What is an expense policy?
An expense policy is the company's written rules on business spending by employees: what may be bought, the limits for travel, meals, accommodation and other costs, who approves what, which payment method to use, what receipts are required and how quickly expense claims must be submitted. It is the basis for checking every item.
Also calledtravel and expense policyT&E policyexpenses policy
Compare the softwareBest spend management software →All 9 spend and expense management vendors →
- Sets
- Limits, evidence, approvals
- Enforced by
- Rules in expense software
- Category
- Expense and spend management
What an expense policy covers
Most policies set limits by category and location, such as a nightly hotel cap that differs between cities, a daily meal allowance and the class of travel by journey length. They say what is not reimbursed, such as fines or personal entertainment, how mileage is paid, which suppliers or booking tools to use, and when advance approval is needed. They set the evidence required: an itemised receipt, a valid tax invoice where sales tax or VAT is reclaimed, attendee names for entertainment, and a business purpose. Tax rules matter: if reimbursements follow the rules, they are not taxed as pay, as under an accountable plan in the US or the paid and reimbursed expenses exemption in the UK. Expense software turns the written policy into rules checked as each item is submitted. Expensify, Emburse, Pleo, Payhawk and Ramp all apply policy rules automatically.
Common questions
What should an expense policy include?+
Who it applies to, what is and is not reimbursable, limits by category and location, approval rules, required receipts and information, payment methods, submission deadlines and the consequences of breaking it.
How are expense policy breaches handled?+
Software flags them as items are submitted. The approver decides whether to accept with a reason, reject, or partly reimburse. Repeated or deliberate breaches go to the employee's manager or HR.
Should an expense policy set per diems?+
Many companies use a daily allowance for meals and incidentals when staff travel, because it is simpler than checking every receipt. Tax rules in each country set how much can be paid tax-free.
Software that enforces expense policies
ExpensifyReceipt scanning and automated expense reports with cards.Profile →
EmburseExpense, corporate card and travel spend management.Profile →
PleoCompany cards with automatic receipt capture and budgets.Profile →
PayhawkCards, expenses and multi-currency accounts for global teams.Profile →
RampCorporate cards, expenses and bill pay with savings insights.Profile →
MossCorporate cards, invoices and budget controls for Europe.Profile →Part of Accountio’s accounting technology coverage · Glossary
