travel expense policy for employees

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Travel Expense Policy

It is the policy of [Company Name] to reimburse staff for reasonable and necessary expenses incurred during approved work-related travel.

Employees seeking reimbursement should incur the lowest reasonable travel expenses and exercise care to avoid impropriety or the appearance of impropriety. Reimbursement is allowed only when reimbursement has not been, and will not be, received from other sources. If a circumstance arises that is not specifically covered in this travel policy, then the most conservative course of action should be taken.

Business travel policies are aligned with company reimbursement rules. All business-related travel paid with [Company Name] funds must comply with company expenditure policies.

Authorization and responsibility

Staff travel must be authorized. Travelers should verify that planned travel is eligible for reimbursement before making travel arrangements. Within 30 days of completion of a trip, the traveler must submit a travel reimbursement form and supporting documentation to obtain reimbursement of expenses.

An individual may not approve his or her own travel or reimbursement. The travel reimbursement form must be signed by the executive director or the director of finance (for travel over $[amount]) or by the business manager (for travel under $[amount]).

Travel and reimbursement for members of the management team must be approved by the executive director or the director of finance and will be reviewed annually by the internal auditor.

Designated approval authorities are required to review expenditures and withhold reimbursement if there is reason to believe that the expenditures are inappropriate or extravagant.

Personal funds

Travelers should review reimbursement guidelines before spending personal funds for business travel to determine if such expenses are reimbursable. See Section II: Travel Expenses/Procedures for details. [Company Name] reserves the right to deny reimbursement of travel-related expenses for failure to comply with policies and procedures.

Travelers who use personal funds to facilitate travel arrangements will not be reimbursed until after the trip occurs and proper documentation is submitted.

Vacation in conjunction with business travel

In cases in which vacation time is added to a business trip, any cost variance in airfare, car rental or lodging must be clearly identified on the travel request form. [Company Name] will not prepay any personal expenses with the intention of being "repaid" at a later time, nor will any personal expenses be reimbursed.

Occasionally it may be necessary for travelers to request exceptions to this travel policy. Requests for exceptions to the policy must be made in writing and approved by the executive director or by the director of finance. Exceptions related to the director's or the director of finance's expenses must be submitted to the opposite person or to the treasurer of the board of trustees for approval. In most instances, the expected turnaround time for review and approval is five business days.

Travel Expenses/Procedures

General information Authorized business travel for staff that includes prepayments must be pre-approved.

Reimbursement of parking, mileage, gasoline in lieu of mileage and ferry or bus passes do not require requests if they are under $[amount]. Requests for reimbursement of expenses over $[amount] are to be submitted on a travel reimbursement form.

Permissible prepaid travel expenses Before the travel, [Company Name] may issue prepayments for airfare, rail transportation, rental vehicles, conference registration fees and cash advances. Applicable policies and methods of payments for these prepayments follow.

Airfare. Travelers are expected to obtain the lowest available airfare that reasonably meets business travel needs. Airfare may be prepaid by the business office.

Travelers are encouraged to book flights at least [amount of time] in advance to avoid premium airfare pricing.

Coach class or economy tickets must be purchased for domestic or international flights with flight time totaling less than five consecutive hours excluding layovers.

A less-than-first-class ticket (i.e., business class) may be purchased at [Company Name]'s discretion for domestic or international flights with flight time exceeding five consecutive hours excluding layovers.

Airfare may be purchased with a credit card or check through the business office with a request for payment form.

Rail transportation. [Company Name] will prepay rail transportation provided that the cost does not exceed the cost of the least expensive airfare.

Rental vehicles. [Company Name] will pay for approved use of a rental vehicle. See the section on reimbursements below in this section.

Conference registration fees. Conference registration fees can be prepaid with a credit card or check through the business office with a request for payment form. Business-related banquets or meals that are considered part of the conference can be paid with the registration fees; however, such meals must be deducted from the traveler's per diem allowance.

Travel advances. Cash advances are authorized for specific situations that might cause undue financial hardship for business travelers. These situations are limited to staff traveling on behalf of [Company Name]. A maximum of 80 percent of the total estimated cost can be advanced.

Expenses associated with the travel must be reconciled and substantiated within two weeks of the return date. The traveler must repay [Company Name] for any advances in excess of the approved reimbursable expenses. The department initiating the travel is responsible for notifying the business office to deposit any excess funds into the appropriate departmental account.

Travel advances are processed by submitting a completed request for payment form and travel request form to the business office. Reimbursement for any remaining expenses is processed on a travel reimbursement form approved by the designated approval authority.

Reimbursements Requests for reimbursements of travel-related expenses are submitted on a travel reimbursement form. This form must be accompanied by supporting documentation. If the requested reimbursement exceeds 20 percent of the total pre-trip estimate, the travel reimbursement form must be signed by the executive director or the director of finance.

These forms must be submitted to the business office within two weeks after the trip is completed. Travel reimbursement forms not submitted within this time frame require exception approval from the executive director or from the director of finance.

Reimbursement of travel expenses is based on documentation of reasonable and actual expenses supported by the original, itemized receipts where required. Reimbursements that may be paid by [Company Name] are shown below.

Airfare. If the airfare was not prepaid by the business office, an original itemized airline receipt, an e-ticket receipt/statement or an Internet receipt/statement is required. The receipt must show the method of payment and indicate that payment was made.

Rail transportation. If rail transportation was not prepaid by the business office, an original itemized receipt, original e-ticket receipt/statement or Internet receipt/statement is required. The receipt must show the method of payment and indicate that payment was made.

Automobile (personally owned—domestic travel). A valid driver's license issued within the United States and personal automobile insurance are required for expenses to be reimbursed. Drivers should be aware of the extent of coverage (if any) provided by his or her automobile insurance company for travel that is business or not personal in nature.

Reimbursement for use of a personal automobile is based on the [Company Name] mileage rate.

A staff travel reimbursement form is required for reimbursement of all vehicle-related expenses, including gasoline, wear and tear, and personal auto insurance. As of [date], the rate is [$] per mile. Travelers may opt to request reimbursement for actual gasoline expenses in lieu of the [Company Name] mileage rate. In these instances original, itemized receipts are required.

Automobile (rental—domestic travel). Reimbursement for a commercial rental vehicle as a primary mode of transportation is authorized only if the rental vehicle is more economical than any other type of public transportation, or if the destination is not otherwise accessible. Vehicle rental at a destination city is reimbursable. Original receipts are required.

[Company Name] authorizes reimbursement for the most economic vehicle available. In certain circumstances larger vehicles may be rented, with supervisory approval. The rental agreement must clearly show the date and the points of departure/arrival, as well as the total cost. Drivers must adhere to the rental requirements, and restrictions must be followed. Original receipts are required.

When vehicle rentals are necessary, [Company Name] encourages travelers to purchase collision damage waiver (CDW) and loss damage waiver (LDW) coverage. [Company Name] will reimburse the cost of CDW and LDW coverage; all other insurance reimbursements will be denied.

Drivers should be aware of the extent of coverage (if any) provided by his or her automobile insurance company for travel that is business or not personal in nature.

Parking fees, tolls and other incidental costs associated with the vehicle use are not covered by the rental agreement.

Travelers are strongly encouraged to fill the gas tank before returning the vehicle to the rental agency to avoid service fees and more expensive fuel rates.

Conference registration fees. If the conference fee was not prepaid, [Company Name] will reimburse these fees, including business-related banquets or meals that are part of the conference registration. Original receipts to support the payment are required. If the conference does not provide a receipt, then a cancelled check, credit card slip/statement or documentation that the amount was paid is required for reimbursement.

A prorated amount for the meals provided must be deducted from the traveler's per diem. See Meals (per diem) for more detail. Entertainment activities such as golf outings and sightseeing tours will not be reimbursed.

Registration fees paid directly by an individual will not be reimbursed until the conference is completed.

Lodging (commercial). The cost of overnight lodging (room rate and tax only) will be reimbursed to the traveler if the authorized travel is 45 miles or more from the traveler's home or primary worksite.

Exceptions to this restriction may be approved in writing by the executive director or by the director of finance.

[Company Name] will reimburse lodging expenses at reasonable, single occupancy or standard business room rates. When the hotel or motel is the conference or convention site, reimbursement will be limited to the conference rate.

Only single room rates are authorized for payment or reimbursement unless the second party is representing the agency in an authorized capacity. If the lodging receipt shows more than a single occupancy, the single room rate must be noted. If reimbursement for more than the single room rate is requested, the name of the second person must be included.

Meals (per diem). Per diem allowances are reimbursable for in-state overnight travel that is 45 miles or more from the traveler's home or primary worksite.

Per diem allowances are applicable for all out-of-state travel that is 45 miles or more from the traveler's home or primary worksite.

[Company Name] per diem rates are based on the U.S. General Services Administration Guidelines, which vary by city location. In addition to meals these rates include incidental expenses such as laundry, dry cleaning and service tips (e.g., housekeeping or porter tips). Incidental expenses, unless specifically cited in this policy, will not be reimbursed.

Per diem reimbursements are based on departure and return times over the entire 24-hour day and are prorated accordingly.

If a free meal is served on the plane, included in a conference registration fee, built in to the standard, single hotel room rate or replaced by a legitimate business meal, the per diem allowance for that meal may not be claimed.

Receipts are not required for per diem allowances. Per diem allowances are reimbursed after the trip is completed.

Business meals. Travelers are required to follow [Company Name] expenditure policies when requesting reimbursement for business meals. Original itemized receipts are required.

Business expenses. Business expenses, including faxes, photocopies, Internet charges, data ports and business telephone calls incurred while on travel status, can be reimbursed. Original itemized receipts are required.

Parking. Original receipts are required for parking fees (including airport parking) totaling $[amount] or more. The lodging bill can be used as a receipt when charges are included as part of the overnight stay.

Telephone calls. The costs of personal telephone calls are the responsibility of the individual.

Tolls. Original receipts are required for tolls totaling $[amount] or more.

Miscellaneous transportation. Original receipts are required for taxi, bus, subway, metro, ferry and other modes of transportation if costs are $[amount] or more for each occurrence.

Visa, passport fees and immunizations. If these items are required for international travel, their reimbursement is left to the discretion of your supervisor. If approved by the designated authority, original itemized receipts are required.

Nonreimbursable Travel Expenses The following items that may be associated with business travel will not be reimbursed by [Company Name]:

Airline club memberships.
Airline upgrades.
Business class for domestic flights or first class for all flights.
Child care, babysitting, house-sitting, or pet-sitting/kennel charges.
Commuting between home and the primary work location.
Costs incurred by traveler's failure to cancel travel or hotel reservations in a timely fashion.
Evening or formal wear expenses.
Haircuts and personal grooming.
Laundry and dry cleaning.
Passports, vaccinations and visas when not required as a specific and necessary condition of the travel assignment.
Personal entertainment expenses, including in-flight movies, headsets, health club facilities, hotel pay-per-view movies, in-theater movies, social activities and related incidental costs.
Travel accident insurance premiums or purchase of additional travel insurance.
Other expenses not directly related to the business travel.

