What is a travel expense report? Complete guide with templates

Published

Jan 9, 2025

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Missing receipts. Incorrect totals. A client lunch inexplicably categorized as “transportation.” Sound familiar? The travel expense report might seem like mere paperwork, but it’s critical to good financial management and compliance. These reports help finance teams track spending and maintain clear records for auditing and budgeting. Without them, expenses go unaccounted for, employees face delays in reimbursement, and even the best-laid forecasts fall apart.

In this article, we’ll explore the ins and outs of travel expense reporting, from why it matters for your business to how to set up policies that keep your employees happy and your records compliant.

What is a travel and expense (T&E) report?

A travel and expense report is a document your employees submit to track costs they incur during business-related travel. Companies use T&E reports to ensure employees are properly reimbursed for out-of-pocket expenses like meals, hotels, flights, and transportation.

Beyond reimbursement, T&E reports help companies manage finances. Finance teams can use them to monitor employee spending and identify opportunities to save on costs. From a tax perspective, travel and expense reports are essential compliance documents. If you plan to deduct what your company spends on travel when filing taxes, you’ll need an accurate, itemized record to substantiate the claim.

Organized travel and expense tracking builds accountability and strengthens compliance for employers. For employees, it simplifies the reimbursement process.

What can be claimed as a travel expense?

Spending policies vary from company to company, but most businesses reimburse employees for necessary expenses directly related to work. A dinner with potential clients probably qualifies, as do after-work cocktails to celebrate a big win. Tickets to a concert in the same city where you’re meeting with suppliers? Probably not.

Other examples of commonly reimbursed expenses include business-related:

Airfare. Employers that don’t directly manage employee travel will usually reimburse ticket costs.
Lodging. Hotel stays and other accommodation costs are typically covered, provided they’re not exorbitant. Businesses often limit hotel room rates, while others provide lists of hotels where employees must stay to be reimbursed.
Meals. Some businesses issue traveling employees a per diem allowance to cover meals in lieu of requiring itemized expenses.
Transportation. In addition to fares for taxis, rideshares, and public transport, some companies reimburse employees for fuel, tolls, and parking fees associated with business travel.

Manual vs. digital T&E reporting

Both manual and automated travel and expense reporting can meet the needs of a business. However, depending on the complexity of your spend policies and your available budget, you may find one or the other a better fit for your organization.

Manual T&E reporting usually relies on spreadsheets and paper receipts. Low upfront costs make it an appealing option for smaller businesses, but it can be time-consuming and error-prone. Using a manual travel expense tracker may also become challenging as a company scales and needs efficient processes.

Digital T&E reporting uses features like receipt scanning and automation to streamline the expense tracking process. Many of these tools integrate with payroll and accounting systems, which saves time and improves accuracy. Expense management software also offers a real-time look at how your business allocates costs, which can help you manage cash flow more effectively.

Components of a travel and expense report

While the specific format can vary, an effective T&E report should always include information your finance team needs to confirm the nature of a purchase and its underlying business purpose. Essentials might include:

Employee and trip details. Include the employee’s name, the purpose of the trip, and the travel dates to confirm that any expenses relate to business travel.
Expense details. The date of purchase, expense category, and description of each expense ensure that spending aligns with your company’s travel policy.
Receipts. These serve as proof of the expense for reimbursement and tax compliance purposes.
Approval signature. Approval from a manager or supervisor confirms that the expenses meet company guidelines and are authorized for reimbursement.

Importance of travel and expense reports

T&E reports might seem like one more administrative to-do, but they’re important financial records. Properly managing these reports helps you control costs and make informed financial decisions.

They’re also critical for compliance. If the IRS has questions about how you calculated any deductions, for example, you’ll need your T&E reports to verify claimed amounts and prove that you’ve complied with applicable rules around qualifying expenses.

Compliance

Whether it’s your internal travel policy or IRS regulations, you need accurate travel and expense reports to stay compliant. Without them, you risk penalties during an audit or complaints from improperly compensated employees.

Cost tracking

T&E reports are part of your business's big-picture expense tracking, helping your finance team monitor trends and spot overspending. Keeping a close eye on how employees spend during business travel can play a significant role in keeping departments within budget.

Fraud prevention

When you require employees to submit detailed information about each purchase along with a supporting document, you protect your business against fraudulent claims for reimbursement. Automated spend management tools add an extra layer of oversight, flagging out-of-policy purchases, duplicate claims, and unauthorized spending so finance teams can proactively address problematic behavior.

