Business Expense Reimbursements and Travel Policies: How to Simplify and Control Spending

If you manage business expenses, you’re probably dealing with more headaches than you should. You spend hours tracking down missing receipts, chasing approvals that stall for days, and trying to make sense of spreadsheets that don’t tell the full story. Every reimbursement feels like a one-off process, and enforcing travel or expense limits often means being the “bad guy.”

The truth is, traditional expense management is frustrating for everyone:  you, employees, and finance. It takes forever to process, it is never consistent, and mistakes are a given.

This guide helps you fix that. It shows you how to set up a clear, consistent expense process that people will actually follow — one that simplifies reimbursements, brings visibility to spend, and keeps policies fair and easy to enforce. You can also access our free Travel and Expense Policy Template to help you roll it out quickly and scale it as your company grows.

How companies handle expenses and reimbursements

Every business has expenses — but the difference between tracking expenses and managing them effectively can be the difference between smooth operations and constant frustration. Check out our guide to understand more about expense management.

For most companies, the expense reimbursement process begins when an employee uses personal funds for a business-related expense — such as a last-minute flight, a hotel stay near a job site, or a software license needed to get work done. The employee submits the claim with receipts, a manager approves it, and finance reimburses them through payroll or accounts payable.

In theory, it’s simple. In practice, it’s often anything but.

When expense management isn’t standardized, finance teams lose visibility into where money is going, policies get applied inconsistently, and employees wait weeks to be paid back. Delayed reimbursements erode trust, while missing or incomplete documentation creates audit and compliance risks.

A well-designed expense reimbursement process solves for all three:

• Cash flow: Spend data flows back into budgets in real time, so finance isn’t blindsided by end-of-month surprises.
• Compliance: Policies and approvals are enforced automatically, reducing the risk of out-of-policy or duplicate claims.
• Employee experience: People aren’t left covering business costs out of pocket or waiting months for repayment.

Typical reimbursable expenses include:

• Business travel: flights, lodging, car rentals, mileage, and incidentals
• Meals and client entertainment: within defined policy limits
• Work-related purchases: tools, safety gear, or approved software and subscriptions
• Professional development: training, certifications, or memberships tied to an employee’s role

Designing an expense reimbursement policy isn’t just about setting limits or collecting receipts — it’s about defining how reimbursements are handled across your organization. The structure of your plan determines everything from tax treatment to how easily you can enforce policy and audit spend.

That’s why one of the first decisions to make when building or updating your policy is whether to use an accountable or non-accountable plan — or a mix of both.

Structuring reimbursement policies that stay compliant

Not every organization reimburses employees the same way — and the difference isn’t just procedural, it’s financial. The structure of your reimbursement plan determines whether payments are treated as taxable income and how easily your finance team can enforce policy, maintain compliance, and audit spending.

When building or updating your travel and expense policy, decide early which reimbursement model applies to each type of spend.

Accountable plans

Accountable plans follow a “submit and reimburse” approach. Employees cover a business expense, submit a claim with receipts and details (date, purpose, and amount), and are reimbursed in full.

Under CRA and IRS rules, these reimbursements aren’t considered taxable income, provided the following conditions are met:

• The expense serves a valid business purpose.
• The employee documents and substantiates the expense with a receipt or log.
• Any excess reimbursement is returned within a reasonable timeframe.

Policy guidance:

• Require receipts or proof of payment for all reimbursable items.
• Define what constitutes “reasonable” timing for submitting and reimbursing expenses.
• Set clear approval and documentation standards within your expense software or forms.

Best used for: general business expenses, travel, and purchases that require tight control or audit readiness.

Non-accountable plans

Non-accountable plans provide employees with a set allowance or stipend — for example, $200 per day for meals and lodging while on site. Employees aren’t required to submit receipts, and if they spend less, they keep the remainder.

Because there’s no substantiation, these payments are treated as taxable income under most jurisdictions and must appear on the employee’s T4 (Canada) or W-2 (U.S.).

