How to write a travel & expense policy in 7 steps

Business travel is on the rise. According to the World Travel & Tourism Council, in 2024, business travel spending reached a new record of more than $1.5 trillion. That makes the need for a clear and effective travel and expense (T&E) policy more important than ever.

A travel and expense policy outlines how employee expenses for business-related travel are managed and covers actual expenses, such as airline tickets, domestic travel costs, and hotel reservations.

By establishing clear guidelines up front, a T&E policy helps eliminate confusion, minimize errors, and promote responsible spending habits among your employees. In this article, we provide a step-by-step guide to creating a T&E policy, including a template and tips for compliance and enforcement.

Policy introduction and purpose

An effective T&E policy addresses all elements related to business trip planning, such as pricing, travel advances, per diems, and travel management. Additionally, it covers expense management, detailing how personal out-of-pocket expenditures are handled. It also helps you make sure team members submit reimbursement requests with original receipts.

To align with expense policy best practices, it should be clear, comprehensive, and easily accessible to all employees, contractors, and managers, promoting adherence and simplifying the approval process.

The benefits of a clear T&E policy include:

• Cost control: It helps you manage company costs by setting clear spending limits
• Compliance: Having a policy in place allows you to stay compliant with legal and tax regulations, and helps your team adhere to consistent policies
• Reduced confusion: The policy is in writing, so everyone has a clear idea of what is and isn’t reimbursable, with fewer gray areas
• Reimbursements: With a clear process in place, your reimbursement workflow should become more streamlined and efficient

Who should know this policy?

The key to enforcing your policy is communicating it to your team and making sure everyone knows their role. Here is a list of each role and its responsibilities:

• Employees: Getting approvals, submitting expense reports, and understanding the policies
• Managers: Making sure their team understands the policy, and approving and denying expense requests
• Finance team: Reviewing expense reports, managing reimbursements, and enforcing policy guidelines
• HR/operations: Communicating the policy widely, during onboarding, and when the policy changes

The essential components of a travel and expense policy

While a well-structured T&E policy should be customized to your business travel needs, there are core components that every policy should include. Let’s take a closer look at the key elements:

Expense categories

Clearly define the types of expenses that are and aren’t eligible for reimbursement upfront so your employees have clarity and can make informed spending decisions. Examples of reimbursable expenses might be air travel, business meal expenses, car rentals, entertainment expenses, professional development, and office supplies.

For instances when employees use their personal vehicles, include a mileage reimbursement policy, including company-specific mileage rates or IRS rates.

Non-reimbursable expenses include personal travel expenses such as leisure activities or upgrades to business class beyond the allowed standard.

Booking and approval process

An effective employee travel and expense policy provides clear instructions on how employees are to make travel arrangements. This includes selecting preferred airlines, lodging expenses, and arranging ground transportation.

It also outlines the process for obtaining preapproval for certain business expenses, such as using a designated travel agency or corporate booking tool.

Expense submission and reimbursement

Specify the required documentation, timelines, and approval workflows for submitting and processing expense reports. This includes detailing the types of receipts or supporting documents needed, the deadlines for submitting travel expense reports, and the approval process.

The typical process could look like this:

1. Employee incurs a travel expense
2. Employee submits expense report with necessary documentation
3. Manager approves expense report
4. Finance team approves reimbursement
5. Employee receives expense reimbursement within 7 to 10 business days

When you create a transparent and consistent reimbursement process, it makes things easier and better for everyone. Employees are happy as they get paid on time, and your finance team receives what they need in a timely manner.

Travel expense policy template

Regardless of your business type or size, a travel and expense policy should always follow a certain template. You can then customize to meet your needs. Be sure to include the following sections:

• Purpose
• Preapprovals
• Booking guidelines
• Approved expenses
• Non-reimbursable expenses
• Reimbursement policy and process
• Policy violations

Once you have a framework, customize your policy to include elements such as spending limits, industry-specific requirements, and specific approval workflows necessary at your company.

If you’re looking for a place to start, Ramp offers a customizable expense policy template for businesses of all sizes.

7 Steps to writing a clear travel & expense policy for your business

1. Set clear guidelines for travel bookings

The first step in creating a T&E policy is to establish guidelines for how employees should book their travel arrangements. This includes specifying the preferred vendors, such as airlines, hotels, and rental car companies, as well as any negotiated corporate rates.

You should also outline the allowed class of service for various modes of transportation (economy, business class, or first class) and any procedures employees must follow when booking travel (using a corporate travel agency vs. an online booking tool).

Setting these guidelines upfront helps manage travel costs, ensure consistency in employee experiences, and maintain visibility over business spending.

2. Outline expense submission and reimbursement procedures

Next, define the process for employees to submit expense reports and receive reimbursement. This involves outlining the required documentation, such as itemized receipts, invoices, and mileage logs, that employees must provide.

You also need to establish expense report submission deadlines and an approval workflow. Clarifying the reimbursement timeline and acceptable payment methods streamlines the expense reporting process and ensures timely employee reimbursement.

3. Incorporate policy compliance and safety measures

Your T&E policy should address compliance with relevant laws and regulations, as well as safety considerations for business travelers. This may include adhering to per diem rates and other IRS guidelines for deductible expenses and company credit cards or travel expense reimbursement policies.

Be sure to provide guidelines for booking lodging expenses and ground transportation to ensure the safety and security of your employees while traveling. Establishing procedures for reporting lost or stolen company property, including laptops or mobile devices, is another important compliance and risk management consideration.

