Outlining Clear Payment and Expense Reimbursement Procedures in Your Travel Policy

Your business travel policy should include a clause for employee reimbursement. The nature of the clause is entirely up to you and what works for your business, but basically, there are two options. 

1. Employees front the expenses. You reimburse them later, usually after receiving an expense report or based on data from expense tracking tools. 
2. Your business pays transport and accommodation costs up front and gives employees an allowance for other expenses, primarily food and drink, and ground transportation (car hire or taxis).

We’re going to focus on option 1 and look at the importance of clear definitions and consistent application of the rules.

But first

Why is a Reimbursement Policy So Important?

A clear expense reimbursement policy helps you manage multiple payments easily. There’s no confusion, squabbling, or resentment. Provided you implement it fairly. CFOs must go through the same process as non-managerial staff. 

Consistent policy application and clear reimbursement processes reduce the risk that employees will load expense claims. This is important because businesses (especially small businesses) lose about 5% of revenue every year due to fraudulent claims. It works out to about a total of £2.3 billion.

This emphasises that small businesses need comprehensive standardised policies just as much as large organisations. 

Moving on to the steps.

Step 1: Defining the Boundaries of Reimbursable Expenses

It starts with clearly defined reimbursable expenses; what exactly is covered. This is like a list of reimbursable business-related expenses. If it’s not on the list, it’s not reimbursed. 

Travel expenses typically include:

• Transport for business travel, including air, train, bus, and self-drive options. 
• Accommodation on business trips, often for approved options only.
• Meals during business trips or single-day events. 
• Professional development and training, including courses, workshops, and conferences

Sometimes what’s excluded is just as important. Be clear about whether the policy includes personal entertainment or luxury upgrades.

You could, for example, reimburse approved accommodation, but any upgrades are to the employee’s cost. 

In fact, think about whether you’ll allow luxury upgrades at all, because it can be perceived as unfair and lead to resentment.

Step 2: Clear Submission and Documentation Procedures

It’s very important to standardise submission processes, so there is absolutely no confusion about what data is needed or what steps to follow. 

Be clear about:

• The documentation required, like physical receipts, digital invoices or statements, and official claims forms. 
• How claims must be submitted, for example, via email with attachments or directly via expense tracking and management tools. 
• The time limit. Claims must be submitted within 30 days of incurring the expense. Be firm once you’ve set the limit. Once you approve a claim after 31 days, what’s to stop claim submissions after 32 or 33 days?

Remember, travellers aren’t necessarily accountants, so don’t expect them to go into accounting systems and enter expenses correctly. Once all the required information has been submitted, it becomes the finance department’s responsibility.

Step 3: Streamlining Approval and Payment

This is your chain of command. Who is responsible for the next steps once claims have been submitted?

For instance, does the responsibility pass to the direct supervisor, who passes it on to the finance department? Or does the approval process have more players, including department heads and, in the case of SMEs, the CFO?

It’s usually a good idea to keep the chain as short as possible to reduce errors. A structured approval process speeds up reimbursement and ensures accuracy. It must include the methods and timeframe.

For example:

• Claims must be submitted seven working days before the payment date. 
• Claims are paid in bulk on the 25th of each month.
• Payment is via direct bank transfer.

The details of your reimbursement policy must be easily accessible to ensure it meets transparency requirements, manages expectations, and engenders trust among your employees. 

Compliance and Automation: Modernising Control

Control over spending has always been a priority for businesses, but according to the 2025 Amex Trendex: Business Travel Edition, 90% of companies want to increase control over travel spending. Moreover, 60% expect greater focus on optimising travel budgets to increase ROI. 

Tightening up reimbursement policies is key to achieving this objective. Provided there is compliance regarding:

• Communication: Communication is the key to everything. Your employees can’t comply with the policy if they don’t know it exists.  
• Consistency: Everyone, including the C-Suite, follows the same rules.
• Automation: Use advanced expense tracking tools to automate processes and identify anomalies.
• Auditing: Schedule regular audits to stay on top of travel expense-related information. This also ensures your books are audit-ready come tax season. 

Finally, your policy must include consequences for non-compliance. For example, late submissions are declined (pending appeal). Employees chancing their arm will face disciplinary action. 

Remember to keep the policy clear. This increases your control over your travel budget and keeps employees happy. Two factors that are essential to your business’s success. 

Sources Used:

1. Expense Reimbursement Policy: 5 Best Practices for Employers – click here
2. How to write a travel & expense policy in 7 steps – click here
3. What You Need to Know About the Reimbursement of Expenses – click here
4. Reimbursement of business travel expenses: how do I go about it? – click here
5. A simple guide to writing a travel expense policy for a small business – click here
6. More than 90% of senior business leaders expect business travel to remain the same or increase over the next year – click here

Posted on 23 January 2026 by VMR Travel