Many companies require employees to travel. This travel causes the employee to spend money on necessities including food, lodging, and transportation. An expenses reimbursement is a payment from an employer that refunds money the employee spent on a business trip.
Most companies' expenses reimbursement policies set a maximum allowed expense per day. This is considered a per diem amount, which is the maximum allowance for meals, lodging, and transportation items. If an individual spends more then his company's maximum limit on an item, he is typically forced to pay that expense out of his own pocket with no opportunity for reimbursement.
Most businesses require an individual to turn in expenses reimbursement receipts in a timely manner. This is necessary to ensure adequate bookkeeping and tax reporting processes are followed for the company. Typically, employees must turn in their expenses report receipts in less than three months.
When an employee turns in his receipts, he typically also must file an expenses report that uses a specific style or template. This expenses reimbursement form is a special spreadsheet that details how the expenses were incurred on a particular trip. Most forms include an area for expense types, dates, and amounts. This provides adequate accounting detail to define why an employee spent money on his business trip.
An employee must claim an expenses reimbursement before he will be refunded the money he spent. This is a manual process that requires paperwork and proper receipts. If the employee neglects to complete his expense report, he may never receive the money he is owed.
Most tax rules require an employee to provide receipts for expenses over a specific threshold. This helps to ensure the employee is being truthful about the expenses spent during a trip. Most businesses require expense of more than $25 US Dollars (USD) to include a paper receipt.
Most companies also limit the amount their employees can spend on travel expenses. Typically, a company will not allow employees to file expenses reimbursement claims for first-class fares, but require them to fly coach or business class. This ensures the employee is buying the least expensive transportation available.
Many companies requires an employee to obtain pre-authorization for expenses before he can travel. This travel authorization form is an estimate of expected expenses for a specific business trip. This process forces an employee to manage expenses based on a predetermined estimate. Exceeding this authorization amount could result in unpaid reimbursed items.