4. Adapt the policy for remote and hybrid work environments

It's important that your T&E policy addresses the needs of a remote or hybrid work workforce. This may include reimbursement guidelines for home office equipment, supplies, and internet/utility costs, as well as policies around virtual team building or client meetings, allowances for meal delivery, or virtual event tickets.

Don't forget to consider how your policy applies to employees working remotely from different states or countries, including potential tax implications and insurance coverage.

5. Use a template to create your travel and expense policy

Once you’ve confirmed the details for your policy, it’s time to document it. Use an expense policy template as a starting point to ensure you don't overlook any critical components like mileage rates, parking fees, or guidelines for lodging.

You'll want to customize sections of the template to fit your business purpose and travel needs, but policies should typically include sections on:

• Roles and responsibilities: Who manages which piece of the approval process
• Using corporate cards: Best practices for managing the use of company credit cards
• Travel expense policy: Specifics of things such as remote employee expenses, travel costs, and non-reimbursable expenses
• Submitting expenses: The process for submitting travel expense reports to finance
• Reimbursement: The approval process for expense reports and the timeline for receiving reimbursement

6. Embed your travel and expense policy into your finance tools

Documenting your policy is just the first step. To prevent out-of-policy spending, utilize travel and expense management software to build guidelines into your company’s booking processes and corporate cards. Look for travel management tools that allow you to:

• Approve trips before booking, and route requests to different approvers depending on the team and amount.
• Dynamically adjust airfares and hotel maximums using market rates for a given route, or set fixed amounts.
• Help employees find and book in-policy hotels and flights, and block out-of-policy bookings from going through until they receive additional approval.
• Make it easy for employees to submit their expenses via SMS or email.
• Automatically analyze per diem expenses, trigger alerts for overspending, and flag unusual expenses like weekend spending or excessive tipping.

7. Communicate your travel and expense policy

With your travel policy and tools in place, the final step is to communicate the policy to your team. Consider hosting an in-person training session or creating a discussion forum for employee questions. Regularly review and update the policy to address changing business needs or regulatory requirements.

Compliance and enforcement

According to the 2025 Amex Trendex: Business Travel Edition, 90% of companies value increasing control over travel spending. So compliance and enforcement of T&E policies are more relevant than ever.

To ensure compliance, consider the following:

• Communication: One of the keys to enforcement is how well and how often you communicate your policy to the team
• Consistency: Make sure everyone on your team follows the same guidelines, holding them all to the same standards
• Automation: Expense management tools can help flag out-of-policy expenses or missing receipts
• Audits: Either monthly or quarterly, be sure to audit spending, expense reports, and reimbursements to look for trends and ensure the policy is understood

Consequences for non-compliance could include delayed reimbursements, additional requests for documentation, or even disciplinary action.

Approval workflows

Put approval workflows in place as a check on compliance. When the process is clear and transparent, it promotes accountability and keeps costs in check.

In a typical workflow, employees submit expense reports, managers review and approve, and finance teams provide the final stamp of approval and process the reimbursement.

A manager, finance leaders, or even executives should pre-approve rare exceptions to a travel expense policy. Document all exceptions for tracking.

Violations and consequences

While it’s nice to think you will create a policy and everyone will follow it neatly, there will likely be policy violations. These are some of the most common policy violations:

• Improper documentation or missing receipts
• Travel upgrades without pre-approval
• Submitting personal expenses
• Late expense reports

When a violation arises, flagged manually or through an automated tool, usually the first step is to ask for additional information or to ask the employee to correct the mistake by submitting documentation, etc. If this is a repeat offense or it goes unresolved, escalate it to management.

Violations could lead to revocation of corporate cards, denial of reimbursements, or disciplinary action, depending on the situation.

How Ramp simplifies travel and expense policy enforcement

Creating an effective travel and expense policy is challenging. You need rules strict enough to control costs and ensure compliance, yet flexible enough that employees can actually follow them. Most finance teams struggle with policies that exist only on paper, gathering dust in employee handbooks while real-world spending happens without proper oversight and controls.

Ramp transforms this challenge by building your policy directly into our expense management platform. Instead of hoping employees remember spending limits, Ramp's customizable spend controls let you set precise rules at the card level.

You can create merchant-specific restrictions, category limits, and even time-based controls that automatically enforce your policy. For instance, you might allow $50 daily meal allowances during business travel but restrict entertainment purchases entirely, all enforced in real time at the point of purchase.

The platform's automated receipt matching and expense categorization eliminates another major compliance headache. When employees make purchases, Ramp automatically captures and matches receipts, categorizes expenses according to your chart of accounts, and flags any transactions that fall outside policy parameters.

Plus, Ramp provides real-time visibility into all travel and expense spending across your organization. Finance teams can monitor policy compliance as spending happens, not after the fact. Built-in approval workflows ensure that any exceptions or special requests get proper authorization before reimbursement.

By embedding your T&E policy into the actual spending process, Ramp turns this traditionally manual, error-prone compliance exercise into an automated system that protects your business while making life easier for traveling employees.

Set your T&E policy on autopilot

Ramp's corporate card and spend management platform seamlessly integrates with your travel and expense policies, featuring compliance checks and capabilities to automate expense reporting, ensuring every transaction aligns with your guidelines.

Try an interactive demo and see why businesses that choose Ramp save an average of 5% a year across all savings.