Travel for Non-Employees Additional costs for travel, lodging, meal or other travel expenses for spouses or other family members will not be reimbursed unless the individual has a bona fide company purpose for engaging in the travel or attending the event. Such travel is generally limited to senior management and should occur infrequently.

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Building a better travel and expense (T&E) policy: step by step 

A travel and expense policy (T&E) is a dynamic set of rules regulating how employees book travel. From setting budgets on flights and accommodations to standardizing the process for expense reports, your T&E should answer any (and all) questions about company travel, so you don’t have to.

But whatever the scope of your policy, its main purpose is to control spending. Defining specific guidelines makes it much easier to predict how much individual travelers will spend – and determine if you need to get that number down. 

Plus, with a corporate travel expense policy in place, there’s no room for ambiguity. An expense is either authorized, or it’s not. Say bye-bye fraud.

What happens without a T&E policy?

Let’s just say, what can go wrong, will probably go wrong. 

At the end of the day, a travel and expenses policy aims to streamline business processes, save costs, and eliminate fraud. If these factors go unaddressed, you leave yourself vulnerable to: 

Overspending due to hidden costs if expenses are not under constant supervision.
Expense reports arriving late or without essential information if employees are unaware or unsure of specific guidelines.
A rise in fraudulent expense claims in the form of duplicate, exaggerated, and misreported business expense claims.
Without guidelines, fraudulent behavior cannot be controlled or addressed, and, therefore, encouraged further.
Without a fixed way of recording and storing expense data, you’re left with no insights into spending trends and patterns.

T&E is not one-size-fits-all

No two companies are the same, so naturally, not every company’s travel and expense policy is going to look the same. For example, some companies will need to reimburse incidentals, but that won’t really apply for others. Some provide per diem allowances while others only reimburse actual expenses. You get the picture.

The key to creating an effective and dynamic travel expense policy is to first figure out your organization’s specific needs from a control and spend perspective. And to figure out what you need, you’ll need to analyze your current expenses. Here’s some key factors to consider: 

How much does an average business trip cost?
What percentage of your employee’s travel?
How often do they travel? To where?
What is your return-on-investment (ROI)? This can be easy or difficult to measure depending on the nature of the trips.

(Pssst! All that data sound like a daunting task? Don’t worry – travel management software   can make this process so much easier.

Defining the scope of your T&E policy

Now that you know what you need, it’s time to set your guidelines.

Keep in mind: T&E policies are meant to manage and regulate the process for submitting an expense report. As you create it, here are a few expense categories to keep in mind:

1) Transportation

Transportation expenses can include airfare, train or bus tickets, car rentals, and taxi or ride-sharing services. A comprehensive travel and expense policy should clearly state which modes of transportation are allowed and what limits are in place for each.

For example, team members may be allowed to rent a car for up to a certain cost per-day or only use a ride-sharing service for trips under a certain distance. Are your employees flying first or business class? The policy should clearly state which class of flight bookings will be applicable for reimbursements. 

2) Lodging

Accommodations are another important aspect of business travel. The policy should state the hotels or hotel chains your employees are allowed to stay and what the maximum per-night rate is – and be sure to consider the discounted rates your travel management company  can offer you.

If hotels aren’t being booked through your travel booking software or dedicated travel consultant, make sure you drive travelers to your preferred booking solution. This way you can define capping amounts for hotel bookings and are not overpaying for hotels or other accommodations.

3) Meals and Per Diems

When defining a corporate travel expense policy, remember not to overlook meals and incidentals. The per diem – also known as a subsistence allowance – should cover these expenses, including meals, snacks, incidentals (such as laundry or tips), and even entertainment expenses. It should also provide guidance on what types of meals are covered and what limits are in place.

For example, employees may be allowed to expense a certain amount for lunch and dinner, but not breakfast or alcoholic beverages. Most importantly, set clear boundaries not to mingle personal and business expenses. So even though your policy does cover a few drinks with clients during a sales pitch, team members shouldn’t use it as an excuse to turn up at happy hour on the company dime.

4) Corporate credit card expenses

These cards are typically issued to employees who frequently travel for business, allowing them to charge expenses directly to your company. Not every organization implements corporate credit cards for travel, but if you’re one of the companies that do, you’ll need to lay some ground rules.

The expense policy should outline what types of expenses are allowed to be charged to the card (like airfare, hotel rooms, and meals), who can use one, and what limits are in place. Just as with per diems, discourage employees from using this card for non-business purposes by emphasizing the consequences for violating policy.

Creating an effective T&E policy

Every organization requires rules and regulations to perform its day-to-day operations smoothly. As such, you’ll need to think beyond the basics and deeply consider the current state of your travel expenses.

A well-written and well-communicated travel and expense policy streamlines travel expense management for the company and simplifies the employee process.

And trust us: you don’t want to get stuck scrambling for receipts when employees return from a training event or leave them in the dark while waiting for expense reimbursements (talk about a hit to employee morale).

But the work doesn’t end after successfully writing your first draft. Like any operation, an efficient T&E policy is enforced and consistently refined.

Communicate your policy to your employees. And if they try to claim excess reimbursement? Stand by your policy. Afterall, it’s there for a reason.

If your policy says it won’t pay for extra luggage fees, don’t pay them. If it sets a maximum mileage rate, don’t pay above that. The easier you make it to comply, the more your employees will guide themselves.

Phew – that was a lot. If the thought of building a business travel expense policy for your organization from scratch has you running for the nearest exit, don’t fret. Check out our travel policy template to guide the first draft of your policy.

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Company Travel Policy

A company travel policy is designed to outline a business's travel arrangement procedures and guidelines, stipulating which travel expenses are paid for by the company and how to manage the reimbursement process. A company travel policy should include a purpose statement, scope, authorization and reimbursement section, and travel arrangement processes.

Creating a detailed company travel policy will help ensure all business trips run smoothly, are secured ahead of time, and adhere to all company requirements.

Company Travel Policy - Free Template

Download this company travel policy template in Microsoft Word format.

Company Travel Policy Template:

Introduction..

When employees travel for company-related purposes, it is [ company name's ] responsibility to provide safe and reliable travel arrangements. This company travel policy serves to clarify the conditions and parameters of a company-paid trip.

The purpose of this company travel policy is to (a) outline the authorization and reimbursement process for travel arrangements and expenses; (b) list the company-paid travel expenses; and (c) establish protocols that oversee the travel arrangement process.

This company travel policy applies to all employees under contract at [ company name ], including paid interns, contractors, as well as seasonal, part-time, and full-time employees. [ Company name ] sees traveling out of the city, state, and/or country as a fully paid business trip, as well as one-day trips that are [ number of hours ] hours away from the office.

Authorization and Reimbursements.

All company travel arrangements must be authorized by senior employees at least [ number of weeks/months ] before the expected travel date, depending on the circumstances and the required travel arrangement period. Employees are not permitted to authorize their own travel arrangements.

Employees are expected to submit a Travel Expense Report at least [ number of days/weeks ] after the first business day back at work. On the Travel Expense Report, employees must include all company-paid expenses and personal expenses. The finance department is responsible for examining the Travel Expense Report and finalizing reimbursement payments.

Travel Arrangement:

All travel arrangements must be reserved at least [ number of weeks ] weeks before the travel date. The finance department is responsible for the booking and payment of all transportation, accommodation, and travel-related expenses.

Travel Expenses.

[ Company name ] employees are entitled to a company-paid travel ticket for any means of transportation the employee(s) require, including a [ type of class ] return plane, boat, train, and/or coach ticket, [ number of meals ] meals, and [ number of luggage ] luggage.

While traveling, employees can use a company-paid taxi service from and to the airport, hotel, and business location. If an employee wishes to travel for personal reasons, they will be financially responsible for the travel fare.

Accommodation.

[ Company name ] employees are permitted to stay in a [ number of stars ][ type of accommodation ] while traveling for company purposes. The finance manager is responsible for securing the [ type of accommodation ] room and paying for an employee's stay.

Other Expenses.

[ Company employees ] will be reimbursed for [ number of meals ] lunch(s) and [ number of meals ] dinner(s) for a maximum of [ $/meal amount ] per meal. If an employee is hosting a client of [ company name ], the entire meal will be reimbursed.

In addition, if an employee requires a meeting, boardroom, or conference room while traveling, [ company name ] will book the room and make payment.

Personal Travel.

[ Company name ] will not be financially responsible for any personal expenses and travel arrangements. If an employee chooses to travel with a partner, [ company name ] is not responsible for their partner's accommodation, leisure, and/or travel expenses. An employee is required to submit this information on the Travel Expense Report and produce payslips for their expenses only.

International Travel.

If employees are required to travel out of the country for business, [ company name ] is financially responsible for all travel arrangements, including accommodation, transportation, visas, travel insurance, and medical expenses. International business trips must be authorized at least [ number of months ] before the expected travel date.

The finance department is required to submit a Travel Expense Report before and after the trip. Both reports must be signed off by at least two senior officials before and after the trip.

Company Credit Card Policy

What should be included in a travel policy?

Introduction .
Purpose statement .
Authorization and reimbursements .
Travel arrangement (both business-related and personal) .

What is corporate travel policy?

A corporate travel policy is a formal document that details the procedures and rules of business-related trips. The policy mainly focuses on the arrangements, expenses, and authorization processes.

How do you write a travel expense policy?

Use our free, customizable company travel policy template in Word format.

What is a travel and expense policy?

A travel and expense policy is an alternative name for a company travel policy, which outlines the travel arrangements and expenses required on a company-paid business trip.

Employee handbook, expense reimbursement form, conflict of interest policy, code of ethics, professional code of conduct.

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Travel and Expense Policy: What Is It, Example Template, and Best Practices

Written by Rob Biedron
19 min read

Considerations for a Policy that Works for Your Business

How to create an effective policy for your organization, travel expense policy template.

To travel for work-related purposes, employees often need to submit a travel expense report detailing their costs.

This can include travel costs like airfare, hotel, and other miscellaneous expenses like meals and incidentals.

Many companies have a travel and expense policy outlining the rules and procedures for submitting these reports.

In this blog post, we will discuss what a travel and expense policy is, provide an example template, and outline some best practices.

Why You Need a Travel and Expense Policy

Establishing a travel and expense policy for your business is a wise choice.

A clear policy defines allowable expenses for any business trip, which reduces the chance of unnecessary or inappropriate charges.

It’s efficient and cost-effective to have a predetermined budget for each employee that adheres to the company’s financial regulations – this ensures employee reimbursements are issued following company standards.

Having all of these processes itemized allows you to track spending more accurately, so there won’t be unwelcome surprises during the budget season either.

With a travel and expense policy in place, your organization can manage employee journeys and reimbursements competently.

