Expense Management Solutions

Overview

Modern expense management requires more than just corporate credit cards and expense reports. Lithic enables you to build sophisticated expense management platforms that give finance teams real-time visibility and control over corporate spending, while empowering employees with instant card issuance and flexible spend options.

With Lithic's card infrastructure, you can issue virtual and physical cards to employees, configure granular spending rules, track expenses in real-time, and integrate seamlessly with accounting systems. Whether you're building a standalone expense management platform or adding expense features to your existing fintech product, Lithic provides the foundational infrastructure you need.

Key Features for Expense Management

Instant Card Issuance

Virtual Cards in Seconds: Issue cards to new employees immediately
Physical Cards in Days: Rapid fulfillment for in-person purchases
Bulk Shipping: Onboard entire departments or offices at once
Temporary Cards: Single-use cards for one-time vendors or purchases

Proactive Spend Control

Policy Enforcement: Authorization rules block non-compliant spending automatically
Real-Time Budgets: Prevent overspend by declining transactions when budget exhausted
Merchant Restrictions: Allow only business-appropriate categories

Real-Time Visibility

Instant Notifications: See spending as it happens via webhooks
Budget Tracking: Monitor budget utilization and forecast month-end totals
Pending Holds: See authorized but not yet settled transactions

Finance Team Efficiency

No Manual Data Entry: All transactions automatically captured and categorized
Policy Compliance: Rules enforce policy without manual review
Audit-Ready: Complete transaction history

Security & Fraud Prevention

Granular Controls: Lock down cards to specific merchants, amounts, or times
Real-Time Monitoring: Flag suspicious transactions immediately
Challenge Authentication: Require SMS approval for risky transactions
Card Lock/Unlock: Employees can freeze cards if lost or stolen
Virtual Cards: Reduce fraud with unique PANs for online subscriptions

Core Capabilities

Employee Card Issuance

Virtual Cards: Issue instant virtual cards to employees for online purchases and subscriptions:

Instant Issuance: Generate cards via API in seconds, no physical distribution needed
Single-Use Cards: Issue one-time cards for specific vendors or purchases
Multi-Use Cards: Reusable virtual cards for ongoing expenses
Merchant-Locked Cards: Cards which can only transact at particular merchants
Digital Wallet Support: Add to Apple Pay or Google Pay for contactless in-person purchases
Vendor-Specific Cards: Issue cards locked to specific merchants for recurring subscriptions

Physical Cards: Distribute physical cards for in-store purchases and travel:

Rapid Fulfillment: Ship cards to employees within days
Bulk Shipping: Order cards for entire departments or teams
Custom Branding: White-label cards with company logo and design
PIN Management: Secure PIN generation and reset capabilities
Contactless/NFC: Modern payment technology for quick transactions

Card Programs: Organize cards by department, team, or spend category:

Shared Team Cards: Multiple employees with access to shared budget
Executive Cards: Higher limits and fewer restrictions for leadership

Granular Spend Controls

Authorization Rules: Configure sophisticated spending policies that enforce automatically:

Merchant Category Controls:

To restrict cards to only approved merchant categories, decline transactions that fall outside your allowed list:

{
  "type": "CONDITIONAL_ACTION",
  "parameters": {
    "conditions": [
      {
        "attribute": "MCC",
        "operation": "IS_NOT_ONE_OF",
        "value": [
          "5812",  // Restaurants
          "5814",  // Fast food
          "5411",  // Grocery stores
          "3000-3299",  // Airlines
          "3501-3999",  // Hotels/Lodging
          "5541",  // Gas stations
          "5734"   // Computer software stores
        ]
      }
    ],
    "action": "DECLINE"
  }
}

Transaction Amount Limits:

Per-transaction maximums (e.g., no transaction over $500)
Daily, monthly, or annual spending caps
Velocity limits (e.g. max 10 transactions per day or $400 per week)
Budget allocation enforcement

Geographic Restrictions:

Domestic-only transactions for most employees
International allowed for executives and travelers
Country-specific allowlists (e.g., only US, CA, UK)
State or region restrictions

Challenge Authentication:

SMS authentication for transactions over threshold (e.g., $1,000+)
Two-factor authentication for international purchases

Real-Time Decisioning: Use Authorization Stream Access (ASA) for custom approval logic:

Query internal expense policies and budgets (within 3-second timeout)
Check project budget availability before approving
Integrate with HRIS systems for employee verification

Spend Limits & Budgets

Card-Level Limits: Set spending caps per employee card:

Transaction Limit: Maximum per purchase (e.g., $1,000)
Daily Limit: Maximum spend per day (e.g., $2,500)
Monthly Limit: Maximum spend per month (e.g., $10,000)
Lifetime Limit: Total spend across card's lifetime

Account-Level Limits: Control total spending per employee across all cards:

Sum all cards issued to an employee
Prevent limit circumvention by issuing multiple cards
Shared limits for team members on same project

Budget Allocation:

Assign budgets by department, project, or cost center
Track spend against allocated budget in real-time
Alert finance team when approaching budget thresholds

