2024 guide to travel and expense management


T&E Policy | Best practices to an effective travel and expense policy

The term ‘T and E’ is often used in business travel. In this case, the acronym can be for one of two options: travel and expense or travel and entertainment policy.
In this quick guide to policy best practices, we’ll unpick what those two T&E phrases actually mean. Plus, how you can manage a T and E process for your corporate travel plan.

What is T&E?

Travel and expense, or travel and entertainment, are any employee’s spending while traveling for work (a business trip) or entertaining a client.
T&E expenses include travel costs, fees for renting meeting spaces, accommodation, business meals, overseas phone charges, and more. They include any necessary spending, previously agreed upon in a travel and expense policy, to work while traveling successfully. HR and finance departments are usually responsible for a company’s travel policy and T&E processes.

What are the benefits of a T&E policy (and what happens without one)

Without an effective travel and expense policy, organizing corporate travel can be time consuming, frustrating and lead to frequent overspending. . A T&E policy, when it is accurate and automated, helps control costs  for business-related travel without micromanaging your team, Integrating policies into the latest travel solutions can reduce the repetitive questions your administrative team need to answer and ensure that your finance team has continuous access to the data and reporting they need.
Without the right T&E policy, there will be unnecessary work with the approval process, reimbursements, expense report collection, and more.
We asked Katharina Wodischeck from Adsquare when she thinks it's time for a company to automate their travel expenses. Here's what she said:
With only a handful of employees, managing travel expenses is still doable using Excel sheets and paper receipts. However, when companies are growing, the whole process of approving, reporting, and analyzing travel expenses gets more complex, and not only do finance and accounting teams take most of their valuable time for things that could be easily automated.Companies should define what the status quo is and what they want to achieve with automating their T&E. Once the T&E process is automated, it's simple to keep up with company growth or increased employee travel, and it will save a lot of administrative costs in the long run.
Katharina Wodischeck, Finance Director, Adsquare

What does a T&E policy look like?

To follow widely regarded best practices, your travel and expense policy should cover:
  • Allowable business purposes for travel
  • Booking tool and process (for air travel,, hotel rooms, public transportation, and car rental)
  • Basic spending guidelines for each category including details of eligibility for upgrades to
    business class or first-class airfaresBest practices for reimbursable expenses,including necessary supporting documentation (for food, ground transportation, and other small expenses)
  • Examples of non-reimbursable expenditure e.g. personal entertainment and policies for alcoholic beverages and non employees joining business trips for leisure purposes.
  • The disciplinary action that will be taken if business travelers fail to comply with your policy
A T&E policy needs to clarify three elements for business travelers. First, the company policy around what business reasons will be acceptable for approving a work trip.
Secondly, the process for booking travel arrangements, including what travel expenses the employee will need to get approved first. Finally, the policy should outline budgets allowed for different business travel related expenses and the consequences for deviating from these guidelines.
T and E policies also state  tax obligations, reimbursement processes and give an overview of expense management. Policies may vary depending on your business home base and destination of travel.
For example, international travel may rack up credit card surcharges for U.S. employees —tiny details like this need to be considered in a T and E policy.
Your travel and expense policy might consist of a document to teach travelers what , how to file an expense reimbursement, and their . But to optimize your corporate travel, integrating your policy into the latest tech tools can help you automate many of the processes.

How T&E management tools can help

You might be wondering if there are any business travel management tools that can support T&E expense approval and reporting. Fortunately, there are. When you automate your policy, you experience a few important benefits manual processes can’t provide:
  • Faster approval process and alerts for policy violations
  • Cost savings from better policy compliance
  • Accurate spending limits per team, department, or project
  • Transparent, real-time data on travel and entertainment expenses
  • Consolidated expense reporting from a single booking tool
  • Advanced T&E cost tracking allowing finance teams to forecast future business travel expenses
  • More accurate expense data. Analyze different expense categories and individual employee expenses in just a few clicks
  • Ability to identify travel spend trends among employees and seek out loyalty memberships for experience-enhancing perks
  • Faster reimbursement for out of pocket expense claims such as tolls, visa fees, travel insurance, business meals or mileage reimbursement when traveling in personal vehicles.
An automated travel policy is easier to understand and follow. For example, in TravelPerk, a hotel will state “Out of policy” if the nightly rate is too high.
Travelers can also choose to toggle the button that only shows in-policy options, so they don’t see options that aren’t compliant. This option is available to toggle on and off, so travelers with short time frames facing last minute premium rates can request to book out of policy from their approver.

Out of policy flights in the search

When you book your business travel through TravelPerk, your travel policy is seamlessly integrated into our platform. This means, when booking a trip, our platform automatically detects when something is out of policy, empowering your employess to make more informed choices with ease. Not to mention, more control and peace of mind for your finance team too!
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T&E tax implications

A lot of your employee’s business travel will be tax-deductible. As long as the IRS can recognize the activities as necessary to your industry niche. The harsh truth is that many businesses lose millions in unclaimed VAT on business travel programs.
Your business doesn’t need to be registered in the country your employee is traveling to in order to reclaim VAT. Use TravelPerk’s VAT-friendly inventory, proprietary VAT calculator, and VAT in-house experts to guide you through setting up an automated VAT solution. It could save your entire business travel budget up to 25% every year going forward.

The 5 best practices to streamline your travel and expense management

Follow these policy best practices to reduce violations, lower the effort required from approvers, and make auditing a breeze. What’s good for the traveler is good for the CFO too.

1. Make it accessible

For successful travel and expense management your employees need to know your wishes. Ensure you store your corporate travel policies and essential information in a place all employees have access to.
If you’re working with contractors or other service providers,you’ll need to keep in mind they may not have a company email and will need to accommodate them too.
At the same time, your process needs to be understandable and straightforward. You don’t want someone to constantly reference how to follow the process; you want them to learn it once and for the process to stick. The simpler, the better.

2. Be ready for mobile

Traveling employees are on the go—the hint’s in the name. Their T and E documentation needs to be as on the go as they are. This means not expecting them to pull out their laptop and track their expenses every time they make one. Maybe they won’t have a moment to do this across the span of an entire day.
Your T&E process needs to be mobile-friendly, so your employees can upload photos of original receipts, track costs and ensure any expenses are within policy  without needing to stop the pace of their day.

3. Create clear policies

The word policy has an ominous ring to it. The thing is, they don’t need to be overcomplicated. When you’re creating a T and E policy, remember who you’re making it for. Speak to your reader, use language they’ll understand, and keep it simple.

4. Automate your workflow (and let travelers book for themselves)

Automation makes your more, well, manageable. Plus, it doesn’t take as long to set up as you may think. With TravelPerk, you can set up an automated travel and expense management process with a couple of clicks.
You can select an already integrated expense partner like Expensify, Yokov and Paykawk. Or, integrate your own systems with TravelPerk’s expenses API—whatever works best for your business.
Take the time to automate your T&E workflow, and you’ll be grateful for it in the future. Doing this eradicates lengthy email chains, and ensures nothing is overlooked.
Plus, automating T&E will feed your business valuable spend management data, letting you know how you can optimize for financial benefit in the future.

5. Onboard your automation tool

The last step on your journey to creating a smooth T and E process is onboarding your automation tool and workflow.
Ensure the entire business has a good overview of how the tool functions and how they can use it. Do it well the first time, and you’ll never have to repeat this.

Say hello to simpler T and E workflows

Follow this simple guide to set up business-wide workflows and policies to create a smoother travel experience for everyone. Plus, you'll boost compliance, save money, and potentially recoup up to 25% of annual VAT costs.
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