With rules in place, it’s easier to predict how much each traveler will spend on business travel expenses, making overall expense management easier.

Other benefits include:

Tax write-offs for the company and IRS regulations compliance.
Fraud prevention.
Streamlines reimbursement.

Using a blanket T&E policy may be tempting, but the fact is, no two companies operate the same way.

They should have customized policies that fit the company’s needs while supporting employees.

At its core, the policy should address how employees are expected to pay and be reimbursed for trips taken on behalf of their company.

The policy must also feature detailed guidelines surrounding who is authorized to book travel arrangements and any limits and restrictions.

Companies may also want to consider implementing a pre-trip authorization process, and requiring all expenses related to the trip to be documented in order due documentation for reimbursement purposes.

Keeping your travel and expense policy up-to-date with current laws, regulations, and industry standards is important for maintaining compliance with current laws, so companies should stay aware of changes that may affect their policies.

Put Finance and HR to Work Together

To start crafting a T&E policy for your organization, arrange a meeting with both finance and human resources.

Collaboration and cooperation between these two teams are crucial.

The finance department provides information about current expenses and supports creating the guidelines employees need to follow. HR then communicates the policy to employees and enforces compliance.

Consider Multiple Factors Unique to Your Organization

Some companies may choose to reimburse incidental expenses. Some companies provide a per diem allowance, while others only reimburse actual expenses.

Start by looking at your organization’s current travel spend. As you analyze the data, consider the following:

How often do employees travel?
How much does the average business trip cost?
What percentage of employees travel?

Measuring ROI on business trips can be difficult, depending on the nature of the trips and the reason for them.

With the answers to those questions in hand, consider:

Methods of Travel: Which methods of travel are acceptable? Will employees be able to travel in business class or first class, or is air travel limited to coach only? Will you cover any extra luggage fees? What about ground transportation? What’s the maximum spending limit? Are there special rules that apply to international travel?

Lodging Expenses: What is the limit for a hotel room? Are employees required to stay at a certain hotel or within a certain chain?

Personal Vehicle Expenses: How will employees report mileage? What’s the maximum you’ll reimburse for parking expenses?

Meal Expenses: What is the per diem for meals? Are all three daily meals covered? Are they allowed to take clients to dinner? Will you reimburse room service? Are entertainment and related expenses included while on the trip?

Miscellaneous Expenses: Think of this as the unexpected. What if an employee’s luggage is lost and they need to purchase new clothes? What if they get bumped from their flight, and there’s an additional fee to rebook? What if the car rental company doesn’t have the economy car that was booked?

Company Credit Cards: Who is allowed to use the cards, and what can they use them for?

Expense Reporting Process: How are employees to track their out-of-pocket expenses? Who do the employee expense reports go to? How do they submit them? Are original receipts required, or will scanned/photographed versions suffice?

Outline everything you deem acceptable in the above categories. If certain things aren’t covered, make sure those are clearly defined.

For example, meals are covered, but alcoholic beverages are not.

Define what is considered an acceptable business purpose. Will you cover trips for continuing education?

Define who is authorized to book travel arrangements. What booking tools can be used?

Define how to turn receipts and expense reports.

Define the acceptable timeframe for reimbursement requests (such as within 15 days after the trip is complete) and when employees can expect to receive the reimbursement.

Include any other guidelines for reimbursable expenses, including rules for upgrades, tolls, mileage rate, per diem rates for each department, gratuities, etc.

Once these details are outlined, it’s time to put them together into a formal travel policy.

Your business needs a travel management policy, but it can be hectic to put one together. Our template will help.

Your policy should be broken down into six sections:

Introduction

Travel booking process, business expense categories, non-reimbursable purchases, expense reporting and reimbursement process, travel support, safety, and duty of care.

Use this section to let your staff know your policy isn’t just more red tape – it’s designed to keep them safe, keep things fair, reduce confusion, and ultimately, save time.

Depending on your organization, you may have multiple policies – different policies depending on the department or type of employee. If that’s the case, your introduction should also include who the policy is for.

Use this section to include everything your team needs to know about where and how to book travel – whether someone will make the arrangements for them or they will make the arrangements themselves.

Here’s where you outline:

How to Book Travel

Include your process, method, and platform for booking any company travel. It’s ideal to use a platform to allow employees to book options within policy. If you do, include the name of the platform.

If employees cannot book their own travel, include the name and contact information of the travel agency or company employee who will take care of booking the travel arrangements.

Approval Process

Include the details of the approval process, especially for senior management. The approval process for the C-Suite and senior employees may vary from others.

Leisure Extensions

If you want business travelers to be able to extend their trip to the weekend or use vacation days for additional time, include rules around these extensions.

Include details about the allowable difference for return flights and what separates personal expenses from business ones.

Make it known that they will incur additional costs that your company will not reimburse.

Loyalty Program Usage

Many companies don’t let employees accrue personal loyalty points on business travels.

But, if you trust your team to do the right thing, include a line that says something along the lines of, “Employees must not choose more expensive travel options for the sole purpose of gaining additional loyalty points.”

Traveling with Non-Employees

Expenses related to traveling with spouses or other family members, pets, or friends outside of the company aren’t generally eligible for reimbursement.

If any situations are subject to approval, such as attending a networking event, outline these possibilities.

This is a crucial part of your template as it outlines what employees can expense. This is key to keeping things as cost-effective as possible.

Preferred vendors
Approved tools or methods of booking
Rules regarding allowed travel class
How many days in advance must flights be booked for both domestic and international travel.

Accommodations

Preferred vendors and negotiated rates, if any
Maximum nightly rate
Rules regarding standard rooms and upgrades – for instance, upgraded rooms are only allowed when standard is completely booked
Reimbursable costs – parking, etc.
Rules for booking house-sharing or apartment rentals

Rental and Personal Vehicles

Allowed types of rental car class
Number of employees expected to share a vehicle when traveling together
Mileage reimbursement rate, per mile or kilometer

Rail Travel

Type of ticket allowed

Taxis and Ride-Sharing Services

Maximum amount per transaction
When use of these services is allowed (particularly in areas where airport shuttles or public transport isn’t practical)

Events and Conferences

Reimbursement process for registration if it was not pre-paid.
Process for other event or conference-related expenses, such as meals or things not included in the registration cost

Meals, Travel, and Entertainment

The maximum reimbursable amount for each breakfast
The maximum reimbursable amount for each lunch
The maximum reimbursable amount for each dinner
Or a daily maximum or per diem
Personal meal expenses throughout the trip
Rules for business meals
Rules for client entertainment expenses, including maximum amounts and what’s allowed

Personal Telephone Use

The amount of the cell phone bill or percentage that can be reimbursed during the employee’s travel period. Include whether calls made for personal reasons will be covered.
Whether or not theft of or damage to the personal phone is reimbursable during business travel, and if so, the maximum allowable amount.

Keep a list of the things your company won’t reimburse, so people know ahead of time that certain things will come out of pocket at their expense.

Get input for your chief financial officer and the employees who travel most often to determine what’s far to exclude across the board.

It should be clear that your business expense policy will only cover travel-related and business-related expenses and nothing else.

Examples include:

In-flight purchases
Childcare or pet boarding
Costs related to non-employee travel
Laundry and dry cleaning
Room service
Damage to personal vehicles
Airline ticket change fees
Traffic violations or parking tickets
Airline club memberships
Excess baggage fees
Premium or luxury car rentals
Rental car insurance coverage
Minibar or alcoholic beverages
Online entertainment, movies, newspapers, etc.
Clothing and toiletries

This section should cover the following:

The expensing tool to use
The items that do not need to be added to the expense tool (such as if the trip is booked within the approved booking tool)
Who to submit reports to
What to include in the reimbursement requests
Deadline for request submissions
Typical processing time for requests
Policy on personal credit card use

Your policy needs to be something people want to read. It must include information they need to know to familiarize themselves with.

Your staff wants to stay safe while traveling, so including information about their safety and what to do if an emergency arises is key.

Tracking Whereabouts

Let your employees know that when they book with your approved tools or methods, the trip is tracked, so if there is an emergency, you’ll take steps to evacuate them. If you don’t know where they are, you can’t assist.

Include the approved tool’s name, and what they need to do to ensure their trip is tracked if they cannot book within the tool for a valid reason.

Travel Support

Include information about who to call if there are trip changes or cancelations. Provide contact information for the travel support provider, such as email address, phone number, etc.

Emergencies

If an emergency arises, there should be information about who to contact, including your travel insurance policy information. Include employee and vendor contact information for the point of contact in an emergency.

Implementing Your Policy

Customize the template to your needs, and automate it when possible.

This ensures employees will always book within policy guidelines at any given time.

Deploy the policy with employees, and collect feedback.

Make sure your team is clear on the policy and all its details. Ask them about how easy it is to use the approved tools.

Developing and deploying a travel policy is critical for procurement to keep a close eye on corporate travel expenditures. We hope this makes the process easier for you.

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Table of contents

What Is a Travel Policy For Employees?

Definition and purpose, objectives of an employee travel policy, reason why should organizations have a travel policy, compliance and cost control, employee satisfaction and retention, domestic travel policy, international travel policy, 1. cultural diversity and sensitivity, 2. cultural awareness training:, 3. client engagement:, 1. regional compliance:, 2. taxation:, 3. legal implications:, sample travel policy for employees.

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Crafting an Effective Travel Policy Template: The Complete Guide

travel policy template free
October 24, 2023

Travel policies are an integral part of any organization’s HR toolkit, and they play a important role in regulating and facilitating employee travel. But what exactly is a travel policy, and why is it so significant for modern businesses in the HRMS software industry?

A travel policy is a comprehensive set of guidelines, rules, and principles that govern how employees conduct and manage their business-related travel activities. It serves as a guiding framework that outlines the dos and don’ts, expectations, and procedures when employees are on the move for work purposes.

Note: You can download directly from here and edit as per your need.

A travel policy is a set of guidelines and rules governing employee travel and expenses incurred during business trips. Its primary purpose is to ensure that employees adhere to company standards while travelling for work, promoting cost control and compliance.

A well-structured travel policy aims to achieve several key objectives:

Cost Control: Managing travel expenses efficiently to minimize financial impact.

Compliance: Ensuring that employees adhere to company regulations and industry standards.

Employee Satisfaction: Creating a clear and fair travel framework contributes to employee satisfaction.

Risk Management: Mitigating potential risks associated with travel.

Why Should Organizations Have a Travel Policy

Company travel policy for employees are essential for organizations in the HRMS software industry, serving many purposes that benefit the company and its employees.

Implementing a travel policy ensures compliance with relevant regulations and standards. This is essential, particularly in a field where meticulous record-keeping and compliance are paramount. It also enables effective cost control, which is crucial in managing expense related to employee travel.

A well-structured HR policy, aligned with industry standards, ensures that your organization doesn’t face financial or legal penalties. Additionally, it reduces the risk of fraudulent expense claims, which can substantially impact your budget.

