For many businesses, travel and expense (T&E) spending is a necessary but frustrating reality. Employees dread the paperwork, the manual entry, and the long wait to get reimbursed.
Finance teams wrestle with reconciling receipts, enforcing policies, and closing the books with incomplete or unclear data. Leadership is often flying blind, with poor visibility into where the money’s going and whether it aligns with business priorities.
Despite being a routine part of operations, T&E remains one of the most cumbersome categories of spend. Outdated processes, disconnected systems, and opaque policies create friction at every step, from swipe to reconciliation.
In this article, we discuss the meaning of T&E, provide concrete examples of the expenses it covers, and outline best practices for efficient and effective T&E management.
Key Takeaways
- T&E, which stands for “travel and expenses” or “travel and entertainment,” is a spending category that includes all costs incurred by employees while conducting business away from their usual workplace or when entertaining clients and/or business associates.
- Examples of T&E spending include local transportation (e.g., a cab ride from one workplace to another), out of town travel (e.g., airfare), entertainment (e.g., dinner for a client in from out of town), and gifts (e.g., promotional material passed out at a trade show).
- Manage your T&E spending by developing a clear and comprehensive T&E policy, training your employees to abide by the rules, leveraging technology and automation, utilizing a corporate/business/p-card solution, collecting original receipts, and providing timely reimbursement.
T&E Meaning
T&E is usually an abbreviation for “travel and expenses,” but some professionals use it to mean “travel and entertainment.” Either way, it’s a category of business spending that refers to costs employees incur while away from their home base or entertaining clients.
Some businesses manage these costs through reimbursement. Employees pay with their own money, collect receipts as proof of purchase, fill out an expense report, submit the report for approval, and then wait for the business to write a check to pay them back.
While this system can be effective, it’s cumbersome, time-consuming, and difficult. That’s why many businesses are now turning to another solution: Giving their employees a corporate credit card, business credit card, or p-card to pay for T&E expenses.
This solution eliminates a big chunk of the reimbursement system and streamlines employee spending so things get done faster and more efficiently.
We’ll talk more about corporate cards later on in this article. But, first, we’ll discuss some specific examples within the T&E category.
T&E Examples
The T&E category is typically broken down into subcategories that include local transportation, out-of-town travel, entertainment, and gifts. Here’s a general description of each subcategory and some of the more common expenses they hold.
Local Transportation
Local transportation refers to employee costs associated with traveling within a certain radius of their regular workplace.
It includes things like:
- Getting from one office or workplace to another
- Visiting clients or customers
- Fleet vehicle maintenance
- Going to a business meeting
For example, Employee A takes a train from his home to a business meeting in another part of the city. He then takes a cab to a restaurant to have lunch with a client. After lunch, he rides the bus to the office, where he works for the rest of the day.
All of this local transportation could be considered a business expense and can be paid for by the business or reimbursed to the employee.
Out-Of-Town Travel
Out-of-town travel is typically reserved for expenses that take you to a new city, state, or country and include things like:
- Transportation via airplane, train, bus, car, taxi, or limousine
- Baggage and shipping
- Car maintenance
- Lodging and meals
- Cleaning (e.g., dry cleaning and laundry)
Entertainment
Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation for clients, customers, or employees, such as:
- Nightclubs
- Social, athletic, and sporting clubs
- Theaters
- Sporting events
- Hunting, fishing, vacation, and similar trips
Regardless of the situation, employees should always retain accurate receipts to prove these expenses were business-related.
Note: Most entertainment costs are not tax deductible. Always check with a tax expert when filing your expenses.
Gifts
According to the IRS, you can deduct a maximum of $25 for business gifts you give directly or indirectly to any one person during your tax year.
The following items are not included in the $25 limit for business gifts:
- An item that costs $4 or less, has your name clearly and permanently imprinted on the gift, and is one of a number of identical items you widely distribute (e.g., pens, desk sets, plastic bags, and other promotional items)
- Signs, display racks, or other promotional materials to be used on the business premises of the recipient
T&E Best Practices
Develop A Clear And Comprehensive T&E Policy
One of the best things you can do when managing T&E spending is to develop a clear and comprehensive set of rules and regulations.
