An expense policy gives your team clear rules on what they can spend and how to report it. It explains what counts as a work-related cost, who needs to approve it, and how to get the money back. With a clear policy in place, employees know what’s expected, managers can review claims quickly, and finance teams stay in control of spending. Everyone works with less confusion and fewer surprises.
Summary: The Expense Policy
- Explains which expenses the company will cover.
- Sets clear rules for what employees can spend and when.
- Describes who needs to approve each type of expense.
- Tells employees how to submit claims and get reimbursed.
- Acts as the main reference for anything related to work spending.
Why does Your Business need an Expenses Policy?
When employees aren’t sure what they’re allowed to spend, mistakes happen. Someone might book a hotel that’s too expensive. Someone else might forget to keep a receipt. Without clear rules, finance teams have to dig through reports, ask follow-up questions, and double-check every claim. It wastes time and causes frustration on all sides.
A clear policy sets out what counts as a work expense, what paperwork is needed, and who approves each type of claim. With the basics in writing, employees know how to make the right decisions, and managers don’t have to second-guess every purchase.
It also helps you stay compliant with tax laws. Every country has different rules about what qualifies as a deductible expense. A written policy simplifies recordkeeping and keeps audit issues to a minimum, especially when employees submit expenses from different countries or in multiple currencies.
Expense policies: what should they include?
A good policy covers the main types of spending and explains exactly how everything should be handled. Key areas to cover:
- What’s covered and what’s not.List reimbursable expenses like travel, meals, transport, and office supplies. Be clear about what falls outside the rules.
- Travel rules.Business trips often bring the biggest costs. Your policy should cover flights, accommodation, meals, and other trip-related spending.
- Approval rules.Explain who can approve which expenses and set limits. Some companies want approval before money is spent, others handle it after. Choose what works best for your team.
- What proof is needed.Make it clear what kind of receipts are required. Say whether digital copies are fine and what to do if something gets lost.
- Why it matters.These steps keep spending under control and give finance teams the information they need when reviewing claims or preparing for audits.
Getting started: what you need to know
Before writing your expense policy, take a close look at how your company actually spends money. Go through past reports and spot the most common types of expenses. This will show you where money goes, what’s reasonable, and where you might need better limits or tighter rules.
Think about how your team works day to day. A company that hosts a lot of client lunches might need different rules from a business with fixed, routine costs. There’s no point copying someone else’s policy if it doesn’t fit how you operate. The rules should match real habits, not slow people down with things that don’t apply.
It also helps to think about tools. Many teams use expense software to speed up approvals, keep track of spending, and sort out reports. The right system can cut down on paperwork and give you a clearer view of how money moves through the company.
How to make a good expense policy
Start by bringing the right people into the process. Different teams deal with spending in different ways, so it makes sense to hear from:
- Finance – they know what controls are needed
- Managers – they understand what their teams actually spend on
- HR – they can help with training and making sure the policy is easy to follow
Once you’ve gathered input, write the policy in plain language. No legal terms, no vague phrasing. Make sure people reading it can understand what to do without needing help. Use real examples to show what’s allowed and what’s not.
Before sharing the policy across the company, test it with a small group. See if anything is unclear or too strict. Ask for feedback and adjust the wording or rules where needed. You’ll often spot things during testing that didn’t come up while drafting.
What should you include in your policy?
Your expense policy should cover all types of spending that come up in your company. Keep it clear and practical, so employees know what’s allowed and what steps to follow.
Start with a short scope section. Explain who the policy applies to and in what situations. This helps set expectations from the start.
Then cover the main categories of expenses. Be specific about what’s allowed and what’s not. For example:
- Travel – include flights, hotels, meals, and transport
- Office supplies – include everyday items like stationery
- Exclusions – no personal costs, unnecessary upgrades, or high-value items without approval
Set clear spending limits based on role and expense type. For instance:
- Junior staff can spend up to £100 without approval
- Managers can sign off up to £1,000
- Anything higher needs sign-off from a department head or finance
Spell out what kind of receipts or documents are needed at each level. The more specific you are, the less confusion later.