Employee satisfaction is directly tied to how well an organization handles its travel policies. A well organized travel policy, which aligns with employee needs and preferences, can significantly boost job satisfaction and ultimately lead to higher employee retention.

Employees are more likely to feel valued and appreciated when they see that their company has policies to support their travel needs. This can enhance their overall job satisfaction and reduce turnover rates.

Moreover, a travel policy clearly defining the reimbursement process and timeframes can contribute to employee satisfaction. Employees want to be assured that their out-of-pocket expenses will be reimbursed promptly and fairly.

Types of Employee Travel Policies

Depending on the nature of an organization and its global footprint, different types of travel policies may be needed.

Domestic travel policies are designed for employees who primarily undertake business trips within the country. Travel and expense policy addresses expenses and procedures relevant to domestic travel.

A well-structured domestic travel policy is crucial, especially for all companies with various clients and projects in the country. This policy should provide detailed guidelines on booking accommodations, transportation, and meal expenses for domestic trips.

Moreover, it should outline the approval process, expense reporting requirements, and reimbursement procedures for employees travelling within the country.

On the other hand, international travel policies are tailored to employees who travel internationally for work. They encompass broader considerations, including visas, foreign currency expenses, and international regulations.

An international travel policy is important for all IT companies with a global presence. It should cover visa requirements, cultural sensitivity training, travel insurance, and international tax implications. Additionally, the policy should provide guidance on handling emergencies abroad and obtaining consular services.

Furthermore, it should clearly outline the procedures for converting foreign currency, handling international expenses, and seeking reimbursement for expenses incurred during international trips.

Read more : Why Providing Employee Transport Services is Need of the Hour?

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Challenges in Implementing a Travel Policy in India

Implementing a travel policy in India can be particularly challenging due to cultural diversity and regulatory variations across different states. Companies operating in India must address these challenges effectively.

Cultural and Regulatory Diversity

India’s cultural diversity can impact employees’ perception of and follow the travel expense policy. Sensitivity to various cultures and customs is vital in maintaining employee satisfaction and adherence to the policy.

India is a melting pot of cultures, languages, traditions, and beliefs. With many diverse backgrounds and customs, it’s crucial to consider the cultural dimension of travel policy implementation.

To navigate the intricate web of cultural nuances, company travel policy must consider providing cultural awareness training to their employees. Understanding and respecting various cultural practices and etiquettes is essential, as it can significantly impact business relationships and overall success. This awareness enhances the travel experience and promotes a positive image of the company that respects and values cultural diversity.

HRMS software companies often engage with clients from various backgrounds. This makes cultural sensitivity even more vital. Employees should have the knowledge and skills to adapt to cultural expectations during client interactions, ultimately fostering better client relationships.

Regulatory Variations Across States

India’s federal structure gives rise to regulatory variations across different states, complicating travel policy implementation.

Companies operating in multiple Indian states need to be well-versed in the intricacies of regional regulations. Each state may have different rules concerning taxation, permits, and other aspects of travel, which should be incorporated into this policy to ensure compliance.

Tax laws can vary significantly between states, impacting expenses and reimbursements. A well-crafted business travel policy should address these variations and provide clear guidelines for employees.

Failure to adhere to regional regulations can lead to legal complications. As such, HRMS software companies should work closely with legal experts to ensure that their policy aligns with the specific requirements of each state they operate in.

In conclusion, an effective travel policy is a crucial tool for all organizations, helping them manage employee travel efficiently, maintain compliance, and enhance employee satisfaction. Companies can create policies that meet their specific needs and promote successful business travel by understanding the types of travel policies, addressing unique challenges, and utilizing sample templates.

With Superworks’ free travel policy template, organizations can streamline their operations, reduce costs, and ensure the satisfaction and retention of their valued employees.

Also, See: Data Retention Policy

Written By :

Alpesh Vaghasiya

The founder & CEO of Superworks, I'm on a mission to help small and medium-sized companies to grow to the next level of accomplishments. With a distinctive knowledge of authentic strategies and team-leading skills, my mission has always been to grow businesses digitally. The core mission of Superworks is Connecting people, Optimizing the process, Enhancing performance.

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Benefits of Having a Corporate Travel Policy

Key elements of a corporate travel policy, creating a corporate travel policy, best practices for implementing a corporate travel policy, ensuring compliance with a corporate travel policy, sample corporate travel policy, what is a corporate travel policy, and why is it important, what should be included in a corporate travel policy, how can organizations create an effective corporate travel policy, the bottom line.

Corporate Finance

How to Set a Corporate Travel Policy: Key Elements, Best Practices, and Compliance

A corporate travel policy is a set of guidelines and best practices that govern employee travel. Organizations that have corporate travel policies use them to ensure that all employees follow the proper protocols when booking business-related travel and logging expenses.

While travel policies are often standard for large corporations, smaller businesses can also benefit from instituting them.

Key Takeaways

A corporate travel policy is essential for organizations to manage travel expenses, ensure compliance, and streamline processes.
Key elements of a corporate travel policy include travel booking procedures, expense reimbursement guidelines, travel safety measures, and approval processes.
Best practices for implementing a corporate travel policy include effective communication, employee training, and regular policy review and updates.

Having a corporate travel policy can yield a range of benefits, both for business owners and their employees.

From the perspective of business owners, a corporate travel policy can allow you to:

Monitor employee travel expenses to ensure accuracy and detect possible instances of fraud
Establish guidelines for which hotels, airlines, and other travel organizations that employees may book through
Ensure that employees understand which travel expenses may be submitted for reimbursement
Organize expense data accurately and quickly
Remain compliant with Internal Revenue Service (IRS) tax rules and regulations regarding business travel
Minimize waste and streamline your accounting systems

On the employee side, having a standard corporate travel policy in place can help employees avoid a scenario where they may be waiting weeks or months to be reimbursed for expenses they’ve paid out of pocket because the company can’t verify what they spent.

Employers should take care to understand which business travel expenses are deductible and which ones are not under the Internal Revenue Code (IRC) .

There’s no one-size-fits-all corporate travel policy template or blueprint that businesses can follow. That’s an advantage, however, as it allows you to create a travel policy that fits your business’s needs.

Generally speaking, a corporate travel policy should cover rules and guidelines for the following:

Airline, hotel, and rental car reservations
Other transportation expenses , such as rail travel or ride-sharing
Employee spending, as it pertains to meals, entertainment, phone calls, and other necessary expenses
Parking fees and toll passes
Acceptance of gifts when meeting with clients, or expensing of gifts presented to clients
Medical care and travel insurance
Currency exchange fees and international banking
Employee submissions of receipts for reimbursement
Review, approval, and payment of submitted expenses
Personal safety of employees
Security of business equipment or documents

When in doubt, it’s better for a corporate travel policy to cover more ground rather than less. Making your organization’s travel policy as comprehensive as possible can help to avoid confusion with regard to which expenses are acceptable and when employees can expect to be reimbursed.

Creating a corporate travel policy is a multistep process. Breaking each step down can make it easier to manage and create a policy that’s tailored to your business’s needs.

Identify Your Objectives

First, consider what you need a corporate travel policy to do for you. Are you primarily interested in minimizing costs or preventing abuse? Do you want to ensure that employees are booking with approved organizations and taking steps to remain safe while they’re traveling? Considering your top three objectives can offer a good starting point for developing your corporate travel policy.

You can use those insights to draft a purpose statement outlining the policy’s intentions. This doesn’t need to be lengthy, but it should convey what the policy is designed to do.

Get Your Team Involved

A corporate travel policy is only as good as its ability to meet the needs of those who are expected to adhere to it. Asking some questions about your team and your business’s travel activities can help you pin down what your policy should cover.

For example, ask yourself the following:

Do any employees require special accommodations for travel related to a health condition or disability?
Are there any destinations that the business travels to regularly?
Are there any preferred hotels, airlines, or rental car companies that the business likes to use?
Is there a preferred process for booking trips or answering questions?
Who will be responsible for approving bookings, answering employee questions, approving expenses, and submitting them for payment?
How will employees pay for expenses they book?
If employees are using corporate credit cards , what rules are they expected to follow?
How will they submit those expenses for reimbursement, and what information will they need to provide?

Polling your employees can further inform your decision making. For example, an employee who travels frequently may know which hotels are better than others or which airlines offer the best rates. Your employees may appreciate being given a chance to share their insights and opinions on what the company’s travel policy should look like.

If you’re considering corporate credit cards for employees, look for one that allows you to set individual spending controls for each card.

Draft the Policy, and Review It Carefully

Once you’ve collected all the feedback you think you’ll need, you can get to work on fleshing out your corporate travel policy. Again, you want to be thorough in detailing the policies and procedures that you expect employees to follow.

After you’ve written out the first draft, go through your policy a second time. Is there anything that could be explained more clearly? Any areas that may cause confusion for employees? Anything you’ve left out entirely?

You may need to review your travel policy several times to make sure you’re covering all of the most important bases. Once you have the language down, you can review it one final time to check for spelling and grammar errors.

Share the Policy with Your Staff

The final step after creating a corporate travel policy is conveying it to everyone in the company who’s affected by it. If employees don’t know what’s in the policy, it’ll be very difficult for them to adhere to it.

Remember that you’ll need to repeat this step anytime you make changes to the policy. If you add something new or take something away, it’s your duty to convey that to your employees so they’re aware of the changes.

Once you’ve created a corporate travel policy, you’ll need to implement it. These tips can help with introducing your company’s travel policy and enforcing it.

Ensure that employees know who they can direct questions to regarding business travel bookings, expense reporting, and reimbursement.
Set a specific time frame for submitting expenses for reimbursement and processing payments to employees.
Consider scheduling an employee meeting or workshop to walk through the details of the travel policy and answer any questions that might arise.
Ensure that all new hires get a copy of the travel policy.
Regularly review and update your travel policy if necessary.
Conduct monthly reviews or audits of travel expenditures to check for errors and potentially detect fraud or abuse.

It’s also important to specify what consequences, if any, employees may face if they’re found to be noncompliant with the policy. That may include having travel privileges restricted or, in a worst-case scenario, dismissal if evidence of fraud is found.

Ensuring compliance with your company’s corporate travel policy is important from a cost perspective, as you don’t want to blow your travel budget. There are different tactics you can use to maintain compliance across all stakeholders .

Update your policy regularly to reflect the company’s latest practices and guidelines.
Simplify the policy if necessary to avoid confusion.
Clearly communicate compliance expectations, as well as the consequences of noncompliance, to all employees.
Ensure that the policy is detailed thoroughly during the onboarding process for new hires.
Conduct regular reviews and audits of travel expenses to look for any signs of noncompliance.
Consider using a business travel management tool or software to keep track of bookings and expense reporting.

You may also place safeguards on travel bookings to prevent employees from straying outside the boundaries of the policy. For example, if you use a corporate travel agency, you might direct the agency to automatically reject any attempted bookings that don’t involve a preferred travel partner.

