How to Control and Manage Company Spending in 5 Simple Steps

Q: What is business expense management?

Business expense management involves controlling company spending, keeping accurate records such as receipts, and ensuring costs stay within budget. For most businesses, it means having a clear process for how employees spend, how transactions are recorded, and how spending is reviewed over time.

Q: What is the easiest approach to expense management for small business owners?

Keep it simple: separate business and personal finances, set basic budgets, capture receipts at the point of purchase, and review spending weekly. Consistency matters more than complexity.

Q: Are prepaid company cards better than credit cards for small businesses?

They can be, particularly when you want tighter control. Prepaid cards use pre-allocated funds, which makes it easier to enforce limits and stay within budget without the risk of overspending.

Q: Do I need receipts if I have bank statements?

Yes. Bank statements show that a payment was made, but not what it was for. Receipts keep your records accurate and support VAT claims.

Q: How do I control company spending as a startup founder?

Start with the basics: open a dedicated business account, use a company card for day-to-day purchases, and set a simple budget across your main spending categories. At the early stage, the priority is visibility – understanding where money is going before you try to optimise it.

Q: Do I need special tools to manage company spend?

Not necessarily, but the right tools make it considerably easier. A spend management platform can automate receipt capture, enforce budget limits, and give you real-time visibility – all things that are slow and error-prone when you’re doing them manually in a spreadsheet.

Q: What are examples of poor expense management?

Using personal cards for business purchases, relying on reimbursements as a default, not capturing receipts at the point of purchase, and reviewing spending only at month-end. Each one reduces visibility and makes it harder to catch problems before they get expensive.

If you’re looking for ways to control company spending or manage company expenses more effectively, the key is visibility, structure, and a few consistent habits. You can start simple and build as your finances become more complex. The important thing is making good habits part of how your business operates from the start, rather than something you retrofit later.

If you’re a founder or running a small team, you’ll benefit from a business expense (or spend) management system to help you stay in control without filling your week with endless admin.

This guide, written in collaboration with Soldo, explains five ways to manage business expenses more effectively, including budget rules, automated tools, receipt capture, and weekly check-ins. Whether you’re a new founder or running a small team, these steps will help streamline processes and cut paperwork.

Key takeaways

Enforce budgets with real-time spend limits to protect cash flow automatically
Eliminate reimbursements by issuing cards with pre-approved funds to your team
Review spending weekly to flag waste, avoid missing receipts, and reduce end-of-month admin
Use company cards to separate business and personal spending and stay in control

1. Keep business and personal spending separate

Mix personal and business finances, and your records become unreliable, your claims harder to support, and legitimate costs easier to forget.

Forming your company with a business bank account paired with a dedicated company card gives you an accurate, auditable record of what the business has spent and, therefore, what you can claim on your Corporation Tax return.

What counts as a business expense?

A legitimate business expense is something you’ve spent wholly and exclusively for the purposes of the business, such as software subscriptions, travel to client meetings, professional development, and office supplies.

Costs you incur before you start trading can also qualify as pre-trading expenses, which many early-stage founders don’t realise.

It’s also worth knowing that using company funds for personal costs can unintentionally create a director’s loan account – a compliance obligation that’s straightforward to avoid if you keep finances separate.

Streamlining financial management

Dedicated company cards make this easier to maintain, and Soldo is designed with exactly that kind of separation in mind. To get the basics in place:

Move subscriptions and key suppliers onto a business payment method
Stop personal, temporary purchases from becoming the norm
Keep day-to-day spending on a dedicated company card

It’s a straightforward starting point, but it makes everything else in this guide easier to implement.

2. Set a budget, then enforce it through how you pay

A budget sets out what your business expects to spend over a given period. Done well, it helps you allocate money more deliberately, identify where costs are creeping up, and make better decisions about where to cut back.

To create a budget, forecast your expected spending over a set period. Most small businesses plan monthly or quarterly, with an annual view for fixed costs. Break this down into three categories:

Fixed costs – software, insurance, rent
Variable costs – travel, marketing, materials
Ad hoc buffer – for genuine surprises

Fixed costs are easy to pin down. For variable costs, look back at the past three to six months of actual spending, or, if you’re just starting out, aim to be as realistic as possible and refine as you go.

Your ad hoc buffer should typically be around 10-15% of your total variable estimate, sufficient to absorb unexpected or significant costs.

