An expense policy is a set of guidelines established by an organization to govern how employees incur, report, and are reimbursed for costs associated with business travel.
By defining spending limits, preferred vendors, allowable categories, and documentation requirements, an expense policy helps control costs, maintain consistency throughout the organization, support auditing and compliance efforts, and reduce disputes or confusion regarding reimbursements.
Before travel, employees are typically provided with the policy as part of travel planning and approval procedures, ensuring they understand allowable expenses, required approvals, and any restrictions on spending.
Employees incur costs within the boundaries of the policy, using approved methods such as corporate cards, P-cards, virtual cards, or reimbursable out-of-pocket payments.