Corporate travel policies are common across a variety of industries, from finance to retail to the government. Examples of organizations that maintain corporate travel policies include:

JPMorgan Chase & Co.
Columbia University
U.S. Department of the Interior

All of these sample policies have similar characteristics, in that they outline the purpose of the policy, specify the rules that apply to booking accommodations, and offer detailed instructions to employees on how to submit expense reports for reimbursement. It may take some time to work out your travel policy, but reviewing examples like these can give you an idea of what to add.

If writing a detailed corporate travel policy yourself seems daunting, you may consider outsourcing this task to a consultant who’s experienced in compliance.

A corporate travel policy establishes the guidelines for booking travel expenses and submitting them for reimbursement. Travel policies can also extend to things like personal safety and security of business equipment or documents. Having a corporate travel policy is important for minimizing fraud and abuse, while ensuring more accurate record-keeping.

At a minimum, a corporate travel policy should outline approved practices for booking airfare, hotels, rental cars, and other necessary travel expenses. It should also detail the process for submitting expenses for reimbursement, including how expenses are approved and when employees can expect to be paid.

The first step in creating an effective corporate travel policy is understanding what your business needs. Forecasting your budget for business travel and setting proper limits on which expenses are acceptable are the next steps. Organizations must also ensure that all employees are aware of the corporate travel policy and understand how to adhere to it.

A corporate travel policy may be a necessity if your employees take regular business trips to meet with clients or prospective clients, attend professional conferences or seminars, or participate in career training. If you don’t yet have a policy in place, you may want to set that as a priority for your business. Having a clear policy to follow leaves little room for misunderstandings and mismanagement of travel privileges.

Internal Revenue Service. “ Understanding Business Travel Deductions .”

JPMorgan Chase & Co. “ JPMorgan Chase Bank N.A. Supplier Travel and Expense Policy .”

Best Buy Partner Portal. “ Vendor Travel and Expense Reimbursement Policy .”

Columbia University, University Policies. “ Travel Expense Policy .”

U.S. Department of the Interior. “ Travel .”

Starbucks. “ Non-Partner Travel and Business Expense Standard—U.S. and Canada .”

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Building a better travel & expense (T&E) policy: step by step 

But whatever the scope of your policy, its main purpose is to control spending. Defining specific guidelines makes it much easier to predict how much individual travellers will spend – and determine if you need to get that number down. 

Plus, with a corporate travel expense policy in place, there’s no room for ambiguity. An expense is either authorized, or it’s not. Say bye-bye fraud.

What happens without a Travel and Expense policy?

Let’s just say, what can go wrong, will probably go wrong. 

At the end of the day, a travel and expenses policy aims to streamline business processes, save costs, and eliminate fraud. If these factors go unaddressed, you leave yourself vulnerable to: 

Overspending due to hidden costs if expenses are not under constant supervision.
Expense reports arriving late or without essential information if employees are unaware or unsure of specific guidelines.
A rise in fraudulent expense claims in the form of duplicate, exaggerated, and misreported business expense claims.
Without guidelines, fraudulent behavior cannot be controlled or addressed, and, therefore, encouraged further.
Without a fixed way of recording and storing expense data, you’re left with no insights into spending trends and patterns.

T&E is not one-size-fits-all

How much does an average business trip cost?
What percentage of your employee’s travel?
How often do they travel? To where?
What is your return-on-investment (ROI)? This can be easy or difficult to measure depending on the nature of the trips.

(Pssst! All that data sound like a daunting task? Don’t worry – travel management software   can make this process so much easier.

Defining the scope of your T&E policy

Now that you know what you need, it’s time to set your guidelines.

Keep in mind: T&E policies are meant to manage and regulate the process for submitting an expense report. As you create it, here are a few expense categories to keep in mind:

1) Transportation

2) Lodging

If hotels aren’t being booked through your OBT or dedicated travel consultant, make sure you drive travellers to your preferred booking solution. This way you can define capping amounts for hotel bookings and are not overpaying for hotels or other accommodations.

3) Meals and Per Diems

4) Corporate credit card expenses

Creating an effective T&E policy

A well-written and well-communicated travel and expense policy streamlines travel expense management for the company and simplifies the employee process.

But the work doesn’t end after successfully writing your first draft. Like any operation, an efficient T&E policy is enforced and consistently refined.

Communicate your policy to your employees. And if they try to claim excess reimbursement? Stand by your policy. Afterall, it’s there for a reason.

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What is a travel and expense policy a comprehensive guide.

A travel and expense policy serves a number of purposes for your business. For one thing, it’s essential to control costs. Think about it this way. As a business owner, you claim as many tax write offs as you can. If you’re smart, you do the same on your personal tax return. It’s not cheating. You’re just trying to get all the money you’re entitled to. Honest employees treat business expenses the same way. If they’re allowed to claim an expense, they’re going to do it. A policy simply sets the ground rules.

Another important reason to have a travel and expense policy is to prevent fraud. Without a policy in place, even advanced accounting software can have trouble doing this. With a policy in place, there’s no ambiguity. An expense is either permitted, or it’s not.

Let’s talk a little more about T&E policies, and why your company should have one.

Here’s What We’ll Cover:

Travel and Expense Policy Basics

What factors should i consider, creating an effective policy, how do i enforce a travel and expense policy, key takeaways.

A travel and expense policy is a set of rules that defines which expenses are acceptable. It will set out how employees book travel for business trips, as well as other similar costs. As a basic example, companies will require original receipts for any purchases. Employees may also be required to put business expenses on a company credit card.

The main purpose of a T&E policy is to control spending. With no policy in place, it can be tough to predict employee spending. By creating specific rules, it’s easier to guess how much any individual traveler will spend.

To create a travel and expense reimbursement policy , the company’s finance and HR teams will need to collaborate. Finance can help with data on current expenses, and help create guidelines. HR can ensure that policies are communicated effectively, as well as that the company is compliant with applicable laws.

Once a policy is in place, employees will then need to follow those guidelines for travel and other business expenses. The policy will tell employees how much they’re allowed to spend, how to track their spending, and how to get reimbursed. There will also be limits on different types of purchases. For instance, many companies will reimburse business meal expenses, but not alcoholic beverages.

At this point, your finance team will need to enforce the policy. If expenses do not fall within the guidelines, they should not be reimbursed. You may also want to provide tools like company credit cards to make adherence easier. You’ll also need to continually communicate your policy to new employees, and update existing employees on any changes.

Not all companies should have the same T&E policy. Some companies need to reimburse incidental expenses, while for others, that’s not a concern. Some companies provide a per diem allowance, while others only reimburse actual expenses.

Before you create your policy, you should analyze your current business travel expenses. Expense and receipts tracking software can make this much easier. In your analysis, consider the following factors:

How much does an average business trip cost?
What percentage of your employees travel?
How often do they travel?
What is your return on investment? This can be easy or difficult to measure, depending on the nature of the trips.

Now that you know the answer to these questions, it’s time to start writing your policy. As you create it, make sure to keep the following in mind:

Travel – What methods of transport are acceptable? Are employees allowed to travel first-class or business class? Will you reimburse for extra luggage? What is the overall spending limit?
Personal vehicle expenses – How are employees reporting their mileage? And what are your limits for parking expenses?
Lodging Expenses – What is the acceptable rate for a hotel room? Do employees need to stay at a certain hotel?
Meals – What is your employees’ per diem allowance for meals? Are they allowed to take clients out to dinner? Is room service included?
Company credit cards – Who is allowed to use them? What are they allowed to use them for?
Expense reporting process – How do employees keep track of their out-of-pocket expenses? Who do they report them to? How?
Miscellaneous expenses – What if an employee’s luggage is lost, and they need to buy clothes? What if they get bumped from their flight and need to pay an additional cost to re-book?

If your travel and expense policy answers all of these questions, you’re well on your way to creating an effective policy.

When you’re creating your policy, you’ll need to think about more than just the basics. You’ll also need to think deeper about the relationship your business has to expense reports .

For one thing, it’s important to consider who’s traveling. Different team members may have very different needs. For example, it probably doesn’t make sense for your CEO to stay at the Best Western. Even if you’re trying to cut costs, you want your CEO to present a certain image. On the other hand, a budget hotel makes perfect sense for a field technician or junior employee.

Another question is how your employees are going to be reimbursed. Will they receive a separate check, or will the money be rolled into their regular paycheck? From a financial perspective, this may seem irrelevant. But it’s important to have a standard procedure for accounting purposes.

On a more mundane level, what’s your travel budget? If you need to tighten your belt, you’ll want to craft a stricter policy. On the other hand, you may have money to spare. In that case, you could use generous travel allowances as a way to attract new talent.

Last but not least, you need to communicate your policy clearly. You don’t want there to be any ambiguity about which expenses are acceptable. The clearer you are from the outset, the less trouble you’ll have enforcing compliance. This also means distributing your policy to new employees, and making it available on your company website.

A travel and expense policy is only effective if people actually follow it. So how do you make sure your employees’ expense reports comply with company policy?

The first step, as we mentioned, is to communicate your policy to your employees. Most people want to follow the rules, so make it easy for them. The expense reporting process should be easy to understand. Travel expense reports should be simple to fill out, and employees should be reimbursed promptly. The easier you make it to comply, the more your employees will police themselves.

But what do you do about people who try to claim excess reimbursement? To begin with, you can stick to your guns. If your policy says you don’t pay for parking tickets, don’t pay for them. If it sets a maximum per diem rate, do not reimburse above that. And never pay for expenses without an itemized receipt.

Software can be helpful in this regard. For example, there are business travel booking services that will disallow certain types of flights. You can require your employees to use that particular service. Meanwhile, expense tracking software can help you monitor where your expenses are going.

As you can see, every business needs the policy to cover business travel expenses. Fortunately, it’s a simple task that any competent lawyer can handle. Not only that, but there are plenty of free examples online.

We hope you enjoyed this guide. For more articles and blog posts, take a look at our resource hub . There, you’ll find reams of useful information to help your business succeed.

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How To Create a Travel and Expense Policy [With Template+ Industry Examples]

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Business travel has seen massive changes in the last five years, and expense reimbursements are now harder to manage than ever before. In this article, we share an expense policy template and guidelines to make sure employees submit the right information from the get-go.

A travel and expense policy is a collection of guidelines outlining how individuals should plan business-related travel, which expenses are eligible for reimbursement, and how reimbursements are managed. It outlines the company's dos and don'ts for all permitted business trips in order to prevent fraud and save expenses by enhancing budget transparency.

Having such a policy is crucial for simplifying travel and expense (T&E) management procedures, rendering company costs more predictable, and assisting employees in understanding the spending caps of an approved business trip. This also goes a long way in improving the employee experience .

Before we go through the business travel and expense policy template, let us look at what your policy should contain.