Policy guidance:

• Document the categories and conditions where stipends or per diems apply.
• Communicate that these allowances will be taxed as income.
• Review rates annually to ensure they remain reasonable and competitive for field or travel needs.

Best used for: predictable, repeatable costs such as per diems for fieldwork, camp allowances, or recurring stipends (e.g., phone or home-office).

Hybrid or conditional approaches

Many organizations combine both models — using accountable plans for most expenses and non-accountable ones for specific cases such as remote-site meals or field per diems.

The key is clear documentation. Each expense type should be defined in your travel and expense policy, with notes on:

• Which plan applies
• Whether receipts are required
• How payroll should treat the payment (taxable or not)

Tip: If your company operates in mining, construction, or field services, make sure per diems and site allowances are clearly classified. This avoids payroll surprises, maintains CRA or IRS compliance, and keeps reporting consistent across projects.

Once you’ve chosen the right structure, the next step is turning those rules into a policy people can actually follow.

That means defining:

• What’s reimbursable (and what’s not)
• Who approves expenses and how quickly
• What documentation is required
• How payments are issued

Clear definitions prevent confusion, speed up approvals, and protect your organization from compliance risks. The next section walks through how to build those rules into a travel and expense policy that’s practical, scalable, and easy to enforce

Why travel and expense policies are essential

A travel and expense (T&E) policy defines what can be spent, how expenses should be submitted, and how quickly reimbursements are processed.

Without one, you risk inconsistent approvals, unclear limits, and budget overruns. With one, you create a fair, auditable framework that protects both employees and the business.

T&E costs are often the second-largest controllable expense after payroll — and one of the hardest to manage because spending happens quickly, across departments, and often outside direct oversight.

A strong policy ensures:

• Employees understand what’s reimbursable
• Finance receives consistent, audit-ready data
• Managers can approve expenses faster
• Company funds are used responsibly

If your organization doesn’t have a clear expense policy — or if yours hasn’t been updated recently — start with our free Travel and Expense Policy Template to build a scalable, compliant foundation.

Key elements of an effective T&E policy

Beyond setting limits and budgets, effective travel and expense management depends on operational discipline and the right tools. The most successful organizations consistently:

• Automate approvals to eliminate manual bottlenecks and reduce errors.
• Communicate clear procedures so employees know exactly what’s allowed and how to submit claims.
• Centralize receipt storage with mobile or OCR tools, ensuring all documentation is captured automatically.

A well-structured expense policy should also include:

1. Budget and approval hierarchy

Define who approves what — for example, department leads for team travel, finance for larger spends, and executives for exceptions.
Why it matters: Clear ownership prevents bottlenecks and reduces unauthorized spending.

2. Eligible vs. non-eligible expenses

Spell out which costs are reimbursable (transportation, lodging, client meals) and which are not (personal travel upgrades, alcohol, family meals).
Why it matters: Transparency helps employees make better decisions and minimizes disputes during reimbursement.

3. Receipt and documentation requirements

Require receipts or digital proof for all reimbursable expenses. If you’re using Procurify, receipts can be captured instantly using mobile OCR scanning.
Why it matters: Proper documentation ensures audit readiness and compliance with CRA or IRS rules.

4. Submission timelines

Set clear expectations — for instance, expenses must be submitted within 30 days of the transaction to be eligible for reimbursement.
Why it matters: Timely submissions improve reporting accuracy and simplify month-end reconciliation.

5. Audit and compliance controls

Explain how your finance team reviews and reconciles expenses. Centralized tools can simplify compliance with audit-ready records and real-time tracking.
Why it matters: Ongoing oversight protects against fraud, duplicate payments, and policy drift as your organization grows.

Common expense management practices (and their pros & cons)

Every organization manages expenses differently — from spreadsheets to the best spend management software. Understanding where your process sits today helps identify inefficiencies and opportunities for improvement.

Moving toward automation doesn’t just save time — it standardizes compliance, improves visibility, and strengthens financial control.