Improved budgeting

Reviewing and analyzing past business trip data can help you forecast future travel expenses and develop realistic travel budgets. Real-time expense tracking tools give you up-to-the-minute information about how employees manage travel expenses.

4 T&E reporting best practices

When developing procedures around T&E reports and spending, you may want to keep in mind the following best practices.

1. Standardize expense categories

Consistent expense categories make it easier for employees to itemize expenditures correctly. Not only does this simplify the review and approval process, your business also benefits from more accurate data about how and where spend happens on business trips.

2. Implement clear policies

Often, inappropriate purchases happen because employees don’t realize they’ve violated the company travel policy. A straightforward travel policy with examples outlining what is and isn’t permitted helps avoid misunderstandings or overspending.

3. Encourage timely submissions

Setting a regular schedule for submitting and reviewing expense reports helps employees predict when they’ll receive their reimbursements. It also keeps your company’s accounting records clean and current.

4. Automate your workflow with the right software

Using travel expense software to automate parts of the review and approval process simplifies workflows and cuts down on the opportunities for human error. Software that integrates with other finance management tools can also enhance your reporting by consolidating data.

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Travel expense report template

Travel expense report templates simplify your expense tracking by providing a structured format that captures all the essential details your employees need to document their spending. Effective reporting depends on accuracy and consistency, especially when it comes to details like mileage, dates, and purposes. Templates ensure that employees don't overlook them.

For finance teams, a T&E report template simplifies the approval process by making it easy to identify out-of-policy spending or flag missing documents. In the event of an audit, your finance team can rely on expense reports to prove any claimed deductions.

Small business travel expense report example

Here's how a small business might organize important information into a reusable template that standardizes details for each purchase:

Depending on the size of your organization, you might consider creating a document or spreadsheet that you share with your employees to keep everyone aligned about how to submit travel expenses. If you’re a larger business, digital templates can automate certain calculations and integrate with your expense management system to streamline approvals and reimbursements.

What is travel expense software?

Travel and expense reporting software is a specialized tool that automates expense tracking for business travel. By taking over some of the repetitive administrative tasks associated with managing employee spend, it frees your finance team to focus on more complex, strategic processes. T&E reporting software also reduces the risk of human error that can delay employee reimbursements or complicate deduction calculations.

Solutions range from straightforward to complex, but most T&E reporting software will include features like:

Automated expense tracking
Proactive blocks on out-of-policy spending
Receipt scanning
Real-time reporting
Integration with accounting and payroll systems

Simplify travel expense management with Rippling

Rippling consolidates your company’s finances—from payroll and benefits to corporate cards and expense management–giving you an up-to-date view of cash flow across your company and offering unprecedented control over spending patterns.

While most expense management solutions only allow for basic employee-manager approval chains, with Rippling expense management’s advanced policy engine, you can set hyper-custom policies based on the vendor, dollar amount, and expense category, helping you block out-of-policy expenses with ease. You can also tee up automated workflows that help you control spend, like triggering an alert when a department’s expenses sharply increase.

With Rippling, you can:

Automatically route expenses and bills to the right approver every time.
Flag out-of-policy spending with hyper-custom policies, like by vendor or value, for further review.
Close the books faster with AI-powered transaction categorization and integration with your accounting systems.

Travel expense report FAQs

How do I prove travel expenses for taxes?

To prove travel expenses for taxes, keep thorough and accurate records. For starters, you’ll want to hang on to copies of receipts and invoices, and employees who drive should maintain a mileage log to track vehicle use. Tools like receipt scanning apps and automated expense tracking software can simplify many of these administrative tasks.

How do you audit travel expenses?

To audit travel expenses, review the supporting documents associated with individual purchases, like receipts or invoices, and double-check expense categories. If individual expenses seem out of line with company policy, validate the business purpose with the employee. Amounts not adding up? Check for duplicate claims. Using expense report templates can simplify this process by creating an easy-to-follow paper trail and making anomalies easier to spot.

What is the difference between T&E reports and general expense reports?

A T&E report focuses specifically on business travel costs like plane tickets, hotel rooms, meals, and ground transportation. A general expense report, on the other hand, tracks any and all business expenses, from office supplies to software subscriptions to equipment. Because the IRS applies specific rules to deductions for travel expenses, policies around T&E reporting and reimbursement can be stricter than general expense reporting.

What is an expense report?

An expense report is a document employees use to track work-related expenses for reimbursement. Typically, employees submit their expense reports, along with documentation associated with each purchase, to a finance team member at regular intervals. After confirming that the claimed expenses comply with the company spend policy, the finance team processes a reimbursement.

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