Expense Policy Template
Every company needs a clear policy to guide how employees spend money on behalf of the business. This section outlines the key parts of a working expense policy – from recent updates to travel guidelines, reimbursement steps, and what happens when rules are broken. You can use this as a starting point to build your own document or update your current one.
Each part below covers a specific area and can be adapted to fit your team’s size, budget, and style of working.
The latest updates
Your expense policy shouldn’t stay the same year after year. As your company grows and the way people work changes, your rules for spending need to keep up. It’s a good idea to review the policy at least once a year. Look at how well it’s working, ask for employee feedback, and check whether any legal or tax rules have changed.
In recent years, many companies have added new sections to cover things like remote work costs, virtual meeting tools, and home office setups. Business travel has also changed, with fewer long trips and more short visits or mixed travel arrangements. These shifts affect how expenses are claimed and approved.
New tools can also change how your policy works. For example, if your team starts using expense software that connects with your accounting system, you might need to update approval steps or change what receipts are required. It’s worth reviewing the policy anytime you introduce new systems that affect how people submit or approve expenses.
Roles and responsibilities
Everyone involved in spending company money has a part to play. A clear split of responsibilities keeps things organised and avoids confusion.
- Employees are responsible for knowing what the policy allows, submitting accurate expense reports, and keeping proper records. If the rules say a receipt is needed, they should include it. If something requires approval, they should get it first.
- Managers review expense claims and make sure spending makes sense. They’re expected to check that costs are reasonable and fit the purpose. Managers also play a role in explaining the policy to their teams and spotting issues early, before they turn into bigger problems.
- Finance teams handle what comes after. They check the paperwork, process reimbursements, and keep records in order for audits. They also look at overall spending trends, track policy breaches, and share reports with leadership to help keep spending under control.
Documentation requirements
Employees need to keep proper records for all work-related spending. Receipts are required, whether physical or digital, and must be clear and complete. The policy should list accepted formats and explain what details must be visible.
For small costs, a simple receipt is usually enough. Larger expenses may need extra documents, like a purchase order or a note explaining the reason for the spend. Travel claims often require boarding passes, hotel bills, and meal receipts with a business explanation.
The policy should also explain how long records must be kept and what to do if something goes missing. Some companies accept a written note for small amounts. Others ask for confirmation from a manager.
Corporate cards usage
Corporate cards can make spending easier to manage, but they need clear rules. The policy should explain who gets a card, what it can be used for, and how it will be monitored.
Cardholders are expected to use the card only for approved business costs, keep all receipts, and report any lost or stolen cards right away. Personal use is never allowed. Some companies set limits by amount or by category to keep spending under control.
Card use should be reviewed regularly. The policy should say how often receipts must be submitted, who checks the statements, and what happens if something looks off. Regular checks help catch problems early and keep records accurate.
Guidelines for travel expenses
Travel spending often involves more rules than other types of expenses. Your policy should explain how to book trips, what costs are covered, and how meals and accommodation are handled.
Accommodation rules might include:
- Reasonable hotel rates based on the location
- Standard business-level rooms, no upgrades without approval
- Booking in advance to keep costs down
- Extra approval for longer stays or high-end hotels
- Clear rules for shared rooms on group trips
Transport rules should cover:
- Economy class for local flights
- Business class only for longer international travel
- Use of rental cars, public transport, and taxis
- Per diem rates for meals and other small costs, based on location
Employees are expected to pay for personal expenses themselves. That includes entertainment, meals beyond the allowed rate, and anything unrelated to work during the trip.
Further Reading: Enhancing Travel Expense Management with Virtual Cards
Budgets for team outings
Company events and team activities need clear spending rules. These costs often sit between business needs and employee perks, so the policy should explain what’s allowed and what isn’t.
Set a yearly budget for team outings. This can be per team or per employee, depending on what works best. List the types of events the company will pay for – such as team lunches, off-site meetings, or group activities tied to business goals.
