Manage employee expenses

[This article is prerelease documentation and is subject to change.]

Business Central includes expense management features that help organizations track, review, approve, and reimburse business expenses. Whether employees travel, entertain clients, or pay for supplies, expense management gives everyone a clear, auditable process from receipt to ledger entry.

With and without Expense Agent

You can use expense management in two ways:

• With Expense Agent enabled. Expense users submit receipts through a web app or email. Expense Agent automatically extracts data, categorizes and itemizes expenses, creates expense records, and groups them into expense reports. You view and edit agent-created expenses inside Business Central. Learn more at Expense Agent overview.
• Without Expense Agent. Expense users create expense reports in Business Central and add expense lines manually. Individual expenses aren't available without the agent, and there's no AI-powered receipt scanning, extraction, or automatic categorization. This option is useful in regions where the agent isn't enabled or when you prefer to work entirely in Business Central.

Without the agent, you still have access to:

• Expense report creation, release, and posting
• Itemization, participants, per diem, and mileage on report lines
• Rule validation and approval workflows
• All setup features (categories, rules, posting groups, locations)

Who is expense management for?

Expense management involves three roles:

• Expense users who incur expenses and submit expense reports for reimbursement.
• Managers who review and approve or reject expense reports submitted by their team.
• Administrators who set up expense categories, rules, approval workflows, and posting groups.

Key concepts

The following concepts are central to how expense management works.

Expenses

An expense is a work-related cost, such as a hotel stay, a meal, or a taxi ride. Each expense has a category, date, amount, and optionally a receipt attachment. You can also add participants, itemizations, and mileage or per diem details depending on the category.

Expense reports

An expense report groups one or more expenses into a single document for submission. After you add expenses to a report, submit it for approval (if approval workflows are enabled). After the report is approved, you can post it to the general ledger and other entries.

Expense report statuses

Expense reports move through these statuses.

Expense categories and rules

Expense categories classify expenses by type, such as meals, travel, or office supplies. Administrators can configure categories with default payment methods, posting groups, and detail requirements like itemization or per diem. To have more accurate itemization for all lines, administrators can add subcategories.

Expense rules automatically apply company guidelines. A rule defines conditions based on category and location if applicable — for example, requiring justification for meals above a certain amount, or restricting which merchants are allowed.

Learn more at Set up expense categories and rules.

Refundable versus reimbursable

Understanding the difference between refundable and reimbursable is important:

• Refundable means the expense complies with company policy and is eligible for processing. Non-refundable expenses (such as personal charges on a hotel bill) cannot be reimbursable and aren't posted to the general ledger.
• Reimbursable means the employee paid personally and is owed money. An expense paid by company credit card is refundable but not reimbursable, because the company already covered the cost.

A single receipt can be partially refundable. For example, a hotel bill with three refundable line items and one non-refundable minibar charge results in a partial reimbursement. Administrators set the default refundable status on expense categories and subcategories.

Per diem and mileage

For travel expenses, expense management supports per diem allowances and mileage reimbursement. Administrators configure rates, calculation methods, and partial-day rules in the setup. Learn more at Set up per diem and mileage allowances.

Licensing requirements

The license you need depends on how you interact with expense management:

Related information

Manage expenses with Expense Agent web app
Set up expense management
Create and manage expenses
Record and reimburse employees' expenses
Financial management

Find free e-learning modules for Business Central here