Guide to travel and expense management

Business travel is a major cost center for many organizations. The global business travel industry is worth approximately $1.28 trillion, and U.S. organizations account for more than one-third of that spending. Without a structured process, even modest travel programs can create a high volume of receipts, reimbursement requests, approval delays, and disconnected financial data.

Modern travel and expense management brings travel booking, expense reporting, reimbursement, payment, and policy controls into a more efficient workflow—reducing manual work for employees while improving financial oversight.

What is T&E? Understanding travel and expense Management

T&E stands for travel and expense. It refers to the business-related costs employees incur while traveling or making purchases on behalf of their employer.

Typical T&E expenses include:

• Flights, rail travel, and other transportation

• Hotel stays and other accommodation

• Car rentals, fuel, parking, and tolls

• Ground transportation, including taxis and rideshares

• Business meals and client entertainment

• Meeting-room rentals and event costs

• Mobile phone, roaming, and overseas connectivity charges

• Per diem expenses and other approved incidental costs

Travel and expense management covers the full lifecycle of these purchases: setting policy, approving trips and expenses, booking travel, capturing receipts, submitting reports, reconciling transactions, reimbursing employees, and analyzing spend.

HR, travel managers, finance, and accounting teams commonly share responsibility for the process. The complexity grows quickly as a business expands from a handful of travelers to hundreds or thousands of employees traveling across different locations, departments, and currencies.

Perk research found that 83% of employees struggle with travel expenses, often because of delayed reimbursements, confusing policies, or having to pay for business costs themselves. These employee challenges can create additional work for finance teams and weaken visibility into overall company spending.

Why travel and expense management matters

A well-managed T&E program benefits employees, finance teams, and the wider business.

For employees, it provides clear guidance about what they can book or buy, reduces out-of-pocket costs, and helps ensure fast reimbursement when personal funds are used.

For finance teams, it improves the quality and timeliness of expense data, makes reconciliation easier, supports compliance, and provides a more reliable view of travel spend.

For the business, it helps control costs without unnecessarily restricting travelers. It also supports tax preparation, budgeting, supplier negotiations, and fraud prevention.

Tax preparation and audit support

Business travel expenses may be deductible when they have a legitimate business purpose and are properly documented under applicable tax rules. Organizations generally need records such as receipts, invoices, dates, amounts, vendors, and a description of the business purpose.

For example, travel may be connected to sales meetings, recruiting, professional development, procurement, conferences, client support, or internal meetings. The exact tax treatment varies by country, expense type, and company circumstances, so organizations should align their policy with relevant local requirements.

Better financial intelligence

T&E reporting is not only an accounting requirement. Travel data helps companies understand where money is being spent and why.

With accurate, timely reporting, finance teams can identify:

• Spend by employee, team, department, client, project, or cost center

• Frequently booked routes, hotels, airlines, and travel suppliers

• Policy violations and out-of-policy booking patterns

• Expense categories that are rising unexpectedly

• Opportunities to negotiate better supplier rates

• Unused bookings, cancellations, and potential savings

• Potentially recoverable VAT

This visibility helps companies create more realistic budgets and make better decisions during the year—not only after monthly or quarterly close.

Lower risk of expense fraud

Travel reimbursement can be vulnerable to fraud, especially when processes rely on spreadsheets, paper receipts, and manual approval.

Fraud can include fabricated expenses, duplicate claims, inflated purchases, personal items presented as business costs, or claims for trips that did not take place. Requiring supporting documentation, applying consistent approval workflows, and reviewing unusual spending patterns can help reduce risk.

Pain points of ineffective T&E processes

Manual or fragmented travel and expense processes create friction for both travelers and finance teams. High processing costs, slow workflows, and incomplete data can make even a small travel program difficult to manage.

Nearly one in five employees (19%) say they do not know what is reimbursable, while one in four (25%) worry about going over budget. A clear policy and the right travel expense management solution can reduce this uncertainty.

Unauthorized or out-of-policy bookings

When employees book travel on consumer websites or outside approved workflows, finance teams may not see the purchase until after it has been made. This makes it harder to enforce preferred suppliers, spending limits, approval requirements, and traveler safety procedures.

More than a third of employees (36%) still book business travel through consumer platforms, according to Perk research. These bookings can spread travel data across multiple vendors and make consolidated reporting difficult.

