Expense approval process: How to build a workflow that scales
Somebody set up your expense approvals a few years ago, and every report still goes to the same manager. That manager approves a $14 parking receipt and a $9,000 software renewal with the same click, usually a week late. Your employees wait to get paid back, and you wait to close the month.
An expense approval process decides who signs off on which spending, at what amount, and what happens when something doesn't fit the rules. A good one moves routine expenses through quickly and puts a person in front of the expenses that need a closer look.
You can usually get there without starting over. Match the review to the risk of the spend, then decide ahead of time what happens when an approver is away, a receipt goes missing, or a manager submits their own expenses.
Key takeaways
- Approval rules work best when they match the risk of the spend, so a parking receipt and a software renewal shouldn't get the same review.
- More than half of occupational fraud cases involved a lack of internal controls or an override of existing ones (ACFE, 2026).
- On Expensify's Control plan, low-risk reports can be approved automatically while a random audit keeps a person in the loop.
- Most bottlenecks come from routing every report the same way, whatever its amount or category.
- Start with one threshold and add tiers only where volume calls for them.
What is an approval workflow?
Once an employee hits submit, the report needs somewhere to go. An approval workflow is the path an expense report follows after someone submits it, moving from approver to approver until it's cleared for payment. The submitter's manager usually approves first, and the amount, category, or project on the report decides whether anyone else in your company needs to see it.
People often mix up the workflow, the process, and the policy, but each one covers something different. The expense approval workflow is the route a report takes from one approver to the next. The expense approval process is the whole review from submission to reimbursement, and the expense approval policy is the set of written rules that decides how both of them work.
Your workflow will likely involve some mix of these roles.
Submitter. The employee who spent the money and files the report with receipts.
Approver. Usually the submitter's manager, who checks each expense against policy and approves it, rejects it, or sends it back with questions.
Over-limit approver. A second approver, often a department head or controller, who only sees reports above a set amount.
Finance reviewer. Someone on the finance team who checks coding and receipts before the report is exported and paid.
Approvals are one part of spend control, along with your budgets, card limits, and written policy. When all four agree, your approvers stop guessing what's allowed.
What are the steps in the expense approval process?
Whatever routing your company picks, every expense report moves through the same stages. Some of them take seconds, and one of them can take a week.
Submit with receipts. The employee files an expense report with a receipt attached to each expense.
Run the policy check. Software or a reviewer compares each expense to the policy and flags anything over a limit, missing a receipt, or in a blocked category.
Route to the approver. The report goes to the first approver in the submitter's workflow.
Approve or send back. The approver approves the report or returns it to the submitter with a note on what to fix.
Add a second review for over-limit reports. Reports above the threshold go to an over-limit approver before moving on.
Export and reimburse. Finance exports the approved report to the accounting system and pays the employee back.
Expense report approval, steps four and five, is the only part that waits on someone's calendar, so it's where reports sit longest. Expense report software can run the policy check and the export on its own, so your approvers only spend time on the calls that need a person.
Common expense approval workflow patterns
Your approval hierarchy, meaning the order in which people review expenses, should fit the kind of spending your team does. A team that mostly files small travel expenses needs something different from a team buying software, equipment, and client travel across several projects.
You'll probably land on one of four patterns, or a mix of them.
| Pattern | Best for | Approvers | Trade-off |
|---|---|---|---|
| Single approver | Small teams with mostly routine spend | The submitter's manager | One person becomes the bottleneck |
| Tiered by amount | Teams with a mix of small and large expenses | The manager, plus a second approver above a set amount | Thresholds need revisiting as the company grows |
| Department or category based | Spend that crosses departments, projects, or grants | Whoever owns the budget for that category or project | More rules to keep up to date when the org chart changes |
| Pre-approval | Travel, equipment, and other planned purchases | A manager or budget owner, before anyone spends | Adds a step before the purchase |
Single approver
Use a single approver when your team is small and most expenses are routine. Every report goes to the submitter's manager, who approves it and passes it to finance for payment.
It's quick to set up and easy for everyone to understand. The catch is that one manager becomes the bottleneck, and when they're out, every report waits.
Tiered by amount
Use tiers when a handful of large expenses deserve a closer look than the rest. In a multi level approval workflow, the manager approves every report first, and a second approver joins only when a report crosses a set amount.
For example, you might send reports over $1,000 to the department head and reports over $5,000 to the controller as well. The manager still sees every report, so the big ones get two or three reviews and the small ones still get one.
Department or category based
Use department or category routing when your spending crosses budgets that different people own. Software purchases go to the IT lead, client travel goes to the project lead, and grant-funded expenses go to the grant manager.
This pattern suits consulting firms, construction companies, and nonprofits, where one employee's expenses can touch three budgets in a week. It only works if expenses are coded correctly, so set up clear business expense categories before you route by them.
Pre-approval for travel or equipment
Use pre-approval for planned purchases, where saying no after the money's spent is too late. An employee asks for approval before booking a conference trip or ordering a laptop, and the approved request becomes the yardstick for the final expense report.
The trade-off is an extra step before anyone can buy anything, so keep pre-approval for business travel and purchases above a set amount.
How to build an approval matrix
An approval matrix is a table that shows who approves each type and size of spending, so everyone on your team knows where the tiers start and stop. It usually has columns for the amount, the approver, the receipt rule, and the turnaround time. It's also called a delegation of authority matrix, or DOA matrix, especially when it covers contracts and purchasing as well as expenses.