Make sure any outing is approved ahead of time. Say who can approve the event, what documents are needed during planning, and how to report the costs afterward. Some companies ask for a short proposal explaining why the event is happening and what the team hopes to get from it.
Include rules around alcohol, choice of venue, and whether guests or family members can attend. These details help keep the event professional and avoid any misunderstandings later.
Spending & approvals
Clear approval rules keep spending under control without slowing things down. Your policy should set spending limits, name who can approve what, and explain how long decisions should take.
The approval chain should reflect how your company is structured. Smaller, routine expenses might only need sign-off from a line manager. Bigger purchases could require approval from department heads, senior leaders, or finance. Some companies use a two-step system where both a manager and finance need to sign off.
The policy should also cover exceptions. For example, emergency purchases or urgent weekend expenses may not follow the usual steps. Outline when these cases apply and how to handle them. Make sure there’s a clear process for escalating issues if an approval is delayed or disputed.
Reporting expenses
Expense reports turn everyday purchases into clear financial records. The policy needs to set deadlines for submission, list the required details, and explain how to submit reports.
Even with tools that scan receipts or allow mobile uploads, employees still need to follow basic steps. Reports must include all relevant information, be categorised correctly, and follow the approval process.
Make it clear how to assign costs to projects or departments and how to report expenses that cover more than one purpose. Each report must be checked for accuracy and policy alignment, either by a manager or the finance team.
Further Reading: The Complete Guide to Business Expense Management
Expense reimbursements
Reimbursements come at the end of the process, when employees receive money back for approved work expenses. This step needs to be timely and predictable to keep people confident in the system.
A standard reimbursement process often includes:
- Submitting the expense report
- Manager review and approval
- Finance checks and record confirmation
- Payment and notification to the employee
Set a clear timeline so everyone knows when payments will be made. Many companies aim for five to ten business days after submission. Reaching this goal depends on smooth internal workflows and enough resources.
The policy should also cover special cases. This includes how to handle currency conversion, what to do when only part of a claim is approved, and how to resolve any disputes.
Non-reimbursable expenditures
Some expenses are never covered by the company, and the policy needs to make that clear. This avoids confusion, prevents disputes, and protects the budget.
Common exclusions include:
- Personal spending during work trips
- Excessive meals or alcohol
- Recreational activities unrelated to work
- Any purchase that doesn’t support a clear business purpose
Even if something happens during a business trip, that doesn’t make it reimbursable. Entertainment and upgrades for personal comfort remain the employee’s responsibility.
Any expense that breaks company policy or legal rules is automatically excluded. This covers false claims, skipped approvals, or anything that goes against company values. The policy must explain the consequences clearly to prevent repeat issues and keep things fair.
Submission deadlines for expense report
Setting clear deadlines for submitting expense reports helps keep financial records accurate and cash flow predictable. Most companies expect reports to be submitted within 30 to 60 days after the expense is made. This gives employees enough time without slowing down internal processes.
There need to be rules for late submissions. Some delays are unavoidable, especially during long projects or business travel. A policy can allow flexibility for valid reasons while still addressing repeat delays with clear consequences.
Instead of rolling deadlines, some companies ask employees to submit reports monthly or quarterly. This makes processing simpler but can create short-term cash issues for employees who spend early in the period.
Whatever the approach, clear timing helps avoid missed claims and keeps reporting consistent across the team.
Currency exchange policy
When employees spend money abroad, the expense policy needs to explain how foreign currencies are handled. This includes which exchange rates to use, how conversions are calculated, and what documents are required for international claims.
Many companies use a consistent rate from a recognised source rather than the rate shown on the receipt. The policy should name the source and explain whether the rate is based on the date of purchase, submission, or another fixed point. Some companies also allow the use of the credit card provider’s rate if it works out better for the employee.
The rules must also cover cash advances for international travel, how to report expenses paid in foreign currency, and what happens when exchange rates shift significantly.
Activity outside of policy
When rules are broken, the policy must explain what counts as a violation and what steps follow. A clear, consistent approach keeps the process fair and functional.