Real-Time Expense Tracking

Transaction Visibility: Monitor all employee spending in real-time:

Pending Authorizations: See charges immediately upon authorization
Settled Transactions: Track when merchants capture funds
Merchant Details: Name, MCC, location, and transaction metadata
Employee Assignment: Link every transaction to specific employee and card

Transaction Categorization:

Merchant category codes (MCC) for expense categorization

Balance Tracking:

Real-time balance updates across all cards and accounts
Pending vs. settled transaction visibility
Available vs. total budget tracking
Multi-currency support with FX rates

Webhooks for Real-Time Alerts:

// Webhook: transaction.created
{
  "event_type": "transaction.created",
  "payload": {
    "token": "transaction_token",
    "amount": 5420,  // $54.20
    "merchant": {
      "descriptor": "CHIPOTLE #1234",
      "city": "SAN FRANCISCO",
      "state": "CA",
      "mcc": "5814"  // Fast food
    },
    "card_token": "employee_card_token",
    "account_holder_token": "employee_account_holder_token",
    "status": "PENDING"
  }
}

Use webhooks to:

Send Slack/email notifications to finance team
Trigger receipt requests to employees
Flag suspicious transactions for review
Update internal expense tracking systems

Employee Account Management

Create account holder for each employee
Issue virtual and/or physical cards
Configure authorization rules to control spending
Check remaining budget and spending history
Employees view their card details (last 4 digits, expiration)
Temporarily lock/unlock cards (e.g., lost card)
Adjust employee spend limits as needed

Travel & Entertainment (T&E) Expense Management

Travel Cards: Issue cards specifically for business travel:

Higher limits for flights, hotels, and car rentals
International transaction support with FX
Merchant category restrictions (travel, meals, transportation only)
Temporary activation for trip duration
Receive detailed T&E transaction information, such as flight or lodging dates

Per Diem Enforcement:

Configure daily meal allowances
Automatically approve meals under per diem.

Corporate Subscriptions & Recurring Expenses

Vendor-Specific Virtual Cards: Issue cards locked to specific SaaS vendors:

One card per vendor (Salesforce, AWS, Google Workspace, etc.)
Prevent unauthorized charges from vendor
Easy cancellation by closing card

Budget Allocation by Vendor:

Assign budget per vendor (e.g., $10k/month for AWS)
Automatic card decline if over-budget

Implementation Guide

1. Set Up Corporate Expense Program

Create financial accounts for your expense management program:

POST /v1/financial_accounts
{
  "type": "OPERATING",
  "nickname": "Corporate Expense Management - Operating Account"
}

Fund this account via ACH to provide liquidity for employee card spending.

2. Create Employee Account Holders

For each employee, create an account holder:

POST /v1/account_holders
{
  "individual": {
    "first_name": "Alex",
    "last_name": "Rivera",
    "email": "[email protected]",
    "phone_number": "+15555558765",
    "dob": "1988-11-30",
    "address": {
      "address1": "100 Market St",
      "city": "San Francisco",
      "state": "CA",
      "postal_code": "94105",
      "country": "USA"
    }
  },
  "external_id": "employee_id_12345",  // Link to HRIS system
  "tos_timestamp": "2024-01-30T10:00:00Z",
  "workflow": "KYC_EXEMPT"
}

3. Issue Employee Cards

Issue virtual card for immediate use:

POST /v1/cards
{
  "type": "VIRTUAL",
  "account_token": "account_token",
  "state": "OPEN",
  "memo": "Employee Card - Alex Rivera - Marketing Dept"
}

Then configure spending controls using authorization rules (see Step 4 below).

Issue physical card for in-person purchases:

POST /v1/cards
{
  "type": "PHYSICAL",
  "account_token": "account_token",
  "state": "OPEN",
  "product_id": "custom_corporate_card_program",
  "shipping_method": "STANDARD",
  "shipping_address": {
    "first_name": "Alex",
    "last_name": "Rivera",
    "address1": "100 Market St",
    "city": "San Francisco",
    "state": "CA",
    "postal_code": "94105",
    "country": "USA"
  }
}

4. Configure Authorization Rules

Set company-wide spending policies and employee-specific budget controls:

Block Restricted Merchants (program-wide):

POST /v2/auth_rules
{
  "program_level": true,  // Apply to all cards
  "state": "ACTIVE",
  "type": "CONDITIONAL_ACTION",
  "parameters": {
    "conditions": [
      {
        "attribute": "MCC",
        "operation": "IS_ONE_OF",
        "value": ["5813", "7995", "7273", "5993"]  // Gambling, betting, prepaid
      }
    ],
    "action": "DECLINE"
  }
}

Enforce Monthly Spending Cap (per employee):

POST /v2/auth_rules
{
  "account_tokens": ["account_token"],
  "state": "ACTIVE",
  "type": "VELOCITY_LIMIT",
  "parameters": {
    "filters": {
      "include_purchases": true,
      "include_withdrawals": false
    },
    "period_window": "MONTH",
    "limit_amount": 250000,  // $2,500 monthly budget
    "limit_count": null
  }
}

