How to Manage Business Expenses Efficiently

Expenses management isn’t just about cost-cutting. It’s about using your resources strategically – without slowing your growth or damaging staff morale. Managed effectively, it can unlock extra runway and help you stay agile when unexpected bills crop up or new opportunities arise.

By using tools and strategies that track and control spending in real time, you’ll have the visibility to make confident decisions, manage cash flow effectively, and plan ahead without guesswork.

In this guide, we’ll look at those tools and strategies that make business expenses management easier – from the right software to improving compliance and even strengthening your loan application.

Defining expenses management and why it matters for your business

Expenses management means systematically tracking, recording and controlling your business spending. That includes everything from travel costs and software subscriptions to staff reimbursements and office supplies (these different types of spend are commonly called ‘spend categories’). 

Good expenses management helps you stay on top of your budget, avoid unexpected costs, and keep everything ready for tax time. It’ll also give you a clearer view of your cash flow and financial health, so you can make better decisions, faster.

Good expenses management helps improve profitability by reducing waste and highlighting areas of overspending. It also supports compliance by making it easier to follow HMRC rules and keep accurate records.

What are management expenses in a business context?

In general, management expenses are the costs involved in running your company, like admin costs, rent, or staff salaries. Some of these running costs (things like rent or legal fees) can be subtracted from your company’s income when calculating your profit, which reduces the amount of Corporation Tax you have to pay). 

Compare the best expenses management software for UK businesses

Choosing the right expenses management software can save time, reduce admin, and improve accuracy across the board. But not every tool is suited to every setup. Some are lightweight and ideal for small teams, while others are designed to handle more complex reporting and approval processes.

Here are four of the most popular expenses management apps and software used by UK businesses, and how they compare with each other:

Each of these tools offers core functions like expense logging, approval workflows and mobile access. The difference lies in the depth of features, ease of use, and how well they fit into your wider systems.

When choosing a solution, think about:

• How many people will need access.
• Whether you need built-in approval processes.
• What existing tools you need it to integrate with.
• Your budget, both now and as you grow.

If you're a smaller operation, Xero Expenses or QuickBooks might offer everything you need in a clean, user-friendly format. For more complex needs, particularly around employee expenses management or travel policies, Expensify or SAP Concur offer more control and oversight.

Which expenses management app is best for small businesses?

If you’re just starting out or have a small team, tools like Xero Expenses or QuickBooks are user-friendly and offer all the core features you need, without the complexity, high cost or lengthier integration procedures of larger systems.

How to automate business expense tracking and reporting

Automating your online expenses management can save hours each week and reduce the risk of human error.

With a good system in place, you and your team can log expenses as they happen by snapping a photo of the receipt. The image is uploaded to the app, which then extracts the key information automatically.

This allows employees to submit claims immediately, and managers to approve them just as quickly.

All the data is then synced with your accounting software, cutting down on paperwork and making reporting much simpler at month-end or tax time. You can also integrate your expenses management system with payroll or bookkeeping tools, helping you stay accurate and up to date.

Simplify employee expense claims with the right system

A good employee expenses management system makes it easier for staff to report what they’ve spent – and for you to track, approve, and pay them back quickly.

Look for systems that allow receipt uploads via mobile, simple categorisation, and automated approval workflows. When the process is easy, people are more likely to stick to it and less likely to make mistakes.

To keep things smooth:

• Set clear and simple expense policies.
• Use automation to reduce manual checks.
• Make approvals quick and transparent.
  
  

This also helps reduce the risk of fraud or duplicate claims and improves accuracy across the board.

Improve compliance with HMRC using structured expense policies

Keeping your expenses in line with HMRC expectations starts with clear internal policies. This makes it easier to justify your claims and stay compliant during audits.

Your policy should clearly set out:

• What types of expenses are acceptable.
• How to submit and approve them.
• What documentation is required.

But writing the rules is only the first step. Everyone in the business needs to understand them – including limits on things like T&E spend. You can make expenses part of the induction process for new hires and store a handbook or slide deck in a place that’s easy to access.

When your team knows the rules, it’s easier to follow them – and your expenses are more likely to be tax-deductible. That includes areas like travel expenses management, which often have specific requirements under HMRC guidelines.

Regular internal checks can help spot any issues early and ensure your claims always stay within the rules.

Track and reduce management expenses to improve profitability

Keeping track of management expenses is a great way to increase profitability and improve your financial resilience. And when tracked properly, many of these expenses can be deducted from your taxable income (which’ll reduce your Corporation Tax bill).

By reviewing your expense data regularly, you can see where spending is increasing and take action early. That might mean cutting underused software licences, renegotiating supplier contracts, or identifying travel policies that need tightening.

Some common management expenses examples worth reviewing include:

• Admin software and licences.
• Office supplies and utilities.
• Travel and accommodation costs.

Having visibility over these costs means you'll be better placed to make confident decisions about what to scale back, what to optimise, and what can be reclaimed through tax relief.

Over time, this kind of discipline helps protect your margins and frees up capital for growth or investment elsewhere.

How good expense management can support your loan application

Clear, well-managed expenses can strengthen your case when applying for finance. Lenders want to see that you run your business responsibly. Showing that your costs are under control, your expenses management is consistent, and your financial data is accurate helps build trust and confidence.

At iwoca, for example, we assess financial data like your recent spending and cash flow when you apply for funding. If you’re already using an expenses management system, your records will be neater, your accounts more accurate, and your cash flow easier to assess.

A consistent record of how you manage outgoings gives lenders greater visibility into your operating rhythm. It helps demonstrate that your cash flow is predictable, that you’re planning ahead, and that any funding you apply for is part of a wider financial strategy (not a stopgap).

It also makes the application process quicker and easier. When your expenses are clearly recorded and categorised, it’s simpler to provide the documentation lenders need, respond to queries, and avoid delays. Over time, that kind of discipline can also improve your eligibility for higher-value loans or more flexible repayment options.

Can managing expenses better help with loan approval?

Yes. Good business expenses management shows lenders that you understand your finances and are capable of managing repayments. That can make the difference between getting approved and not.

When to consider a business loan to handle large or seasonal costs

Sometimes, even with great expense tracking, you need extra support to handle surprise expenses or seasonal costs. Using a business loan to cover large upfront outlays or smooth cash flow lets you focus on growth instead of worrying about timing.

At iwoca, we offer flexible funding designed to work with the rhythm of your business. Our Flexi-Loan is like a line of credit. You’ll get a limit that you can draw down on as and when you need.

You can repay early with no fees, and you’ll only pay interest for the time you borrow. Approval decisions are usually made within 24 hours, so you get the funds when you actually need them.

It’s a great way to stay in control, especially when paired with solid online expenses management and accurate reporting.

Learn more about how iwoca’s Flexi-Loan can support your growth, and take the first step towards smarter financial management today. Apply here.

‍