Learn More : Travel and Expense Management: Definition, Significance, Benefits, Key Features & Best Practices

Business Travel and Expense Policy Must-Haves

A robust policy on travel and expenses should anticipate all possible questions from all stakeholders. When is it possible to upgrade or downgrade between business class and economy class on flights? Can non-employees accompany a business traveler? Are there distinct sets of regulations for local and international travel?

Typically, a company's finance and human resources departments are responsible for drafting its travel and spending policies. If an organization has a designated manager for business travel , they may also participate.

Since the standards should be unambiguous and comprehensive, a travel and expenditure policy is generally extensive.

The template we share should act as a guide, and HR managers need to customize and extend it as per their needs. But no matter which travel and expense policy template you choose, it should have the following sections:

Purpose : You should convey to all stakeholders that the policy is not merely a procedural step, but also a precaution to guarantee impartiality, minimize manual labor, and improve budgetary management altogether.
Business travel booking process : In this section, you must describe how to reserve airline tickets and lodgings, mentioning the company-approved booking tool, vendor, or platform.
Expense categories : Here, you will detail the various spending categories, such as business travel expenses, accommodations (hotel, Airbnb, or residences), lunches and dinners, phone charges, commute fees, and any asset management expenses incurred during the business trip.
Exceptions : To eliminate ambiguity, the T&E policy must specify which charges are excluded.
Expense reimbursement process : The policy should specify the method for submitting expenditure reports, the individual responsible for receiving them, the submission deadline, and the typical processing time for expense reimbursements .
Roles and responsibilities : The travel and expense policy should end with a detailed list of responsibilities assigned to the employee, their manager, various approvers, the HR team, and the T&E accountant.

Now let us go through a policy template that covers these elements, and other essentials.

Learn More: How To Automate Travel Expense Reporting in Enterprises

Business Travel and Expense Policy Template

The following T&E policy template has 12 sections, covering the most important sections you need. You can expand or add to the clauses to tailor the policy as per your organizational culture, budget, and nature of business:

This policy is intended to:

Describe the categories of expenses which are reimbursable by the organization.
Inform personnel of their obligation to regulate and disclose travel and entertainment expenses.
Describe the actions an employee must take to submit and receive compensation for travel expenditures.

Guiding principles

The policy of the organization is to compensate workers for any required, acceptable, and genuine expenditures incurred while traveling on approved business.

The documentation and approval of travel costs must be listed on a travel expense statement. Each employee is responsible for adhering to business rules while making work-related purchases. In addition, it is the manager's job to comprehend the reasons for the expenditures and ensure that they've been reported in accordance with the established policy.

Although these rules are meant to be exhaustive, it is difficult to anticipate every circumstance a traveler may experience. The traveler is required to follow these recommendations conservatively, commensurate with normal living standards, and use sound business judgment in situations where the policy has been exceeded by evolving circumstances.

Preferred vendors

Our organizational travel agency is <travel agency name>. Travel plans may be scheduled with any agent who is available. The local office's telephone number is <(xxx) xxx-xxxx>.

The travel agency will be tasked with finding the most affordable tickets and housing costs. If you must stay at a hotel that is more expensive than the allocated hotel, you must provide enough reason prior to making travel plans. The same policy applies to automobiles, air travel, etc.

Air travel policy

LFR : All individuals flying with an airline must choose the Lowest Fare Routing (LFR) option. LFR is quoted as the minimum rational price for the business trip, (where possible).

Provide airfare discounts for round-trip travel.
The entire layover duration should not exceed one hour.
Allow not more than one intermediate stop each way.
Exceptions to the policy document will be permitted with approval from the employee's supervisor in order to authorize additional costs.

Approved travel class : Business, as well as First Class travel, isn't permitted unless the employee pays for it. Employees engaged in airline reward programs may utilize their private upgrades in conjunction with the company's reservation at the lowest available rate.

Stopovers : Stopovers en route that are reasonable may be permitted, given that:

They have no negative impact on or interference with the accomplishment of the intended business goal.
These do not lead to significant work time loss.
The reported travel expenses do not exceed the appropriate airfare between the departure point and the work destination.
If such a layover occurs, the company takes no liability or responsibility for any employee's acts or actions that take place during or as a result of the stopover.

Chargebacks : Airline tickets are deemed legal tender and should not be misplaced or discarded. Please return any unused tickets or ticket sections to the organization. After that, the tickets will be remitted to the travel agent for credit. Do not return unused tickets to the airline or travel agent directly.

Car rentals and commutes

Car rentals are often the most expensive means of transportation and ought to only be used when local transit is impracticable or more expensive because of the nature of the journey or the sites being visited. Note that the taxi driver must acquire documentation for the fare charged.

Please note that automobile rental volume discounts apply. When you make your bookings, the travel agents will be able to inform you of the car rental company we use.

A predetermined sum of <$xxx> per mile or km> shall be paid for each mile or kilometer traveled for business purposes in a privately-owned vehicle permitted for business use and driven for such purposes.

Accommodation

At the time hotel bookings are made via the company's tour operator, the best available pricing for rooms of reasonable quality in the most suitable area will be arranged. The passenger should confirm, upon arrival, that the rate displayed on the schedule is the price they get.

Typically, the employee should choose establishments that are appropriately priced for the area and compatible with regular living conditions.

Date, amount, location, and description of the nature of the business must be included for business dinners with customers or other colleagues. Include a list of the names of those who were entertained.

Only wine and bar expenses linked only with a work meeting and not exceeding $xxx> per individual present are reimbursable. Employee entertainment isn't a reimbursable cost.

Telephony charges

Employees traveling for work are authorized to make an appropriate number of long-distance calls home to confirm their arrival, make preparations for their return, and take good care of urgent personal problems that cannot wait.

Regular business travel ers will be issued with calling cards for local and long-distance calls while on the road.

Request for cash advances

A cash advance of up to <$xxx> per day of business travel may be requested by filling out a Request for Cash Advance application.

All travel advance requests must be authorized and sent to the Accounts Payable division at least three working days before the traveler's departure.

Miscellaneous policy inclusions and exclusions

Expense reporting.

<authority> regulations demand that traveling employees maintain a proper record for each trip and display all essential information to support each expense (who, what, why, when, as well as how much).

The due date for expense reports is <e.g., thirty (30)> days following the first expenditure.

Entertainment expenses incurred in the course of achieving business objectives must be evidenced by invoices for all expenses and supporting documents outlining the dates and locations of entertainment, the names and number of individuals involved, the business relationship between all parties, the business purpose, and the amount of each individual expenditure.

Roles and responsibilities

Learn More: Rethinking Your Travel & Expense Management With Smarter Technology

Examples of Business Travel and Expense Policies to Inspire You

Remember that there’s no hard and fast rule when it comes to adhering to a T&E policy template. Companies around the world customize their policies as per their requirements; here are a few notable examples.

The expense policy at Netflix consists of simply five words: "Act in Netflix's best interest." It aligns with Netflix's general cultural code, which has a comprehensive subsection on freedom and accountability. For example, the company's maternity leave policy includes the phrase "take care of your baby and yourself" and specifies that new parents often need 4 to 8 months.

The policy document for BBC's business travel and expense reimbursement is extremely detailed. In addition to being consistent with the company's employee-centric culture, there are laws limiting "late night/early morning transport" (LNEMT), which is reasonable given the operational hours of its business. If payment from the BBC was delayed, and this was the basis for the interest, employees may claim credit card interest expenses.

FedEx's policy reads more like a legally binding document than a statement of guidelines. Page one of the policy specifies that "termination" is a potential consequence for workers who violate the policy. It is a good idea to spell this out and avoid legal ambiguity later on.

Learn More: Make Your Business Go Places With Darwinbox’s Brand New Travel Module!

Policies for business travel and expense reimbursement are meaningless unless you have a system to enforce them. That’s where T&E management software like Darwinbox comes in.

With a unified platform, you can integrate your expense policy with payroll and attendance and automatically receive information to simplify expense reimbursements . Schedule a demo with Darwinbox to learn more !

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The Importance of Well-Defined Travel and Expense Policies for Businesses

Well-defined and organized travel and expense policies are crucial for any small business. A recent Capterra report reported 90% of SMB managers expect a surge in opaque credit card payments. Having a clear policy helps guide employees, streamline processes, minimize confusion and errors, and ultimately save time and money.

What is a Travel Expense Policy?

A travel and expense policy is a formal document that provides guidelines for business-related travel and expenses. It outlines the types of expenditures that the company will reimburse, such as transportation, meals, entertainment , remote expenses , lodging, and specifies the procedures for submitting expense reports.

Policies are vital tools for businesses to foster a culture of financial responsibility. The policy ensures fair treatment of all employees, maintains financial control , and reduces the potential for fraud.

Why Travel and Expense Policies are Important for Small Businesses

For small businesses, where budgeting is especially tight, having a well-defined travel and expense policy helps with cost management, transparency, fairness, and overall operational efficiency. Here’s why:

Cost Management: These policies give clear guidelines on what’s acceptable, so you can prevent overspending and make the most of your limited resources.
Transparency: With these policies, you can keep track of employee spending, avoiding any financial issues or misuse that could hurt small businesses.
Fraud Prevention: Detailed policies act as a deterrent to fraudulent claims, which could seriously impact a small business’s finances.
Efficient Processes: Having a travel and expense policy in place standardizes the process for claiming and reimbursing expenses. That saves time for everyone involved.

Minimizing the Cost of Travel for Company Employees

Travel and expense policies play a crucial role in cutting down travel costs for businesses. These policies give clear guidelines on what expenses are acceptable and set limits to prevent overspending. For example, policies might say to use economy class travel, share accommodations, or limit meal allowances, all to control excessive spending. And policies often include procedures for booking cost-effective travel through pre-negotiated suppliers.

Be sure to clarify:

Where do employees book flights?
How far in advance should airfare be booked?
What classes of airfare are acceptable?
Can employees use frequent flyer benefits?
What additional flight expenses are acceptable, including flight change fees, WIFI, upgrades, and baggage fees?
What hotels have negotiated rates with your company?
Can employees use an AirBnb?
What room types and upgrades are acceptable?
What is the maximum nightly rate?
Which additional lodging expenses are acceptable, including WIFI, mini-bar, tipping, and parking?
When should employees use rail, their personal cars, rental cars, taxis, or rideshares?
What is the maximum daily rate for rental cars?
What happens if a rental car incurs damage, tickets, fines and traffic violations?
Which transportation fees are acceptable, including parking, airport parking, and tolls?

>> Related: Mapping the Travel Expense Accounting Process <<

Protecting Your Company’s Bottom Line

Travel and expense policies are important in protecting a company’s bottom line. Deliberate and unintentional fraudulent activity costs companies $125,000 a year on average!

They help avoid unnecessary spending by setting clear guidelines for valid business expenses.
T&E policies also prevent fraud and misuse of funds through strict procedures for claims and reimbursements, like needing itemized receipts and mandatory reviews.
Plus, they streamline expense reports and reimbursements, saving time and reducing administrative costs.
T&E policies promote transparency and accountability, creating a culture of fiscal responsibility that boosts the company’s financial health.