Some issues are minor, like missing receipts or unclear documentation. These can often be solved through guidance or a reminder, especially if the mistake was unintentional.
Deliberate breaches, including false claims or skipped approvals, call for immediate follow-up. The policy explains how these cases are reviewed, what disciplinary actions apply, and when external reporting is required.
Exemptions
Some situations fall outside the usual rules, and the policy must explain when an exception is possible, who can approve it, and what documents are needed to support the request.
Emergency spending is one common case. Employees might need to act quickly without time to follow the normal process. The policy explains what qualifies as an emergency and how to get approval after the fact.
Senior executives may also follow slightly different rules, depending on their roles and responsibilities. These exceptions need to be clear and transparent, with proper checks in place.
Making these points clear helps the company stay practical without losing control.
Typically used categories for transaction coding
Clear expense categories make reports easier to process and help the company track where money goes. The policy lists each main category, gives examples, and explains how to code expenses correctly.
Common categories include:
- Travel and accommodation
- Meals and entertainment
- Office supplies and equipment
- Professional services and training
- Transport, including vehicles and fuel
- Communications and tech-related costs
For project-based work, expenses often need to be linked to specific clients or internal budgets. The policy explains how to assign costs, what extra details are needed, and how to handle shared expenses that span more than one project.
Reviewing category data regularly helps spot spending patterns and find areas where savings are possible. The policy also names who handles these reviews and what happens when adjustments are needed.
Expense policy guidelines
An expense policy only works if people follow it. That means the company has to keep it up to date, explain the rules clearly, and check regularly that everything is working as expected. Training helps employees handle real situations, and open communication makes updates easier to follow.
It’s also important to collect feedback. Surveys, team discussions, and usage reviews can show where the policy works and where it causes confusion. These insights often lead to useful changes or new training.
To keep everything on track, the company runs routine checks. This includes audits, reviews of expense patterns, and occasional spot checks. Results are shared with the right teams, and any gaps are addressed quickly.
What is the best way to implement the Expense Policy Template?
Rolling out a new expense policy takes planning, clear communication, and steady support. Start with a small test group to check how the policy works in practice. This early trial helps reveal problems and gives you a chance to make changes before it reaches the whole company.
Training covers everything from how to submit expenses to how approvals are handled. Use a mix of written guides, short videos, and live sessions to match different learning styles. Plan regular follow-ups, especially when updates are made.
If the policy comes with new software or processes, give employees time to adjust. Provide clear instructions, keep support easy to reach, and check in with teams during the first weeks. This approach builds confidence and helps the policy work smoothly from the start.
How Wallester can help
Managing expenses across a growing company takes more than a few spreadsheets and receipts. Wallester offers an all-in-one platform that brings structure, transparency, and speed to the entire process. It works alongside your expense policy to keep things clear and under control.
Here’s how Wallester can support your team:
- Full control over company spending.Issue virtual and physical cards with built-in rules. Set limits, block specific merchants, and keep spending visible in real time.
- Clear and flexible approval paths.Create approval rules that match your company’s structure. Managers can review and confirm requests from a mobile app or desktop – no delays, no confusion.
- Direct connection with accounting tools.Sync expenses with systems like Xero, QuickBooks, and others. This keeps records consistent and avoids re-entering the same data more than once.
- Mobile expense reporting made simple.Employees can upload receipts from their phones, match them to transactions, and categorise expenses right after payment. Everything stays in one place for review.
- Policy rules built into the process.The system checks every expense against your internal policy. It flags missing receipts, overspending, and purchases that fall outside approved categories.
- Real-time reporting with practical insights.Use live dashboards to monitor spending across teams, spot unusual activity, and adjust budgets based on what’s actually happening.
Wallester gives companies the tools to stay in control without adding extra steps for employees. It simplifies expense management while keeping everything aligned with how your teams work.Want to make expense handling easier across your organisation? Get started with Wallester Business and take the pressure off your finance team.
