurate submissions and reduces wasted time chasing missing info.

3. Automate Wherever Possible

The less you touch each expense, the better. Set rules that apply the right codes, route invoices to the right stakeholders automatically, and flag anything unusual early. Automation keeps your team focused on strategy, not spreadsheets.

4. Enable Visibility at Every Level

Managers and department leads need timely insight into current spending. Provide real-time dashboards or filtered views that reflect their areas of responsibility. When teams can track spending as it happens, they’re better able to make proactive budget decisions and avoid surprises at month-end.

5. Analyze and Refine Regularly

Business needs evolve, and expense policies should, too. Schedule quarterly reviews of your process and reporting. Look for bottlenecks, confusing rules, or categories that no longer fit. Regular refinement ensures your system continues supporting your teams’ work without adding to it.

Automate Expense Management in D365 with ExFlow

Whether you’re managing business expenses with ExFlow Travel & Expense or processing supplier invoices with ExFlow AP, you get a native Business Central experience designed for speed, control, and accuracy.

Here’s how our software streamlines expense operations end-to-end:

• Capturing invoice data through OCR, email, or API, automatically validating entries before they hit your workflow
• Applying GL codes and running purchase order matching in the background, so only the exceptions reach AP for review
• Routing approvals based on department, threshold, or project, with mobile and email options built in
• Tracking every step for compliance, audit readiness, and team accountability
• Uncovering trends and processing insights through embedded Power BI dashboards, giving finance complete visibility without waiting for reports

Book a demo today and see how ExFlow can help streamline your business expense management.