Enforcing company-wide spending limits

Pre-loading company cards with allocated funds automatically enforces limits, without any manual oversight. If a budget for a particular category runs out, the card simply stops working – no overspend, no nasty surprises down the line.

With Soldo, you can set individual controls for each card, person, or spending category. The guardrails are built in from the start, and you have complete visibility and control over how spending contributes to your overall budgeting.

3. Take control of reimbursements

Many small businesses handle employee spending through reimbursements, where a team member pays for an expense out of their own pocket and claims the money back later. It requires very little setup, which is why it’s so common. But it tends to create more problems than it solves.

Why reimbursements are a problem

Someone submits the claim, someone approves it, someone processes the payment – and that cycle repeats for every transaction. It’s time-consuming and requires someone to manage it, which can be an issue in small teams where everyone’s already wearing multiple hats.

In practice, it leads to delayed submissions, lost receipts, and low-level frustration – particularly where people cover a wide range of costs, including working-from-home expenses that can easily blur the line between personal and business spending.

There’s the morale question, too. Your team shouldn’t have to fund business costs out of pocket and wait to be reimbursed.

A better strategy

One of the more effective alternatives is to issue pre-loaded cards with approved funds.

Your team spends within set limits, you get real-time visibility, and the reimbursement cycle is eliminated. This is the model Soldo is built around, and it’s a meaningful improvement over chasing receipts and processing claims while managing your other responsibilities.

4. Capture transaction data and receipts immediately

Capturing receipts and transaction data as you go is far easier than trying to reconstruct everything at month-end. The longer you leave it, the context of what was spent and why fades, and the receipts to back it all up go walkabout.

What a valid receipt needs to include

For a receipt to support a tax deduction, HMRC generally expects it to show the supplier’s name and address, the date of the transaction, a description of the goods or services, and the total amount paid.

If you’re VAT-registered and want to reclaim the VAT, you’ll also need a VAT receipt showing the supplier’s VAT registration number and the VAT amount charged separately – a standard receipt won’t always include this.

Your bank statement only shows that money left your account, not what it was for. So receipts are a vital piece of the puzzle for ensuring you can claim legitimate business expenses and meet your compliance duties.

How to make it a habit

Where possible, photographing and uploading receipts at the point of purchase is the simplest way to stay on top of this. Tagging each transaction with a category and a short note ensures transparency and accuracy.

Soldo, for instance, makes this straightforward. Payments can be categorised and tagged immediately, eliminating the need to match spending to records. It makes recording expenses and filing your annual accounts considerably easier.

5. Review spending weekly, not at the end of the month

Lastly, reviewing your spending regularly makes month-end far less stressful. Catching a duplicate subscription or a miscategorised expense mid-month takes minutes. Leave it until the end of the month, and the receipt trail has often gone cold.

What to look for each week

A useful weekly review covers four things:

Missing receipts – chase them while the transaction is fresh enough for people to remember
Unusual activity – unfamiliar suppliers, duplicate subscriptions, or charges in unexpected categories
Budget vs actual – check whether each category is tracking as expected, and adjust where needed
Categorisation – consistent tagging makes bookkeeping and filing your annual accounts considerably easier at year-end

Staying on top of spending little and often is far less painful than letting it build up into a larger month-end task. Soldo simplifies ongoing spending reviews by showing you who is spending what across which categories, so your weekly check-in takes minutes rather than half the morning.

How company cards help you manage company spending

For founders and small teams, company cards are an excellent tool for managing day-to-day company spending.

Rather than setting rules and hoping they’re followed, you’re building the controls directly into how money is accessed. That supports every aspect of business spending management, from following your budgets to tracking and claiming business expenses. Learn how Soldo helps you predict company spending more accurately and plan with confidence by giving you access to real-time spend data.

And if you’re just starting out, getting your business structure right is key to managing expenses effectively. At 1st Formations, we help you register your company and set up essential services – including business banking options and VAT registration – so you’re in control from day one.

Frequently asked questions

What is business expense management?

What is the easiest approach to expense management for small business owners?

Are prepaid company cards better than credit cards for small businesses?

Do I need receipts if I have bank statements?

How do I control company spending as a startup founder?

Do I need special tools to manage company spend?

What are examples of poor expense management?

How to control and manage company spending in 5 simple steps

Table of Contents

Key takeaways