Guide to travel expense reporting

Quick insights

• Travel expense reports are documents detailing any expenses incurred during business trips.
• Employees submit travel expense reports to get reimbursed for out-of-pocket expenses.
• Businesses can use travel expense reports to help manage travel budgets.

For some small businesses, work-related travel is an important part of growing a business. But expenses for airfare, hotels and meals can add up over time. This is why it can be important to track all travel expenses with travel expense reports.

Read on to learn more about common travel expenses, why businesses monitor travel purchases and how to create a travel expense report.

What are travel expense reports?

A travel expense report is a detailed, itemized list of purchases made during business travel. This may include mileage, airfare and food, for example. Each employee keeps their receipts so they can attach them to their individual reports.

Receipts ensure employees receive accurate reimbursements.

Common travel expenses

Employees can typically be reimbursed for these types of business travel expenses:

• Airfare
• Mileage
• Car rental
• Rideshare/public transit
• Hotels/lodging
• Meals
• Incidentals (like tips, parking fees and baggage fees)
• Other miscellaneous expenses related to travel

It may also be beneficial for small business owners to apply for a business credit card that allows cardmembers to earn points on travel expenses. Travel credit cards can help business owners earn rewards on eligible purchases to reinvest into their business.

Why expense reports can be important

Travel expense reporting can be a useful practice for small businesses and large corporations alike because it allows businesses to properly manage their budgets. Regularly tracking business trip expenses can help financial stakeholders set reasonable budgets and plan for any future trips.

Plus, expense reports allow businesses to reimburse employees accurately and in a timely fashion. Reimbursing employees on time can also help businesses get a more accurate picture of their cash flow.

What to include in a travel expense report

While expense report templates will differ between businesses, most travel expense reports contain the following details:

• Employee information
• Trip departure and return dates
• An itemized list of each expense
• Subtotals, categories and descriptions of each expense
• Date of each purchase
• Accompanying receipts
• Total (including tax) for all purchases

How to report travel expenses

Employees submit travel expense reports to receive reimbursements. Here’s how the process generally works:

Understand company travel expense policies

Before an employee embarks on a business trip, it can be helpful for them to understand any company policies about travel expenses. Here are a few things they may want to consider before departing:

• The total budget per employee for airfare, hotels and transportation
• How much companies will reimburse for food per day
• What information they need to document for each expense
• When expense reports are due each month

If you’re a business owner who doesn’t have answers to those questions, it may be time to create some formal business travel policies to help your employees stay on budget and receive timely reimbursements.

Gather receipts

You may want to advise employees to save all their receipts so they can attach them to their expense reports. This includes digital receipts for purchases like rideshare and food delivery services.

Taking a photo of each receipt will usually suffice, but some expense management software can take a photo and save it to an expense report draft. As your company grows, it may be wise to consider software to help automate the expense reporting process.

Create an expense report

When employees return home, they can create their travel expense report. Some small businesses choose to use spreadsheet templates, while others use expense management software to help automate the process.

You may want to advise employees to include an itemized list of their expenses, along with accompanying receipts and purchase details, in order to receive reimbursement.

Submit the expense report

After creating the expense report, managers and/or financial stakeholders usually provide approval. It may be wise to proofread the report before sending, as errors may prolong the process (and reimbursement).

Receive reimbursement

After an expense report is approved, employees receive reimbursement. The reimbursement schedule may differ between companies. For example, a small business may require expense reports to be sent by the 15th of every month for reimbursement by the end of the month.

Companies may also choose to apply for a business credit card to streamline the tracking and reimbursement process. Many of these kinds of credit cards offer additional cards for employees, which means employees can use them for work-related expenses without having to worry about reimbursements.

It also may be wise to set spending limits for employees as an added precaution. This helps ensure they can only spend a set amount on their company cards.

In summary

Accurate travel expense reporting can be important regardless of business size. Monitoring work trip expenses can help inform future budgets and allow companies to set fair spending limits for employees. It may also be useful for employees to review any internal travel expense policies before going on a work trip.

As a business grows, it may also be wise to consider applying for a business credit card, which may offer benefits like travel insurance or rewards on travel-related purchases. Explore our available business credit cards to see if one is right for you.