The State of Expense Management: How to Manage Expenses in 2026

What was once a task dreaded by finance teams and managers is now recognised as the important window into your team and an ally for strategic planning. The area we’re discussing? Expense management.  

It’s more than just pressing accept or reject on claims. Expense management gives you invaluable insights into how your company spends, behaves, and prioritises; and when managed well, it becomes a source of strategic knowledge, operational control, and even ESG accountability.  

And because of this, the way teams manage expenses is advancing more than ever. From smart AI features to advanced reporting, technology is transforming the manual processes that teams would dread, making the parts of expense management that teams feared a straightforward task. 

So, as 2026 is getting ever closer, let’s look at the state of expense management in 2025. Backed with the insights we found in our Expense Trends report, we give you the challenges and trends you need to know so you have all you need to make smart finance choices when managing expenses in 2026. 

The biggest challenges in expense management 

1. Lack of visibility and control

Many businesses struggle to track and monitor expenses in real time, making it difficult to see where the money is being spent—and on what. This lack of visibility can lead to overspending and the risk of unauthorised spending slipping through the net. 

Without proper control, there’s chance of financial risks, like inflated costs and budget overruns. And it makes it more challenging to identify any spending patterns within your teams, so it’s harder to manage your budget decisions and forecast accurately. 

2. Error-prone and inaccurate data

While manual data entry gives you full control of what enters your systems, it also makes it even easier for human errors to slip through. This can lead to incorrect expense totals, duplicated data, or even missing information entirely, all which takes time to correct. Employees can also forget to attach receipts or invoices (or even attach the wrong ones) making it difficult to reconcile expenses with supporting documents. 

The issue is bigger than inaccurate expense reports—all which impact financial reporting and decision making—it can also trigger unwanted scrutiny from HMRC or other governing bodies. Which, let’s be honest, no one wants. It can lead to audit risks, repayment demands, non-compliance with tax regulations, and even rejected claims that hold up the entire process. 

And it’s a real issue finance teams are currently facing. We found that out of 371,000 claims, only 2.6% of them were approved immediately, showing the very real issue of approval bottlenecks. Teams are way too busy chasing additional context, interpreting intent, and manually reviewing claims instead of catching mistakes early. 

3. Non-compliance with policies and regulations

While creating an expense policy is fine and well, getting your people to actually read and stick to it is a whole other issue. And it’s a very real one. It’s more than just trying to sneak an after-work drink past your finance manager; it’s sets into motion a loss of control. And that’s when non-compliant spending creeps in. 

But, the gaps in policy enforcement aren’t a nightmareish threat. In our latest report, we found that 76% of rejected claims are due to vagueness or incomplete information. Factors that could have been flagged if submission workflows were up to scratch.  

Compliance needs a comprehensive approach. It’s not just one-time-and-done task, it’s something that requires a consistent comprehensive approach. One that covers clear and accessible communication, robust monitoring, and consistent enforcement. 

But it’s not just about making the rules, it’s about finding the balance between enforcing them without sacrificing on a trusting company culture. If you’re overly restrictive, it can impact employee morale and operational efficiency. But if you’re too lax in your approach, it can make it easy for out of policy spending to go unnoticed.  

4. Lack of scalability and adaptability

As companies grow or change, rigid expense management systems can become out-dated. If you merge or grow into a new industry and your system can’t adapt with you, it can lead to additional operational costs and unseen errors creeping in. All of which is good news for no one.  

Plus, if systems lack the flexibility to grow alongside you, it’s highly unlikely that they can adapt to market trends or regulatory requirements. The reality is the best solution is one that can not only grow alongside you but the industry too. Growth is a good thing. Your software shouldn’t make it a nightmare! 

The role of technology  

Technology is crucial for their expense management. While some businesses may still be collecting physical receipts and manually checking and approving every transaction, on the whole, the majority relish in the way technology makes tracking and controlling spending straightforward. And for good reason.  

It not only saves teams from manual data entry and policy checking, but it also makes reporting as simple as a few clicks rather than hours of spreadsheet scouring. All of which are a sigh of relief from the people who spend hours reconciling spending, double (and triple) checking data entries, and chasing missing receipts. 