Here's one for a company that uses tiered routing. Treat the amounts as a starting point to adjust to your own spending, since they aren't an industry benchmark.
| Amount | Approver | Receipt rule | Turnaround target |
|---|---|---|---|
| Under $100, no policy flags | Approved automatically, with a random sample sent to the manager | Itemized receipt | Same day |
| $100–$1,000 | Direct manager | Itemized receipt | Two business days |
| $1,000–$5,000 | Manager, then department head | Receipt plus business purpose | Three business days |
| Over $5,000 | Manager, department head, then controller or CFO | Pre-approval before purchase, plus receipt | Five business days |
Keep the amounts round and the tiers few, since every extra row is one more rule your approvers have to remember. Revisit the amounts once a year, or sooner if one tier ends up handling most of the reports.
Once the matrix is set, write it into your expense approval policy. That way, employees know who approves what before they spend.
How to handle exceptions without stalling approvals
Your approval policy probably covers the normal report and says nothing about the odd one, which is usually the report that stalls. When nobody's written down what to do, approvers either make it up or skip the check. The ACFE's Occupational Fraud 2026 report found that more than half of all fraud cases involved a lack of internal controls or an override of existing ones.
Give each exception one rule, and write it down before anyone needs it. Clear rules keep reports moving and make expense fraud harder to hide.
When the approver is out of office
Name a backup for every approver on your team, and let the backup step in after a set number of days. The backup should have the same approval limits as the person they're covering, so nothing bigger slips through while someone's on vacation.
When a manager submits their own expenses
Nobody should approve their own report. Route a manager's expenses to their own manager, and send a founder's or CFO's expenses to another executive, a board member, or an outside accountant.
When a receipt is missing
Ask for a written note with the date, amount, merchant, and business purpose. Then set a dollar cap, so anything over it doesn't get paid back without a receipt.
Keep track of how often each person submits without receipts, since a pattern tells you more than one lost receipt. Your policy on reimbursable expenses should already spell out which expenses need receipts in the first place.
When out-of-policy spending has a good reason
Let the approver approve it with a written explanation, then send it one level up for a second look. If the same exception keeps coming up, update the policy so approvers stop making the same call by hand.
When a purchase can't wait
Let urgent purchases get approved after the fact, as long as someone signs off within a set window, like 48 hours, and the amount stays under a cap. Anything bigger still needs a call or message to an approver before the money's spent.
Automating expense approvals with rules and judgment
Approval software can clear routine reports without anyone touching them. Some reports will always need judgment, though, and Expensify handles the two kinds of work separately.
Rules handle the routine reports
Rules are best for decisions you can write down ahead of time, like your amounts, audit rate, and who owns which budget.
Auto-approval. Concierge, Expensify's AI agent, approves reports under a set amount that don't contain policy violations.
Random audit. A set percentage of compliant reports still goes to a person, even with auto-approval turned on.
Over-limit approvers. A second approver reviews any report above a set amount.
Category and tag approvers. Reports go to whoever owns a category, department, or project before the main workflow.
On the Collect plan, you get a default approval workflow with auto-approval fixed at $100 and no random audit. The Control plan lets you set your own threshold and audit rate, and add over-limit, category, and tag approvers.
Without a random audit, someone who keeps every report under the auto-approval limit might never have one reviewed by a person. The ACFE found that a typical fraud case lasted 12 months before detection, and a random sample puts a person in front of those reports long before that.
Concierge handles the judgment calls
Concierge looks at the context of each expense, catches policy violations in realtime as expenses come in, and follows up with employees on its own.
You can have Concierge approve or reject reports based on custom instructions you write, and your employees can create and update expenses through chat. Every action comes with an Explain button that shows the reasoning, policy, and data behind it, so you never have to guess why a report was approved or flagged.
SmartScan reads each receipt as it's uploaded, so the policy check already has the merchant, date, and amount before the report reaches anyone. With AI expense management doing the checking, employees get paid back faster, and approvers only see the reports that need a person.
FAQs about the expense approval process
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There are four common types of expense approval. A single approver handles every report, tiered approval adds a second approver above a set amount, department or category routing sends expenses to whoever owns that budget, and pre-approval signs off on planned purchases before anyone spends.
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For planned purchases like travel or equipment, check your company's policy and submit a pre-approval request with the amount, purpose, and dates before you spend. For everyday expenses, file an expense report with a receipt for each expense, and it goes to your approver for review.
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A manager's expenses should go to their own manager, since nobody should approve their own report. Expenses from the founder or CFO usually go to another executive, a board member, or an outside accountant.
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An approval matrix shows who approves which spending at which amount, so employees know where their requests will go and approvers know their limits. It also gives auditors a clear record of who's allowed to approve what.
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There's no standard benchmark, so treat turnaround as a policy choice. Set targets that fit your approval matrix, such as same day for small automatic approvals and a few business days per approver for larger reports, and name a backup approver for anyone who's away.
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Yes. Rules can approve low-risk reports automatically and route the rest by amount, category, or project, while a random audit keeps a share of compliant reports in front of a person.
In Expensify, Concierge handles the rules and the judgment calls, and the approvals help article covers setup on the Collect and Control plans.