Your policy should include things such as approved and unapproved expenses, necessary receipts and documentation, a clear approval workflow for large expenses, or when using a reimbursement system, and penalties for violations.
Train Your Employees
Whether you’re crafting a new T&E policy or updating an outdated version, it’s always a good idea to train your employees on what’s new.
Even if your policy doesn’t change from year to year, it can be beneficial to hold a review for your employees so that they keep the rules and regulations front of mind.
Leverage Technology And Automation
Implementing financial management technology and automation into your workflow can improve the efficiency, accuracy, and productivity of everyone involved in the process.
Depending on the solution you choose, you can get access to:
- Mobile apps for easy receipt capture and expense logging
- Automated workflows for approvals
- Integration with corporate credit cards and accounting systems
- Policy compliance checks and alerts
- Data analytics and reporting for spend visibility
Use A Corporate Card Solution
Giving your employees access to a corporate credit card, business credit card, or p-card solution can streamline payment and expense tracking like nothing else.
These cards all but eliminate the majority of the speed bumps that make reimbursement systems so cumbersome and inconvenient.
Require Original Documentation And Receipts
Whether you run a reimbursement system or use a corporate card solution, it’s always a good idea to collect itemized receipts, original documents, and other proofs of purchase.
This kind of documentation is invaluable for verifying approved expenses and for supporting deductions on your taxes.
Provide Timely Reimbursement
If your business pays employees back for T&E spending that comes out of their own pocket, be sure to provide timely reimbursement.
Most businesses aim to reimburse their employees every two weeks (typically on pay day), but if it works better for your business, you can extend the period out to a full month. Any longer than that could be a burden on your employees.
Control T&E With Coast
Managing travel and expense (T&E) spending doesn’t have to be painful, especially for fleet businesses with teams on the move. Whether it’s drivers in the field, technicians visiting job sites, or a sales team attending customer meetings, Coast gives you the control and visibility to make T&E seamless for everyone.
With Coast, you can issue smart, category-restricted cards to employees—ensuring they can spend only where and when it makes sense. You’re no longer relying on out-of-pocket spending, handwritten logs, or surprise reimbursements. Instead, you can digitize your expense policy, automate enforcement, and streamline reconciliation, all from one centralized platform.
Whether your team is on the road or behind a desk, Coast ensures your T&E processes are efficient, compliant, and easy for everyone to follow.
To learn more about how Coast can help your company, visit CoastPay.com today.
Frequently Asked Questions (FAQs)
Why is T&E management important?
T&E management is important for businesses of all sizes and types because it directly impacts a variety of foundational variables, including financial health, operational efficiency, compliance, and employee satisfaction.
More specifically, T&E management helps businesses:
- Control costs
- Verify that employees are complying with company policies and regulations
- Streamline the reimbursement processes (if applicable)
- Improve budgeting and forecasting
If your business doesn’t monitor T&E spending, costs can quickly spiral out of control and become a drain on your operation.
With a T&E management program in place, you can build a controlled, transparent, and efficient spending system that contributes to the stability and overall well-being of your company.
How often should I review our T&E policy?
As a general rule, review your T&E policy at least once a year. However, if your business operates in a geographic area or a particular industry that changes tax or legal rules often, review your T&E policy every four to six months.
It’s also useful to review your T&E policy when business needs change — which could be more or less often than tax or legal changes.
Regardless of when you review the policy, implement changes so that it reflects the most up-to-date understanding of rules and regulations.
What happens if an employee violates the T&E policy?
There are no federal laws governing T&E violations. However, in some cases, the violation could be considered fraud or embezzlement, which are illegal.
In most minor cases, penalties must come from within the business itself. Consequences for violating a T&E policy can range from a warning and non-reimbursement of expenses to more serious disciplinary actions, depending on the severity and frequency of the violation.
As mentioned, if the violation is large enough, happened on a regular basis, and/or was intentional, you may have cause to take it outside the business and seek legal action against the employee.
Regardless, make sure that your T&E policy clearly outlines the consequences for violating the rules.
