AI trends shaping the future of expense management in 2025

Whether it is a chatbot, a shopping suggestion, or a face-scan to open your phone, AI is a part of your day-to-day life and here to stay. The huge amounts of R&D investments in AI's use across multiple fields are proof of this. One of the sectors seeing a substantial uptick in AI adoption is business travel and expense management. Although many stay wary of its challenges, such as its need for higher resource consumption, privacy infringements, inaccuracies, and incorrect data processing, pushing companies that do adopt it to restrict the application of the technology. But, whether completely or partially implemented, AI has been seeing increasing adoption rates, with more than 70% of businesses having adopted the technology, proving its worth. Here's a look at how AI technology is shaping the future of expense management.

What is AI and GenAI?

You may have heard the terms AI and GenAI being commonly tossed around on social media, podcasts, journals, and even websites offering AI-powered solutions. But with wide use and overwhelming information, it is often difficult to comprehend the objective and capabilities of these technologies. As the world moves towards adopting the same across every field of work, including yours, it is a necessity to understand the differences:

Artificial intelligence (AI) is a broad term for multiple technologies. It encompasses a variety of technologies such as automation, understanding and responding in natural human language, comprehending contextual information, and even generating content based on historical information for human understanding. From digitizing invoices, bundling expenses into a report, and categorizing every "duty-free shop" expense as a "personal" expense to learning, comprehending, processing, and analyzing like humans, and creating a response unique and relevant to the situation, all these technologies fall under the gambit of AI.

For example, you can ask the AI chatbot to check if there's anything you need to do before you submit your monthly expenses. It will not only look at your un-submitted expenses to build a report, it will also run through the company policy violations and compliance requirements published by the government and suggest corrective edits. Moreover, it will check and ask if you're missing a lunch expense for a trip where you've only uploaded expenses for two meals in a day. AI's ability to read, take action, and generate responses ensures that the possibilities are endless.

GenAI on the other hand, is more specific. It is one of the many AI technologies, focusing on creating unique content based on historical information. GenAI stands for generative AI. It can generate written responses, images, code, videos, and more based on the user's input, the context, historical information, and general behavior. This technology can analyze all available information, no matter the size, such as the flow of activities that you went through before you submit every expense report, or all the rejected reports across the organization throughout the years and their reasons, and so on.

The more information you share with GenAI models, the more accurate and informed they get. GenAI analyzes patterns across this data and comes to answers based on the same for future questions. So when you ask GenAI to build a personalized business itinerary to cover multiple customer meetings, it will sync with the customer's calendars, analyze booking expenses across multiple vendors, understand your preferences, and curate an itinerary fit to your requirements.

AI advancements in expense management

The expense management process includes tracking, analyzing, and optimizing employee expenses to control employee spend as well as ensure accurate accounting records of every expense. The infusion of AI in this process over the years has helped businesses elevate the performance of this process manifold. Here's a look at some of the notable AI advancements in expense management to date.

Smart expense categorization: Creating expense categories that encompass all expenses that will ever be incurred by employees across the company in its lifetime is a humungous task. AI's ability to process generally available information and past expenses to create categories as well as group future categories based on dynamic information fields such as merchant name, items, expense description, employee designation, and so on is a technology that helps you save time and analyze expenses better.

Expense report automation: AI can help you automate the process of identifying, collecting, classifying, and creating a report for all expenses and processing the report through the company workflows. This helps expense admins save time by eliminating follow-ups to ensure timely reporting and closing of expense accounts.

Fraud detection: AI's capabilities to identify anomalies and irregular user behavior when you're creating and submitting expenses helps detect, correct, avoid, and alert you of fraudulent expenses, saving businesses from significant losses.

Intelligent receipt scanning: As a traveler, you must have encountered multiple expense receipts with different formats, some mentioning the company registration number, others highlighting their tax accounts, making it difficult to simply scan and save. AI-powered receipt scanning is a technology that learns these requirements, scans these receipts across different formats, and intelligently extracts the right information to digitize the document for further processing based on your local laws. This ensures absolute accuracy and efficiency.

Dynamic approvals: Want to submit rare expense reports with abnormally high amounts? AI's smart detection can identify a dynamic custom workflow for expense approval and trigger a smart notification to alert approvers of the anomaly. Have a small expense that is historically always approved? Let AI suggest to the approvers that it's a green flag and let them finalize it for faster processing!

While these technologies currently exist in the market and are often used by enterprises such as yours to optimize their expense processes, GenAI technologies in this field are yet to take root. As businesses slowly adopt the technologies and feed in the information for the GenAI model to learn, grow, and refine its output, businesses can look forward to more interesting and advanced use cases of AI in expense management.

Here are a few GenAI applications in expense management that are on the horizon.

Customized company policies 

GenAI is set to help analyze company culture, finances, and employee behavior to build a customized expense policy that works in favor of all stakeholders while allowing companies to function smoothly and save money.

Personalized employee support 

GenAI can collect and build a repository of all expense policy-related information and share contextual support solutions via chatbots with employees in real time without depending on support personnel.

Intelligent vendor analysis 

GenAI's ability to analyze expenses based on vendors allows it to automate negotiations with vendors. For example, GenAI can examine employee travel data to see if one airline is regularly used over others. It can then predict a minimum number of airline seats needed by the company based on past employee travel data. The company can then directly negotiate with the carrier for suggested minimum seat bookings and save on bulk discounts.

Real-time audits and corrections 

A GenAI model working in sync with an expense software can run continuously in the background identifying and classifying anomalies and non-compliant expenses and suggesting corrections on the spot to ensure an error-free audit season.

Smart expense forecasts and budgeting 

GenAI's ability to analyze and deduce allows the technology to study past data, such as total spend across vendors, regions, departments, and more, and suggest budget limits based on informed forecasts to control company costs.

Improving employee experience 

GenAI can not only help businesses but also employees by suggesting better options for their expenses. For example, employees finding it difficult to find accommodations or meals within their budgets can leverage GenAI to find options in their locality that fit their requirements, preferences, and policy limits.

Expense policy localization

GenAI allows global companies to localize expense management by studying local employee behavior, government mandates, company finances, economic status, and more to suggest expense policy changes, allowances, limits, templates, and more for a compliant, optimal, and efficient expense management process.