Travel expense reimbursement: how to organize expense reports

Crumpled receipts in pockets, spreadsheets filled in after the trip, lost receipts and a finance team that spends hours checking everything. Travel expense reimbursement is one of the most laborious parts of corporate travel, both for travelers and for approvers. With clear rules and the right tools, it can be simple, fast and transparent.

In this guide, we show how to organize reimbursement and expense reporting for business travel in your company.

What travel expense reimbursement is

It is the company paying back the expenses an employee covered out of pocket during a business trip: meals, local transportation, parking, fuel, tolls and other expenses provided for in the policy. The expense report is the process in which the traveler proves those expenses in order to be paid back.

Reimbursement, cash advance, per diem or corporate card?

There are four main models, which can be combined:

• Reimbursement against receipts: the employee pays and is reimbursed later upon presenting an invoice. It is the most controlled model, but it requires the traveler to have the funds to pay up front.
• Cash advance: the company advances an amount before the trip and the traveler reports on return, giving back what is left or receiving the difference.
• Per diem: a fixed daily amount for meals and small expenses, with no need to prove each one. It simplifies the process, but the amounts must be well calibrated by destination.
• Corporate card: expenses are paid with a company card, with defined limits and categories. It eliminates cash advances and makes reconciliation easier.

How to organize reimbursement in 7 steps

1. Define in the policy what is reimbursable

List what the company covers (meals, taxi or ride-hailing, parking, fuel, laundry on long trips) and what it does not (alcoholic drinks, minibar, fines, personal expenses). The travel policy is the foundation of everything; see how to create a corporate travel policy.

2. Set limits by category

Maximum amounts for breakfast, lunch and dinner, for example, with different values by city when needed. Clear limits prevent case-by-case debates.

3. Standardize receipts

Define which documents are accepted (invoices, tax receipts, plain receipts) and whether the invoice must be issued in the company’s name and tax ID. Give guidance on what to do when there is no receipt, as with some tolls or tips.

4. Set deadlines

A deadline for the employee to submit the expense report after the trip, a deadline for the manager to approve it and a deadline for finance to pay. Short deadlines that are actually met build trust in the process.

5. Create an approval workflow

Who approves each type of expense and up to what amount. Off-policy expenses need a justification and a specific approval.

6. Control mileage

When employees use their own car, set an amount per kilometer that covers fuel and wear, and ask for a record of origin, destination and distance for each trip.

7. Use an expense management tool

Expense apps let travelers photograph the receipt on the spot, classify the expense, send it for approval and track the reimbursement. No more spreadsheets, lost paperwork or manual data entry.

Common mistakes in expense reimbursement

• Vague rules that each manager interprets differently.
• Expense reports submitted weeks after the trip, when receipts are already lost.
• Slow reimbursement, which discourages employees and causes dissatisfaction.
• Manual checking of every receipt, which takes up finance’s time and leaves room for errors.
• No reports showing how much is spent by department, traveler and type of expense.

Pay attention to labor and tax aspects

How expenses are paid has labor and tax implications. Under Brazilian labor law (CLT), travel allowances and expense allowances are not part of the employee’s salary, but the amounts and the format must be well defined and documented. Receipts issued with the company’s tax ID (CNPJ) also make bookkeeping easier. Before choosing a model, validate the rules with your accountants and your legal department.

How to reduce the volume of reimbursements

The best way to simplify reimbursement is to have fewer expenses to reimburse. When flights, hotels and car rentals are bought through the agency and invoiced directly to the company, the traveler is left with only day-to-day expenses. See other practices in how to reduce corporate travel costs.

Expense management with ArrowTur

At ArrowTur, flights, accommodation and car rentals are invoiced directly to your company, with payment terms longer than a credit card’s and no deposit for car rentals. For day-to-day expenses, our expense management tool, in the app or on the web, lets travelers record receipts and invoices on the spot, approve them through customized workflows within the policy, control mileage and fuel, and get reimbursed in a simple, transparent way.

Learn about our corporate travel management or call our sales team at +55 11 5189-4120.

Frequently asked questions

What is the ideal deadline for expense reports?

Many companies use 5 to 10 business days after the traveler returns. What matters is that the deadline is in the policy and that everyone meets it, including finance when paying.

Is it better to pay a per diem or reimburse against receipts?

A per diem simplifies the process and works well for frequent, standardized trips. Reimbursement against receipts gives more control over each expense. Many companies combine the two: a per diem for meals and reimbursement for transportation and other expenses.

What should be done when an employee loses a receipt?

Define an exception procedure in the policy, such as an expense statement signed and approved by the manager, with an amount limit. Tools that capture the receipt on the spot greatly reduce this problem.