Higher travel costs

Every organization wants to reduce travel costs, but smaller companies may struggle to secure direct corporate rates from hotels and airlines. Booking travel through a managed platform can make it easier to compare options, apply policies at the point of booking, and access corporate travel discounts.

Endless administrative work

Corporate travel produces a steady flow of administrative tasks: collecting receipts, chasing expense reports, reviewing submissions, approving reimbursements, matching transactions, and reconciling card purchases.

Without a centralized travel platform or corporate payment method, employees often pay for large purchases upfront and submit reimbursement requests later. Finance teams must then manually match expense reports against invoices and card transactions.

Lost receipts and incomplete documentation

Paper receipts are easy to lose, damage, or forget to submit. In fact, one in four business travelers say they have lost receipts while traveling.

Missing receipts can delay reimbursement, complicate accounting, and create compliance issues. Digital receipt capture and automated expense tools reduce the reliance on travelers storing paper documentation until they return from a trip.

Inaccurate or late expense reports

Manual reports often contain missing fields, incorrect amounts, duplicate entries, or unclear business purposes. Correcting reports adds work for employees and finance teams.

According to GBTA research, an expense report can take approximately 20 minutes to complete and cost about $58 to process. When a report needs correction, it can require another 18 minutes and $52. At scale, these costs add up quickly.

For example, processing 20 correct expense reports each month would cost approximately $13,920 annually at that rate. If those reports also require revision, the additional cost could bring the annual total to roughly $26,400.

Slow reimbursements

When employees use personal money for work expenses, delayed reimbursement can put unnecessary pressure on their finances. This is particularly difficult when employees have paid for costly items such as flights, accommodation, rental cars, or event expenses.

Slow reimbursements can also lower employee satisfaction and discourage compliance with required booking or reporting processes.

Limited real-time cost tracking

Manual processes delay access to travel data. By the time a report is submitted, approved, and entered into the accounting system, the company may have missed the opportunity to manage spend in the moment.

Without real-time visibility, finance teams may struggle to identify overspending, policy breaches, duplicate claims, or potential expense fraud.

What is a travel and expense report?

A travel and expense report is a digital or physical record of business-related purchases. It gives the employer the information needed to review, approve, account for, and reimburse an expense.

Modern expense reports are usually digital and include receipt images or electronic invoices. They may be submitted individually, grouped into a trip report, or generated automatically through integrated travel, card, and expense systems.

What should a T&E report include?

A complete travel and expense report should include:

• Date of purchase

• Vendor or merchant name

• Expense amount

• Currency used

• Expense category

• Employee name

• Client, project, department, account, or cost center where relevant

• Business purpose or notes explaining the expense

• Subtotal, tax, VAT, and total amount

• Receipt, invoice, or other supporting documentation

• Approval status and approver details where required

Organizations should define documentation requirements by expense type and local tax rules. For example, a small taxi fare may have different receipt requirements than a hotel stay, client dinner, or international flight.

Why automate travel and expense reporting?

Automated reporting reduces repetitive work, improves data quality, and helps finance teams manage travel spending more efficiently.

Reduce paperwork and manual data entry

Paper-based workflows create unnecessary work for everyone involved. Travelers must save receipts and fill out forms, while finance teams must review every item, request corrections, and enter data into accounting systems.

With automated expense reporting, employees can use a mobile device to scan receipts and upload them immediately. Receipt data can be extracted automatically, reducing manual typing and improving record quality.

Improve policy compliance

Automated systems can flag duplicate claims, missing receipts, and expenses that fall outside policy. They can also route reports to the right approver based on the amount, department, project, or expense category.

When employees receive guidance during booking and reporting, they are more likely to make compliant choices and less likely to submit expenses that need correction.

Provide real-time travel spend visibility

A centralized system helps finance teams monitor:

• Policy compliance rates

• Top expense categories

• Spending patterns by employee or team

• Potential duplicate or fraudulent claims

• Preferred hotel and airline usage

• Travel costs by project, department, or client

• Outstanding reports and reimbursement requests

This information makes it easier to control costs, identify areas for improvement, and plan future travel budgets.

What is an expense reimbursement policy?

An expense reimbursement policy is a set of guidelines that explains which out-of-pocket purchases employees can make on behalf of the company and how and when they will be repaid.

