Managing travel and entertainment (T&E) expenses can feel overwhelming for many businesses. But it doesn’t have to be. With the right travel and entertainment policy, you can simplify expense tracking, save money, and keep employees happy.
A T&E policy is a set of rules that guide employees on what they can and can’t claim as business expenses. It covers everything from flights and hotel stays to meals and entertainment. It also helps companies control costs and avoid confusion.
In this article, we’ll explore everything you need to know about T&E policies. You’ll learn how to create clear guidelines, manage travel expenses, and follow best practices. Plus, we’ll show how Summit can make compliance simple and stress-free.
A travel and entertainment (T&E) policy is a set of rules that helps businesses manage expenses related to employee travel and work-related entertainment. It clearly defines which costs can be reimbursed—like flights, hotels, meals, and client entertainment—and sets limits on spending. It also explains the approval process employees must follow, ensuring everyone understands the steps required before and after making a claim.
Why it matters:
Without a clear T&E policy, companies risk mismanagement and inefficiencies. By implementing a well-structured policy, businesses can avoid these pitfalls and focus on smarter expense management.
An effective travel and entertainment (T&E) policy goes beyond listing allowable expenses. It creates a framework that ensures employees can travel and entertain clients while staying within budget. By setting clear guidelines, businesses can reduce disputes, avoid overspending, and make managing expenses easier for everyone.
A per diem is a daily allowance that sets spending limits for meals, lodging, and other incidental costs. It provides employees with flexibility while maintaining cost control. For example, a per diem might include $100 for meals and $150 for lodging, helping employees know exactly what they can spend.
Digital tools make tracking and reporting expenses more efficient. Employees can upload receipts, categorise expenses, and submit claims in real-time. For finance teams, these tools provide instant visibility into travel spending, making approvals and audits faster and more accurate.
Pre-approving travel expenses ensures that all spending aligns with company budgets and policies. Employees submit travel plans for manager approval before booking flights, accommodations, or other services. This process prevents misunderstandings and ensures transparency in spending.
Clear guidelines like these help organisations maintain control over travel expense management, support compliance, and create a fair and consistent process for all employees. By integrating these elements into a T&E policy, businesses can operate more efficiently and avoid unnecessary financial stress.
Crafting an effective corporate travel policy requires collaboration between finance, HR, and department heads. Here’s a step-by-step approach:
Creating a travel and entertainment (T&E) policy is just the beginning. To ensure your policy remains effective and aligned with your company’s goals, it’s important to regularly refine and improve it. Below are some tried-and-tested best practices to help you get the most out of your T&E policies.
Business travel costs and priorities can change quickly. Regularly review your T&E policy to ensure it reflects current travel costs, regulatory updates, and company goals. For instance, you might need to adjust per diem allowances to align with inflation or new travel destinations.
Stay competitive by comparing your T&E policy with industry standards. Benchmarking helps you understand how similar companies structure their policies, set allowances, and manage approvals. This ensures your policy is fair, realistic, and attractive to employees while maintaining cost efficiency.
Regularly analysing travel and entertainment expenses can uncover valuable insights. Look for trends in employee spending, identify areas of overspending, and pinpoint cost-saving opportunities. For example, you might find that switching to a preferred airline or hotel chain could result in significant savings.
Creating or updating a T&E policy doesn’t have to be a daunting task. An expense policy template can provide a structured framework for defining guidelines, setting allowances, and outlining workflows. Templates simplify the process and ensure consistency when policies need revisions.
Managing corporate travel policies can be overwhelming, but it doesn’t have to be. Summit Global simplifies business expenses with cutting-edge tools that ensure compliance and efficiency. With our solutions, you can:
Stop worrying about compliance—embrace efficiency and peace of mind with Summit. Talk to us today and see how we can transform your employee expense management processes.