Navigating the Gray Areas of Travel Expense Reimbursement

Like so many aspects of modern business, travel expense reimbursement comes with its share of gray areas—those occasional but frustrating situations that confuse employees, challenge managers, and push policies to their limit. Just when you think you’ve nailed down a process, new scenarios emerge. 

Questions around tipping, personal detours, and other edge cases have long sparked debate in the world of travel expense reimbursement, creating confusion and challenges for employees, as well as for supervisors trying to approve expenses in accordance with company regulations. You’ll find that if left unresolved, these gray areas are more likely to cost your organization money than save it. 

So what can your business do to dispel ambiguity while maintaining the highest possible standards for travel expense reimbursement? 

Understanding Travel Expense Reimbursement

Travel expense reimbursement refers to the process by which a company compensates its employees for the ordinary and necessary expenses incurred during their work-related travel. If, for example, your organization employs a number of employees who travel as part of their job-related duties and use their personal vehicles to do so, it’s only fair that you reimburse them accordingly. In some cases, like in the states of California, Illinois, and Massachusetts, it’s even the law. 

Sometimes, however, it’s not that cut-and-dried. When employees are working in the field, it can sometimes be tough for managers and supervisors to guarantee that the expenses reported are accurate. For employees, it can sometimes be equally difficult to remember whether a specific expense is reimbursable or not. Your mobile workers don’t have your travel expense reimbursement policies tattooed on their wrists, after all.

Common Gray Areas in Travel Expense Reimbursement

Confusion and uncertainty around T&E reimbursement policies and procedures can cause the aforementioned reimbursement gray areas around certain expenses. These expenses may include:

Gratuities

If an employee, in the course of their work-related travel, tips someone for their services, is that tip covered by company T&E policies? If so, how much can an employee tip and be reimbursed?

Personal Detours

Let’s say an employee who uses their personal vehicle for work-related travel stops by their pharmacy to pick up a prescription on the way to a business appointment. Are they still entitled to reimbursement for the mileage for that trip? 

Ride-sharing

How should Lyft or Uber rides taken as part of job-related travel be handled when it comes to possible reimbursement? If multiple employees decide to take a rideshare together, can they receive reimbursement for the split cost and mileage of that trip? And furthermore, can these employees still receive reimbursement pay if it would have been cheaper for them to drive themselves?

Remote Work Expenses

One of the many long-term impacts the COVID-19 pandemic had on the business world was the increase in and normalization of remote work. This increase in from-home employees has come with a corresponding influx of questions around reimbursement for remote work costs. Should a company cover the costs of home office equipment for their remote employees? What if a remote employee decides to work from their favorite coffee shop and purchases a drink to sip while they work? Is that reimbursable? 

Meals & Entertainment

Oftentimes, work-related expenses extend past travel costs to costs for things like meals and entertainment, such as when taking a client out to dinner. If the employee or the client orders alcohol, is that cost covered by company reimbursement policies? Is the meal or event only covered up to a certain cost limit, or by a per diem? 

Miscellaneous Travel Expenses

Other expenses incurred by employees over the course of their work-related travel could raise questions about their employer’s T&E reimbursement policies. These could include paying highway tolls, fees for parking at certain locations, or costs incurred if an employee needs to rent a vehicle for work. 

What Can You Do to Eliminate the Gray Areas?

The list of possible gray areas in the realm of travel expense reimbursement can get pretty unwieldy, and I’m sure we’ve barely scratched the surface. Your organization should do everything possible to stave off confusion and chaos by implementing clear, flexible regulations for company T&E reimbursement.

Your organization should facilitate this by doing its utmost to make its policies around reimbursement for work-related expenses as comprehensive as possible while still allowing for versatility, especially in emergency situations. Start by clearly defining what a reimbursable expense is—and what it isn’t. In some cases, it may be smart to apply limits for things like meals or entertainment. Consider establishing pre-approval requirements for certain expenses, as well. 