>> Related: Corporate Travel Policy Best Practices <<

Preventing Employee Ignorance by Clearly Stating the Company’s Expectations

When building your policy, remember it exists to keep spending at a level that’s right for your business. To eliminate confusion, provide examples of allowable and non-allowable expenses.

Setting these clear guidelines is the first part of creating a (nearly) foolproof policy. But more complicated policy isn’t necessarily going to save you more money or increase compliance. Instead, focus on aligning your policy to your employees travel needs, incentivizing better behavior, and keeping employees happy and productive.

A few tips for a successful policy:

Involve stakeholders in the process — striking a balance across their varying needs increases your chances of adoption and better serves your business as a whole
Keep it updated — if you haven’t updated your policy in two years, it’s probably outdated
Don’t be too vague — employees’ varied backgrounds and values can lead to drastically different interpretations of a vague policy
But still keep it simple —the longer and more nuanced your document, the more likely employees are to skim over it or ignore it all together

>> Download TravelBank’s Travel Policy template <<

Keeping Your Business Audit-Ready

Having clear travel and expense policies is especially important when preparing for audits. These policies make it easy to keep accurate records of all business expenses. And when it’s audit time, having everything organized helps speed up the review process and saves time and effort.

Plus, detailed T&E policies ensure compliance with tax regulations and prevent fraudulent practices, both of which are key areas of focus in an audit.

Establishing Dynamic Policies Around Travel Expenses

When creating policies, it’s temping to simply adopt black-and-white compliance: You’re over the daily rate. ❌ You didn’t book the cheapest flight. ❌

But this kind of inflexibility is often at odds with commonsense (and employee morale): an employee is presenting at Dreamforce, and hotel rates in San Francisco tripled. The cheapest flight was a red eye with two layovers. A VIP client demanded an emergency meeting tomorrow. A new mom needs a hotel room with a fridge for her breast milk.

Instead, embrace dynamic policies and budgeting with software . Tools like TravelBank ingest real-time data to create reasonable budgets based on market rates, travel dates, your policies, and destination. With dynamic budgets and policies, you’re shaping travel policies and budget expectations around the real world of travel, instead of squeezing trips into the mold of the spend max you set. The result is often more accountability and more appropriate budget guidelines for a wider range of destinations.

Toggle on notifications and approval flows for Travel and Expense policies in the TravelBank platform

>> Related: SaaS Expense Management for Small Businesses <<

Common Challenges that Overwhelm Companies Without Policy Controls

Without travel and expense controls in place, companies will be challenged by:

Overspending : Without clear guidelines on acceptable expenses and spending limits, employees may overspend on business trips, resulting in higher costs for the company.
Lack of transparency : Without strict procedures for documenting expenses, it can be challenging for companies to track employee spending and identify any potential misuse of funds.
Inefficient processes: Without standardized procedures for claiming and reimbursing expenses, the process can become time-consuming and costly for both employees and the company.
Fraudulent claims : Without proper checks and balances, there is a higher risk of fraudulent expense claims that could result in financial loss for the company.
Compliance issues : Without detailed policies, employees may not realize they aren’t complying with your travel and expense policies. Further, companies may struggle to comply with tax regulations and may face state or federal penalties for non-compliance.

Enforcing a Travel and Expense Policy

Your well-crafted new (or newly updated) travel and expenses policy promises to control spend and improve compliance. It only works, though, if you can get all employees on board to follow the procedures correctly.

>> Related: Why Employees are Unhappy with Your Travel Policy <<

Carefully consider how you’ll document the policy, communicate policy changes, and answer personal questions . And, better yet, adopt T&E software that integrates your policy limits, so employees simply can’t book or submit non-compliant T&E.

Travel and Expense Policies flow for out of policy expenses on the TravelBank mobile application

Frequently Asked Questions

Why is it important for businesses to have well-defined travel and expense policies.

Having well-defined travel and expense policies promotes financial accuracy and accountability. Travel expense policies help curb extravagant spending or fraudulent expense claims, help employees understand what the company will reimburse, and clarifies what procedures they need to follow to receive reimbursement.

How do well-defined travel and expense policies benefit employees?

Well-defined travel and expense policies eliminate guesswork about what costs are appropriate, and what processes and timelines must be followed. Business travel expenses policies also help employees avoid out-of-pocket expenses that won’t be reimbursed later.

Can travel and expense policies help prevent fraud and misuse?

By defining the acceptable limits and clear procedures for claims, policies discourage fraud and misuse of company money. For instance, if the travel expense policy states that meals during travel are reimbursed up to a certain limit, it curtails the chance of employees claiming high-end dining expenses. And the requirement for itemized receipts can reveal discrepancies.

>> Record-Keeping Requirements for Expense Report Receipts <<

Do travel and expense policies apply to all employees?

Travel and expense policies usually apply to all employees in an organization. These policies act as a universal guide for managing travel expenses and ensure fair and consistent treatment across different levels of the company. So, whether you’re just starting out or a top-tier executive, you’re expected to follow the policy’s guidelines when traveling for work or incurring expenses. Of course, it’s important to note some positions might require more frequent travel or have higher expenditure limits. But the main goal of these policies remains the same: to maintain financial control and accountability for everyone.

If your business requires unique travel and expense policies for various departments, it may be time to invest in a travel and expense management platform like TravelBank that can help automate nuanced travel and expense policies and keep compliance high.

How often should travel and expense policies be reviewed and updated?

It’s a good idea for companies to review and update their travel and expense policies every year. However, if there are big changes in business operations, shifts in the economy, or updates in tax laws, more frequent reviews might be necessary. Regular updates make sure the policy stays relevant, fair, and aligned with the company’s financial goals and regulatory requirements. This process is important, but it’s also important to balance the company’s interests with employee adoption.

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Travel and Expense

6 expense reimbursement policy best practices and why you need them.

Strong expense reimbursement policies are critical to overall organizational success, especially when you have employees who travel for business purposes. However, if you're not following expense reimbursement policy best practices, you might inadvertently create higher risks for the company and employees when you do reimburse people.

Why Do You Need a Strong Expense Reimbursement Policy?

A strong policy that governs expense reimbursements protects employees as well as the company. It communicates specifics about what can and can't be reimbursed and how to seek reimbursement. When your policy is detailed and clearly worded, it can reduce the risk of noncompliant spend.

Other benefits of effective expense reimbursement policies include:

Helping to define the culture of your organization
Supporting trust so employees can travel for business with confidence
Increasing the efficiency of reimbursements, reducing the time employees may float their own expenses
Setting parameters for control of travel and other business expenses to help maintain the budget

Initial Steps for Designing an Employee Expense Reimbursement Policy

Before you sit down to write an employee expense reimbursement policy, take some time to gather necessary information and make sure you’re creating a policy that works well for your organization.

Start by considering specific business needs. What type of budget are you working with, and do you have software solutions to help manage your expense request and reimbursement processes? You may also want to consider how investing in efficient expense management can help you save time and money in the long term.

Next, consider the company's mission and values and how expense reimbursement policies can support them. For example, if sustainability is important to your business, you may want to include parameters in your policy (this travel sustainability guide can help) that support making a sustainable choice when possible for travel arrangements and other expenses.

Finally, consider the needs and desires of your employees. Flexibility in the workplace is a global trend and preference for many people, for example. While flexibility often relates specifically to scheduling and where and how people do work, it could also relate to how travel expenses are handled. If that's important to your employees, can you build some flexibility into your expense reimbursement policy?

As you work to answer these questions and set the stage for policy creation, collaborate with stakeholders and subject-matter experts in your organization. That might include getting feedback from employees who travel frequently and are familiar with your current expense reimbursement practices.

6 Expense Reimbursement Policy Best Practices

Once you set the foundation for your employee expense reimbursement policy, you can put these best practices into action when creating it.

1. Define Qualifying Reimbursements

One of the most important purposes of your expense reimbursement policy is to set parameters on allowed spending. Your policy should define what makes an expense business-related and also provide boundaries, such as maximum allowable amounts or types of allowed purchases.

For example, it's common to set a per diem for meals for each day an employee travels. Perhaps you allow up to $55 per day for meals. As long as the employee has the receipts to back up their meal expenses, you would automatically approve up to that amount.

But you can also set parameters for other types of spending. Perhaps employees are only allowed to book certain types of hotel rooms with properties you have negotiated business rates with or economy or business class flights.

2. Require Receipts

Ensure that your expense reimbursement policy is clear about the need for receipts. Describe the types of receipts that are acceptable. That might include:

Traditional register receipts
Email receipts
Printed purchase confirmation from online booking sites

Detail how receipts should be prepared for submission—digital processes may require the employee to take pictures of receipts or scan them in for adding to expense reporting software.

3. Reduce Paperwork in Your Expense Report and Reimbursement Process

Ensure your policy details the types of templates and workflows people should use to submit reimbursement requests, approve those requests, and, ultimately, fund them. When possible, remove actual hard-copy paper from the process. Digital forms support higher levels of streamlining and automation and they also reduce risks associated with paper, including the loss of paperwork and data breaches.

4. Define Expense Submission Deadlines

You might think that employees will rush to complete expense reports so they can be reimbursed. Surprisingly, however, the paperwork can get shuffled to the backburner when people are busy with other work. This can lead to employees submitting expense requests months after the expenditure occurred.

Slow expense reporting can put a burden on your accounting processes and even cause you to miss some tax opportunities. You can help speed up expense reporting processes by setting deadlines in your policy.

5. Create an Approval Workflow

Define the workflow for expense report approvals in your policy. If you're taking part in digital transformation and automating some of the expense process , define what types of expenses or dollar thresholds are eligible for auto approval.

Ensure the policy covers who must approve expenses and avoid creating policies that would allow someone (a manager, for example) to approve their own expense report.

6. Include Quality and Compliance Audits

Consider adding quality and compliance audit procedures to your expense reimbursement policy. Define who conducts the audit and how they do so. It's also important to set the parameters for auditing so that no one perceives audits as being directed to certain individuals.

You might write a policy that requires auditing of every third expense reported submitted by any given employee, for example. Or, you might set up the process so audits are triggered when expense reimbursement requests surpass a dollar threshold or include certain types of expenses.

Ready to get started on your employee expense reimbursement policy? Use the SAP Concur expense policy builder to ensure you cover all the bases.

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2024 guide to travel and expense management

Expense reimbursement policy best practices, what is an expense reimbursement policy.

Download your expense reimbursement policy template now

How to create an expense reimbursement policy, create guidelines for what counts as reimbursable expenses.

Is the expense travel-related? If yes, refer to your travel guidelines for employees . You should have guidelines for what does and doesn’t count as a travel-related expense in there. For example, meals eaten while traveling, would be reimbursable so long as they adhere to your company’s per diem rates .
Expenses that aren’t travel-related can be reimbursed if they meet the criteria for accountable plan rules. The IRS creates guidelines for reimbursing employees so that these expenses don’t count as taxable income. For expenses to meet accountable plan rules they must be work-related expenses and reported to employers in a timely manner.