2026 trends shaping travel & expense management

Finance teams are moving away from manual, friction-heavy expense management toward real-time, automated oversight. The trends below are defining how leading organizations manage spend:

What best-in-class expense management software looks like today

If you were designing a modern, low-friction expense process from the ground up, aim for expense management solutions and policies that combine automation with accountability — where approvals, reimbursements, and reporting happen in real time.

Clear, enforced policy rules

Define reimbursable vs. non-reimbursable expenses, limits, and categories.
Embed those rules directly into your platform so out-of-policy items are flagged or blocked automatically before they reach finance.

Mobile Scanning with Digital Receipts

Employees snap photos or upload receipts from any device.
Smart OCR technology extracts details instantly — date, vendor, amount — and links them to the right transaction. No manual entry required.

Automated routing and approvals

Pre-set purchase approval workflows chains (manager → finance → executive) based on spend category or value.
Low-risk items auto-approve; higher-value or exceptional claims are routed for review with built-in notifications and audit trails.

Fast reimbursement and settlement

Approved claims move seamlessly through the payment workflow — ACH, direct deposit, or virtual card settlement — with real-time status updates.
Employees receive confirmation when funds are issued, improving transparency and trust.

Built-in audit and compliance controls

Duplicate detection, missing receipt alerts, and anomaly flags keep processes compliant by design.
Automated logging ensures every decision — from submission to payment — is audit-ready.

Analytics and reporting

Dynamic dashboards reveal up to date spend insights, category breakdowns, and policy compliance.
Integrations with accounting, ERP, and payroll systems create a unified view of company-wide spending.

Continuous improvement loops

Monitor bottlenecks, track turnaround times, and collect user feedback.
Leverage insights to refine approval paths, adjust limits, or identify training gaps as your organization scales.

In short: The benefits of best-in-class expense software management form a closed loop — policies guide behavior, automation enforces compliance, and finance gains continuous visibility to make faster, smarter decisions.

How Procurify simplifies expense reimbursements and policy compliance

Traditional expense processes create more work than they solve. Lost receipts, delayed approvals, and manual reconciliation make it hard for finance teams to stay accurate — and even harder to control spend before it happens.

Procurify’s Expense & Card solution eliminates that friction by bringing reimbursements, corporate cards, and policy enforcement together in one platform. The result? Real-time visibility, built-in budget control, and a simpler experience for everyone involved.

Simplify expense reporting from capture to approval

Employees can snap photos of receipts, auto-categorize expenses, and submit requests in seconds — all from their phone or desktop.
Approvers review and approve instantly with full context, eliminating delays and endless email chains.

I always use the mobile app for approvals. When I get an approval request to purchase when I’m out of the office, it only takes a few touches. It speeds everything up – without it, I would have to wait hours until I’m back in the office. Ed Fineran, President, Atlantech Online

Why it matters: Expense management becomes effortless and error-free, freeing finance teams to focus on higher-value work.

Empower smarter spending with company cards

Instead of asking employees to pay out of pocket, company spending cards give teams controlled access to funds upfront — with automatic tracking and built-in policy limits.

Finance teams can:

• Issue physical or virtual cards instantly
• Set custom limits and real-time alerts
• Approve instant fund requests and top-ups
• Generate audit-ready statements automatically

Why it matters: Employees get the flexibility to spend when they need to — and finance keeps complete oversight.

Get real-time visibility and control over company spend

Every transaction — from reimbursements to card charges — flows into a single dashboard.
Finance can track spend by department, project, or category and compare it against live budgets.

• Monitor spending patterns and policy compliance
• Identify risks or bottlenecks early
• Maintain a complete, audit-ready history of all expenses

Why it matters: You’re not chasing receipts or waiting for month-end reports — you have continuous, accurate insight into how company money is being spent. For example consider this spend horror, imagine being the CFO is this company and finding out much too late that someone bought a $60,000 couch. Ouch.

Every company has to manage expenses but not everyone has the solutions to do it efficiently. By combining automation, clear policy design, and proactive oversight, you can build a process that supports growth instead of slowing it down.

If you’re ready to simplify reimbursements, strengthen compliance, and give your team the visibility they need to manage spend with confidence, explore how modern expense management software can help. Book a demo today!