When it comes to questions like tipping—and how much to tip—the best rule of thumb is to have a rule. A T&E policy can be written to specify, for instance, that gratuities will be reimbursed up to a predefined percentage of the total bill. This works well for restaurant meals and transportation services. However, it becomes trickier with less standardized services such as doormen, porters, and housekeepers. Still, the key is consistency: even a general guideline is better than none.

When studying and strengthening your organization’s expense policies, don’t neglect the role approvals play in travel expense reimbursement. To simplify the process for supervisors, your company may consider establishing pre-approval requirements for certain common expenses. It’s also important to make sure that your organization’s approval workflows are multi-level, and that no one on any level ever bears responsibility for reviewing and approving their own expenses.

When taking stock of organizational T&E processes, it’s impossible to overstate the importance of proper employee education and training. Ultimately, the best policies can only make an impact if the people to whom these policies apply acknowledge and understand them. You want to empower your employees with the tools to make the right choices when they’re doing their jobs in the field. Start by extending and maintaining an open line of communication with your workforce, and making sure they know where to go if they have questions or concerns. 

Travel Expense Reimbursement Software Removes the Guesswork

Clear, comprehensive policies are a good start for optimizing travel and expense reimbursement within your company, but the right digital tool might be what your workplace needs to take its T&E management one step further. When an organization, especially one with a mobile workforce, tries to do everything manually, it can be hard to keep processes for expense reimbursement consistent. Software solutions can help fill in the gaps left behind by inefficient manual systems, automating processes and applying preset rules to organizational workflows, safeguarding compliance with company policies. 

Software solutions for travel expense reimbursement also ease the T&E process by narrowing the margin for human error, miscalculations, and expense fraud. Software offers a higher level of on-the-go accessibility, letting mobile employees log expenses and submit reports while on the job from their mobile devices, reducing the risk of forgotten or inaccurate claims. Automated systems can also be preset to catch and flag noncompliant, problematic, or fraudulent behavior, such as mileage padding, and false or duplicated reports.

T&E software also streamlines and simplifies reimbursement for supervisors and management by automating multi-tier approval workflows to ensure the right people review and approve expenses without gaps, bottlenecks, or missing paperwork slowing down processes. The efficiency allowed by automating travel expense reimbursement also extends all the way to the distribution of the payments themselves; The right T&E software can sync a company’s expense data with its existing payroll and accounting systems, preventing errors and enabling prompt payments. 

Another perk of using software to manage travel expense reimbursement? It comes equipped with centralized, secure digital record storage, so that the organization using it is always prepared for an audit, white maintaining compliance with IRS or industry documentation requirements. 

CompanyMileage Sets You and Your Employees Up for Success

SureMileage, CompanyMileage’s software solution for mileage tracking and reimbursement, is the last key element of top-notch travel expense reimbursement  management. SureMileage does everything listed above, plus it has a unique method for automatically tracking and calculating employees’ work-related travel mileage. 

With SureMileage, employees simply have to enter the start and end points for each work trip, and from there, the system automatically calculates the best route between those two points, and the corresponding amount for reimbursement. This method, called point-to-point calculation eliminates the risk of calculation errors, mileage inflation, or reimbursing personal or commuting mileage. 

SureMobile, our mobile app, takes this convenience one step further. SureMobile utilizes an integrated address book, as well as a QuickCapture widget that allows busy employees to record important trip data with the simple tap of a screen. At the end of their workday employees simply have to take five minutes to organize trip data and any relevant receipts or documents before quickly and easily submitting expense reports for approval.

Once submitted, those reports move through an automated workflow, easily customizable to meet the existing management structure of your business. After approval, our software integrates with all major accounting and payroll software, guaranteeing the fastest and most accurate reimbursements possible. 
CompanyMileage saves our clients up to 25-30% on mileage reimbursement. To find out more about how we can help your business reimagine reimbursement while saving you money, contact us for a demo today!