Enforce Per-Transaction Limit (per employee):

POST /v2/auth_rules
{
  "account_tokens": ["account_token"],
  "state": "ACTIVE",
  "type": "CONDITIONAL_ACTION",
  "parameters": {
    "conditions": [
      {
        "attribute": "TRANSACTION_AMOUNT",
        "operation": "IS_GREATER_THAN",
        "value": 50000  // Decline transactions over $500
      }
    ],
    "action": "DECLINE"
  }
}

Require Approval for Large Transactions:

POST /v2/auth_rules
{
  "account_tokens": ["account_token"],
  "type": "CONDITIONAL_ACTION",
  "parameters": {
    "conditions": [
      {
        "attribute": "TRANSACTION_AMOUNT",
        "operation": "IS_GREATER_THAN",
        "value": 100000  // Over $1,000
      }
    ],
    "action": "CHALLENGE"  // SMS authentication required
  }
}

5. Fund Employee Cards

Transfer funds from corporate operating account to employee cards:

POST /v1/book_transfers
{
  "amount": 250000,  // $2,500 monthly budget
  "from_financial_account_token": "corporate_operating_account_token",
  "to_financial_account_token": "employee_issuing_account_token",
  "category": "BALANCE_OR_FUNDING",
  "subtype": "INTRA_CUSTOMER",
  "type": "TRANSFER",
  "memo": "Monthly expense budget - Alex Rivera - February 2024"
}

Alternatively, use prepaid model where corporate operating account backs all card spending without individual employee funding.

6. Monitor Employee Spending

Subscribe to webhooks for real-time transaction notifications:

// Webhook listener
app.post('/webhooks/lithic', (req, res) => {
  const event = req.body;

  if (event.event_type === 'transaction.created') {
    const transaction = event.payload;

    // Send notification to finance team
    sendSlackNotification(
      `New expense: ${transaction.merchant.descriptor} - $${transaction.amount / 100} by ${getEmployeeName(transaction.account_holder_token)}`
    );

    // Request receipt from employee
    sendReceiptRequest(transaction.account_holder_token, transaction.token);

    // Update internal expense tracking
    logExpenseTransaction(transaction);
  }

  res.sendStatus(200);
});

Query transaction history:

GET /v1/transactions?account_token={account_token}&begin=2024-02-01&end=2024-02-29

7. Generate Expense Reports

Pull transaction data and generate reports:

// Fetch all transactions for employee for date range
const transactions = await lithic.transactions.list({
  account_token: employeeToken,
  begin: '2024-02-01',
  end: '2024-02-29'
});

// Group by category
const expenseReport = {
  employee: employeeName,
  period: 'February 2024',
  categories: {
    'Meals & Entertainment': [],
    'Travel': [],
    'Software & Subscriptions': [],
    'Office Supplies': [],
    'Other': []
  },
  total: 0
};

transactions.data.forEach(txn => {
  const category = mapMCCToCategory(txn.merchant.mcc);
  expenseReport.categories[category].push({
    date: txn.created,
    merchant: txn.merchant.descriptor,
    amount: txn.amount / 100,
    receipt: txn.receipt_url || null
  });
  expenseReport.total += txn.amount;
});

// Export to accounting system
exportToQuickBooks(expenseReport);

8. Reconcile & Close Period

At month-end, reconcile all transactions:

// Get all transactions with missing receipts
const unreconciled = await getTransactionsWithoutReceipts('2024-02');

// Notify employees to submit receipts
unreconciled.forEach(txn => {
  sendReceiptReminder(txn.account_holder_token, txn.token);
});

// Flag disputed transactions
const disputed = await getDisputedTransactions('2024-02');

// Generate reconciliation report
const report = generateReconciliationReport({
  totalTransactions: allTransactions.length,
  totalAmount: sumTransactions(allTransactions),
  reconciled: reconciledTransactions.length,
  unreconciled: unreconciled.length,
  disputed: disputed.length,
  categorized: categorizedTransactions.length
});

// Close accounting period
closeAccountingPeriod('2024-02', report);

Use Cases

Corporate Card Programs: Replace traditional corporate credit cards with modern expense management and real-time controls.

Startup Finance: Provide employee cards with spend limits while maintaining tight budget control for resource-constrained startups.

Remote Workforce: Manage expenses for distributed teams with virtual cards, digital receipts, and automated reporting.

Travel & Entertainment: Issue travel-specific cards with higher limits, international support, and per diem enforcement.

Contractor Spend: Provide limited-use cards to contractors and freelancers with strict merchant and amount restrictions.

Department Budgets: Allocate budgets to Marketing, Sales, Engineering, etc. with separate card programs and spending controls.

Project-Based Spend: Issue cards tied to specific projects or initiatives with budget caps and automatic reconciliation.

Subscription Management: Track and control SaaS spending with vendor-specific virtual cards for each subscription.