Any organization where employees occasionally use personal cash, debit cards, or credit cards for business costs should have a clear reimbursement policy. This applies to travel-heavy roles as well as other activities, such as event planning, client meetings, or purchasing urgent supplies.

For example, an employee might pay for a taxi from an airport to a conference venue, purchase last-minute supplies for a company event, or cover a meal during an approved business trip. The policy should make it clear whether the expense is eligible, what evidence is required, how it should be submitted, and when the employee can expect payment.

Organizations can support consistency by using an expense reimbursement policy template.

What should a T&E policy cover?

A travel and expense policy sets expectations before employees spend company money. It should be specific enough to prevent confusion but practical enough for employees to follow while traveling.

A strong policy should cover the following areas.

Approved business purposes for travel

Define which travel reasons are eligible for company-funded trips. This may include sales meetings, conferences, client support, recruitment, training, internal offsites, or project work.

Booking process and approved tools

State how employees should book flights, accommodation, rail, car rentals, and other travel services. Encourage employees to use the approved travel booking tool so the company can apply policy controls, track bookings, and consolidate invoicing.

Spending limits and travel classes

Set guidelines for airfare, hotel budgets, car rental categories, meals, ground transportation, and incidental expenses. Clarify when employees may book premium economy, business class, or first class, and when additional approval is required.

For companies traveling across multiple cities, static hotel caps may not reflect local market prices. Dynamic travel budgets can help by allowing employees to book within a defined range of the lowest available option.

Reimbursable and non-reimbursable expenses

Explain what is covered and what is not. Reimbursable categories may include approved transport, accommodation, meals within policy limits, and business-related mobile charges.

Non-reimbursable expenses may include personal entertainment, leisure activities, personal purchases, unapproved upgrades, or costs for non-employees joining a business trip. The policy should also explain the company’s approach to alcohol, gratuities, and blended business-leisure travel.

Receipt and documentation requirements

Employees should save receipts and record the business purpose of each purchase. Receipts should ideally show the vendor, date and time, amount, and purchased items or services.

For expenses that must meet accountable-plan requirements in the United States, timely substantiation and a legitimate business purpose are important. Companies should seek appropriate tax guidance for their jurisdiction and make sure reimbursements are handled correctly.

Expense submission deadlines

Set clear deadlines for submitting expense reports. Timely reporting helps finance teams close the books, maintain accurate records, and reimburse employees without unnecessary delay.

Reimbursement method and timing

Explain how employees will receive reimbursement, such as direct deposit, payroll-linked payment, or a separate payment cycle. State the typical reimbursement timeline and what may cause delays, such as missing receipts or incomplete approvals.

Where reimbursement qualifies as a legitimate business expense under relevant rules, it should be treated appropriately and kept separate from ordinary wages where required.

Consequences for non-compliance

The policy should explain what happens when employees repeatedly book outside the approved process, exceed limits without authorization, submit late reports, or make fraudulent claims. Consequences should be consistent, proportionate, and aligned with company procedures.

How to create and implement an expense reimbursement policy

Creating the policy is only the first step. Employees need to understand it, access it easily, and use systems that make compliance straightforward.

Define reimbursable expenses

Start by identifying which purchases the company will reimburse and under what conditions.

For travel-related expenses, align reimbursement rules with your broader corporate travel policy. For example, meals may be reimbursable if they remain within the company’s per diem meal expense guidelines.

For non-travel expenses, define the business purpose, documentation standards, approval requirements, and any spending limits.

Create a simple reporting process

Employees should know exactly how to submit an expense:

1. Save or scan the receipt when the purchase is made.

2. Record the business purpose and relevant project or cost center.

3. Submit the expense within the stated deadline.

4. Respond promptly to any request for clarification.

5. Track the approval and reimbursement status through the company’s system.

A digital expense tracking tool can make this process much easier than collecting receipts and completing spreadsheets after a trip.

Test the policy before a full rollout

Finance terminology can be unclear to employees who do not work with accounting processes every day. Before launching a new policy company-wide, test it with a small employee group.

Ask whether employees understand what counts as a work-related expense, how to submit a claim, what documentation is required, and when they will be reimbursed. Use this feedback to remove ambiguity before implementation.

Make the policy easy to find

Publish the policy in accessible places, such as the company intranet, shared cloud drive, HR portal, or internal communication platform. Employees should be able to access it while traveling, not only from a desktop in the office.