Outline how employees should report expenses

How to document and implement your employee expense policy.

Making your company’s expense reimbursement policy clear and specific. Define any potentially confusing jargon so that employees won’t misunderstand the rules.
Testing it out on employees. When you know the ins and outs of accounting, it’s easy to assume that everyone else does too. Test your new policy on a focus group before rolling it out to the entire company to see what you need to explain or simplify. Does everyone understand what an accountable plan is? Are “work-related expenses” clearly defined? Can employees get access to the company credit card instead of paying out of pocket? Get feedback to determine whether or not the policy has clauses that can be misinterpreted. Make adjustments as needed.
Announcing the new policy and making it easily available through your company's communication tool, Slack, intranet, etc. Make the policy available in a cloud-based drive so that employees can review it on the go. This accessibility is especially important for your business travelers.
Including the expense reimbursement policy in your corporate travel policy to make it even more accessible.
Equipping employees with travel and expense software to enforce the policy. Give them an expense management tool to help collect receipts and file expense reports and travel booking software to track travel expenses.

Seamlessly integrate your expense tool with TravelPerk

Tips for enforcing an expense reimbursement policy.

Ask employees for receipts that include the vendor’s name, date and time of purchase, and list of items bought
Scrutinize receipts. Are they forged? Do the purchases make sense? Is the employee trying to get reimbursed for a tip although gratuity was included in the meal? Does the receipt have a bunch of business-related expenses and several personal purchases hidden amongst them? Play detective.
Create consequences for fraud. Firing employees who commit fraud will set an example and discourage others from following suit.
Create consequences for overspending. If employees spend over the per diem rate for their trip, reimburse them up to the allowed amount, but don’t let them get away with anything more. If a certain employee consistently overspends on business trips, consider giving them fewer travel opportunities.
Use tools that enforce the company’s spending policy. Adopt a travel management tool that shows which options are on-policy and which aren’t. Technology makes it easier than ever to identify and prevent expense reimbursement policy fraud.
Grant employees access to virtual corporate cards. These cards give administrators the ability to track spending in real time. If a finance team member sees a business traveler making suspicious purchases, they can send the employee a warning or email them a copy of the expense policy as a reminder.

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Employee Travel Expense Policy Template
An employee travel expense policy outlines the rules, procedures, and expectations for incurring, documenting, and reimbursing business expenses during work trips. This policy is integral to maintaining financial transparency, ensuring compliance with regulations, and promoting responsible spending within the organization. — By Andy Przystański, Mar 01, 2024
Travel Expense Policy
Overview. It is the policy of [Company Name] to reimburse staff for reasonable and necessary expenses incurred during approved work-related travel. Employees seeking reimbursement should incur the ...
Sample Corporate Travel Policy (Plus How To Write One)
A corporate travel policy, also called a travel and expense policy, is a set of official guidelines for work-related trips. Business leaders create this type of policy to explain to employees the proper procedures for arranging their flights, hotels and other travel-related plans. Specifically, these documents outline how employees might pay ...
Guide to corporate travel policies for employees (best practices)
Having a travel policy helps you: Control travel costs. Determine how reimbursement works. Compile a list of trusted and approved travel vendors. Manage an employee's travel experience and safety. Cut rogue bookings - and simplify approvals. Budget, report on travel expenses and activity and reconcile bookings.
Company travel policy
The company travel policy outlines provisions for business-related travel, detailing reimbursable expenses and guidelines. It covers transportation, accommodation, legal/medical expenses, and daily allowances. Employees are advised to exercise judgment and submit expenses timely for reimbursement. This company travel policy template is ready to ...
Building a travel and expense (T&E) policy: Step by step
A travel and expense policy (T&E) is a dynamic set of rules regulating how employees book travel. From setting budgets on flights and accommodations to standardizing the process for expense reports, your T&E should answer any (and all) questions about company travel, so you don't have to. But whatever the scope of your policy, its main ...
7 Steps to Writing an Effective Travel & Expense (T&E) Policy
The primary goals of a T&E policy are to: ‍. Certify that expenditures are reasonable and within the company's budget. Provide a framework for booking travel and submitting business expense reimbursements. Ensure consistent and fair treatment of all employees. Comply with relevant tax and labor laws. ‍.
Company Travel Policy
This company travel policy applies to all employees under contract at [company name], including paid interns, contractors, as well as seasonal, part-time, and full-time employees. ... On the Travel Expense Report, employees must include all company-paid expenses and personal expenses. The finance department is responsible for examining the ...
Corporate travel policy (+ free template)
A smart travel expense policy template should always include an introduction. Why? You want to make it clear to employees that your policy is not just a bureaucratic loophole. It helps keep them safe, improves fairness, and reduces manual work and confusion. We recommend including a bulleted point list of the top benefits of your travel policy ...
Need A Business Travel Expense Policy Template
A formal travel expense policy provides employees with knowledge of what they can and cannot submit as reimbursable, while providing management with critical real-time visibility into budgets. Having this protocol in writing will cut down on reimbursable expense report fraud, which is often unintentional, but can have big consequences. ...
Company Expense Policy Template
This employee expense policy should include: Definitions of work-related expenses and the distinction between company-paid and reimbursable expenses. Clear guidelines on what constitutes reimbursable expenses and the documentation required. Procedures for submitting reimbursement claims, including timelines and the approval process.
Business Travel Expense Policy Guide
Types of Expenses. Transportation: This is the cost incurred to get from the employee's home or office location to the destination and back. This might include flights, trains, rental cars, taxis, rideshares, mileage, or tolls. Accommodation: The cost of staying in a hotel or other type of lodging while traveling for business.
Travel and Expense Policy: What Is It, Example Template, and Best
To travel for work-related purposes, employees often need to submit a travel expense report detailing their costs. This can include travel costs like airfare, hotel, and other miscellaneous expenses like meals and incidentals. Many companies have a travel and expense policy outlining the rules and procedures for submitting these reports.
PDF Guide to Employee Travel Expense Reimbursement
Choosing the wrong travel expense reimbursement policy can increase overhead costs, damage ... Only employee travel expenses incurred before the employer becomes aware of the changed circumstance are deductible. 4 Meals and incidental expenses include: • Meals, room service, and fees and tips for food servers and luggage handlers; ...
Ultimate Guide to Travel Policy for Employees
A well-structured travel policy aims to achieve several key objectives: Cost Control: Managing travel expenses efficiently to minimize financial impact. Compliance: Ensuring that employees adhere to company regulations and industry standards. Employee Satisfaction: Creating a clear and fair travel framework contributes to employee satisfaction.
How to Set a Corporate Travel Policy: Key Elements, Best ...
Ensure that employees know who they can direct questions to regarding business travel bookings, expense reporting, and reimbursement. Set a specific time frame for submitting expenses for ...
Building a travel and expense (T&E) policy step by step
A travel and expense policy (T&E) is a dynamic set of rules regulating how employees book travel. From setting budgets on flights and accommodations to standardizing the process for expense reports, your T&E should answer any (and all) questions about company travel, so you don't have to. But whatever the scope of your policy, its main ...
What Is a Travel and Expense Policy? A Comprehensive Guide
A travel and expense policy is a set of rules that defines which expenses are acceptable. It will set out how employees book travel for business trips, as well as other similar costs. As a basic example, companies will require original receipts for any purchases. Employees may also be required to put business expenses on a company credit card.
How to Create a Travel & Expense Policy [With Template+ ...
Business travel has seen massive changes in the last five years, and expense reimbursements are now harder to manage than ever before. In this article, we share an expense policy template and guidelines to make sure employees submit the right information from the get-go.. A travel and expense policy is a collection of guidelines outlining how individuals should plan business-related travel ...
Mastering Your Company's Travel and Expense Policies
A travel and expense policy is a formal document that provides guidelines for business-related travel and expenses. It outlines the types of expenditures that the company will reimburse, such as transportation, meals, entertainment, remote expenses, lodging, and specifies the procedures for submitting expense reports.
6 Expense Reimbursement Policy Best Practices and Why You Need Them
Once you set the foundation for your employee expense reimbursement policy, you can put these best practices into action when creating it. 1. Define Qualifying Reimbursements. One of the most important purposes of your expense reimbursement policy is to set parameters on allowed spending.
How to write a travel expense policy for a small business
A travel expense policy is a set of company rules setting out how employees can book corporate travel as well as spend money on work-related expenses. It's needed because when it comes to travel and expense management, the priorities of the organization and those of the employee don't always align. While companies are focused on cost ...
Expense Reimbursement Policy Best Practices
Any business in which an employee makes a purchase on behalf of the company using personal funds (cash, personal credit card, etc.) instead of a corporate credit card should have an expense reimbursement policy. Out-of-pocket business expenses are very common for event planning or travel heavy roles. An employee might pay out-of-pocket for cab ...
Everything to Look For In a Travel Insurance Policy
Coverage can apply when a trip is interrupted for a covered reason, such as the traveler having an accident or becoming ill during vacation. Coverage is typically for more than 100% of prepaid travel expenses since it reimburses travelers for prepaid expenses and additional costs required to return home. Trip Delay Coverage

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Building a better travel and expense (T&E) policy: step by step

What happens without a T&E policy?

T&E is not one-size-fits-all

Defining the scope of your T&E policy

1) Transportation

2) Lodging

3) Meals and Per Diems

4) Corporate credit card expenses

Creating an effective T&E policy

Stay in the loop.

Company Travel Policy

Company Travel Policy - Free Template

Company Travel Policy Template:

Authorization and Reimbursements.

Travel Arrangement:

Travel Expenses.

Accommodation.

Other Expenses.

Personal Travel.

International Travel.

What should be included in a travel policy?

What is corporate travel policy?

How do you write a travel expense policy?

What is a travel and expense policy?

Related Articles:

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Travel and Expense Policy: What Is It, Example Template, and Best Practices

IN THIS ARTICLE

Considerations for a Policy that Works for Your Business

Why You Need a Travel and Expense Policy

Put Finance and HR to Work Together

Consider Multiple Factors Unique to Your Organization

Introduction

How to Book Travel

Approval Process

Leisure Extensions

Loyalty Program Usage

Traveling with Non-Employees

Accommodations

Rental and Personal Vehicles

Rail Travel

Taxis and Ride-Sharing Services

Events and Conferences

Meals, Travel, and Entertainment

Personal Telephone Use

Tracking Whereabouts

Travel Support

Emergencies

Implementing Your Policy

What’s your goal today?

2. Download our “Indirect Spend Guide”

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Types of Employee Travel Policies

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Benefits of Having a Corporate Travel Policy

Building a better travel and expense (T&E) policy: step by step 

Building a better travel & expense (T&E) policy: step by step 