With 70% of finance teams stating that real-time expense visibility is their top priority, it’s clear that our dependence on technology is only set to grow in relation to how we manage expenses.  

The trends defining how to manage expenses in 2026 

So, what key trends have defined expense management in 2025?  

Automation 

We’re sure it’s no shock that expense automation has been quickly gaining traction in 2025. Looking at the state of automation from a few years ago until now, the growth in capabilities has completely transformed—from smart scanning all the way to policy enforcement and advanced analytical abilities. Automation is a deal-breaker for many when choosing their latest expense management software. 

In fact, 87% of CFOs are investing in expense automation to improve accuracy and compliance. 

Spending patterns 

Spending patterns answer more than just who is spending and what they are spending on, they also give managers an in-depth look into how teams are working and operating. All of which is crucial for understanding your teams. Without that, you can’t forecast correctly or budget effectively. 

And for your finance teams, knowledge of company spending patterns is gold dust. They’re the valuable pieces of information that inform smarter policies, make inefficiencies even easier to spot, and even positively influence company culture. 

In a world where remote and hybrid businesses are the norm, it’s no shock to see that mileage is topping expense claims. Our data revealed that £3.19m was spent on mileage in the past year, and £944K in fuel following closely behind. It reinforces the fact that while many of us may be working from at-home offices some, if not all, of our working weeks, physical connection remains important. Whether it’s a weekly, bi-weekly, or monthly trip to the office or an in-person client meeting, teams are still clocking up the miles. 

But it’s more than just where people work, spending patterns can also give business leaders seemingly trivial insights into workplace culture. From our dependence on caffeine and the necessity of quick fast-food lunches contributing to £570K in expense claims to the £366K spend on taxi fares, the unpredictability of everyday life is clear, so it’s important that policies can accommodate to it. 

After all, patterns in spending don’t just provide expense data, they tell us where policies and people intersect. And great policies are made with your people in mind (as well as your budget, of course). 

Policy personalisation & employee experience 

So, with issues in policy compliance becoming more common, you’ll be delighted to know that trends are shifting to make expense policy creation—and enforcement—easier and more adaptable to your team.  

We all know just how complex expense policies can be, as it’s rarely a one-size-fits-all solution. With different spend types and limits for different roles and departments, it can become hard to track and even harder to enforce. But, it’s not just an issue for your accountants or your policy makers; it also becomes an employee experience issue, as if your people are having their expenses questioned or not even approved time and time again, they can begin to lose trust in your system. 

For expense management software providers  policy enforcement and spend control is an expectation rather than a nice-to-have. And it needs to be configurable to your needs, making sure everyone understands what applies to them (and hopefully, sticks to it). With user experience and mobile accessibility being important for remote or hybrid teams, simplified systems and business expense cards that favour ease of use (without sacrificing control) and functionality are on the rise.  

ESG and sustainable spending 

For many businesses, new regulations like the Sustainability Disclosure Requirements (SDR) now make environmental accountability a formal reporting need—not just a nice-to-have, making discussions about expense management no longer about just analysing every penny spent.  

Sustainability is becoming increasingly more important as businesses look to understand their environmental input in regulation with evolving environmental regulations.  

To make greener, responsible, and informed decisions aligned with industry standards, your systems should be armed to manage carbon reporting in real-time, making sure every mile is logged for complete transparency. This should also be factored into your expense policies too, for example, taking into account the environmental impact of journeys taken by train vs flight.  

Our research found that the total miles logged by businesses in our data set in the past year equates to an estimated 5,175 tonnes of CO2. To put that into perspective, that’s the same as 1,500 Olympic-sized swimming pools! If this makes anything clear, it’s that finance teams need to take sustainability goals into account in the same level of importance as they do cost. 

Manage expenses in 2026 with Capture Expense  

With Capture Expense, out of policy spending and compliance errors aren’t a worry you’ll be taking into 2026. From automated expense policies and spend control to carbon reporting features and mileage tracking, every penny, mile, and claim is logged and managed in one place, giving you full visibility and confidence that your expenses are managed compliantly. 

Don’t just take our word for it. Book a demo to see how easy expense management can be with Capture Expense.