Including reimbursement guidance within the travel policy can also make it easier for travelers to find all relevant information in one place.

Introduce policy changes at the right time

New policies are often easiest to implement at the start of a fiscal year, calendar year, budgeting cycle, or after a review of travel and expense spending. These moments give teams a natural opportunity to reset expectations and adopt new workflows.

How to enforce an expense reimbursement policy

A reimbursement policy only works if employees understand that it is consistently applied.

Expense fraud generally occurs when an employee claims costs that did not occur or inflates a legitimate expense. For instance, someone might claim a taxi ride they did not take, book a more expensive rental car than policy allows, or submit personal purchases alongside legitimate business items.

Small claims can become significant at scale. A personal $6 taxi expense may seem minor on its own, but repeated across many travelers and trips, minor policy breaches can become thousands of dollars in unnecessary spending.

To help enforce your policy:

• Require itemized receipts where appropriate.

• Review receipts for vendor, date, amount, and purchased items.

• Check whether the expense fits the employee’s trip, role, and business purpose.

• Use approval workflows for high-value, unusual, or out-of-policy purchases.

• Reimburse up to approved limits rather than automatically covering overspend.

• Apply clear consequences for fraudulent claims or repeated policy violations.

• Provide frequent travelers with corporate or virtual cards where appropriate.

• Use technology to flag duplicate claims, unusual transactions, and out-of-policy spending.

Virtual corporate cards can provide finance teams with more immediate visibility into spending. If a suspicious transaction appears, administrators can investigate quickly or remind the employee of the relevant policy requirements.

Best practices for tracking travel expenses

The most effective T&E programs combine a clear policy with workflows that reduce the amount of work required to follow it.

Use automated expense software

Choose travel expense software that supports receipt scanning, automated data capture, policy controls, approval workflows, and reporting.

Avoid relying on paper forms and spreadsheets wherever possible. Manual processes increase the risk of late submissions, data-entry errors, and incomplete records.

Book travel in one place

Encourage employees to book through approved business travel management software. Centralized booking gives the company more control over spend and can consolidate travel costs into a monthly invoice.

When travel is booked in a managed platform, employees may not need to submit separate expense reports for major bookings such as flights and hotels.

Integrate travel, expense, and payment systems

A standalone expense platform shows what has already been spent. A connected travel and expense workflow can help manage spending before it happens by applying policy controls during search and booking.

Integrating travel management, expense reporting, accounting, and card transactions also reduces the need for manual reconciliation.

Use corporate cards strategically

Corporate cards can reduce the need for employees to pay out of pocket. When card transactions are automatically matched to receipts and expense reports, finance teams spend less time reconciling purchases.

They are particularly useful for frequent travelers and employees who regularly incur approved business expenses.

Embed policy into the booking experience

A policy document is useful, but employees may not remember every rule when making a booking. Digital policy controls can show compliant choices during the search process and flag options that need approval.

This helps employees make better decisions at the point where spend occurs.

How T&E management software can help

A modern travel and expense management platform can simplify the entire process from booking through reimbursement and reporting.

Key capabilities include:

• Real-time spend visibility: Consolidated booking and automated expense data give finance teams a clearer view of travel spending.

• Traveler autonomy within policy: Employees can choose appropriate trip options while still following company rules.

• Reduced out-of-pocket costs: Company-paid travel bookings and corporate cards reduce the need for employees to use personal funds.

• Receipt capture and automated reports: Mobile receipt scanning reduces manual entry and helps prevent lost documentation.

• Consolidated invoicing: Centralized booking can reduce multiple vendor invoices to a simpler monthly billing process.

• Automated reconciliation: Receipt data, expense submissions, and card transactions can be matched automatically.

• Faster approvals: Rules can automatically approve low-risk expenses, such as qualifying taxi or meal costs below a set threshold.

• Faster reimbursements: Automated workflows help employees receive reimbursement more quickly when they do pay out of pocket.

• Better reporting: Finance teams can analyze travel costs by employee, team, department, project, or supplier.

• VAT and cancellation tracking: Companies can track eligible VAT recovery and assess whether flexible or refundable travel options may reduce cancellation costs. Use the VAT refund calculator to estimate potential savings for an upcoming trip.