Expense reimbursement policy, Fernhallow Advisory

Expense policy template with a limits table and receipt rules

An expense policy has to tell staff exactly what the business pays back, how much, what proof it needs and who signs off, so claims are fair and nobody argues about them later. This four page policy for a 64 person consulting firm does that with a nine row limits table, six receipt rules, four approval levels and a firm 30 day deadline.

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Fernhallow Advisory
4 January 2027

Expense reimbursement policy

What the firm pays back, how much, what proof it needs and who approves it.

Prepared by
Finance team
Date
4 January 2027
Expense reimbursement policy, Fernhallow AdvisoryPage 2 of 4
Expense reimbursement policy, Fernhallow AdvisoryPage 3 of 4
Expense reimbursement policy, Fernhallow AdvisoryPage 4 of 4
1
Purpose and scope
Fernhallow Advisory has 64 consultants and support staff who travel to client sites, host client meetings and buy small items for project work. This policy sets out which costs the firm reimburses, the limit for each, the proof required and who approves a claim. It applies to every employee and to contractors whose agreement says firm policies apply. Where a client contract sets a lower limit for rebillable costs, the client limit wins.
2
Principles
Four principles sit behind every rule below:
Spend the firm's money as carefully as your own, and as a client reading the invoice would expect.
The cost must be for firm business, not a personal choice that happens to occur at work.
Every claim needs proof, an approver and a project or overhead code.
Nobody approves their own claim, or a claim for a cost they shared in.
3
Limits by category
Limits are per person and include tax and tips. A cost above the limit is paid only up to the limit unless an approver at the next level agrees in writing before the cost is incurred.
Category
Limit
Conditions
Breakfast, travelling
$25 a day
Only when the hotel rate excludes it
Lunch, travelling
$35 a day
Not on days at the usual office
Dinner, travelling
$70 a day
One alcoholic drink may be included
Hotel
$260 a night
$190 a night outside capital cities
Taxi or rideshare
Actual cost
Standard class; public transport where practical
Private car use
$0.85 a km
Distance beyond the normal commute only
Client entertainment
$120 a head
At most two staff per client guest
Home internet
$40 a month
Staff rostered at home two or more days a week
Books and courses
$600 a year
Approved before purchase
4
Receipt rules
A claim is paid only with proof that meets every rule below:
1.
Upload an itemised receipt for every cost over $20; a card slip or bank statement on its own is not enough.
2.
Write the business purpose and, for entertainment, the guests' names and organisations.
3.
Add the client project code, or the overhead code if no client will be billed.
4.
For a cost in another currency, claim the amount shown on your card statement, which includes the conversion.
5.
If a receipt is lost, complete a lost receipt declaration; it covers up to $50 a claim and three claims a year.
6.
Keep paper receipts until the claim is paid, then discard them; the uploaded image is the record.
5
Approval levels
The approver checks that the cost was necessary, within the limits and correctly coded. Approval levels depend on the total value of the claim:
Claim total
Approver
Decision within
Up to $500
Line manager
5 working days
$500.01 to $2,500
Practice director
5 working days
Over $2,500
Managing partner
10 working days
Managing partner's own
Finance director
10 working days
6
Submission deadline
Submit each claim within 30 days of the date of the expense, so project costs reach the client invoice in the right month. A claim between 31 and 90 days old needs the practice director's approval whatever its value, and a claim older than 90 days is not paid. Approved claims are paid in the next fortnightly pay run.
7
Never reimbursed
The firm does not pay for the following, even when they arise on a business trip:
travel between home and your usual office
traffic, parking and speeding fines, and late payment fees
minibar items, in room films and laundry for trips under four nights
seat, cabin or room upgrades you choose
alcohol, except one drink with dinner or as part of approved client entertainment
personal items such as clothing, toiletries, gym passes and grooming
childcare, pet care or house sitting while you travel
gifts to colleagues, and annual fees for personal cards or loyalty programs
travel between home and your usual office
traffic, parking and speeding fines, and late payment fees
minibar items, in room films and laundry for trips under four nights
seat, cabin or room upgrades you choose
alcohol, except one drink with dinner or as part of approved client entertainment
personal items such as clothing, toiletries, gym passes and grooming
childcare, pet care or house sitting while you travel
gifts to colleagues, and annual fees for personal cards or loyalty programs
travel between home and your usual office
traffic, parking and speeding fines, and late payment fees
minibar items, in room films and laundry for trips under four nights
seat, cabin or room upgrades you choose
alcohol, except one drink with dinner or as part of approved client entertainment
personal items such as clothing, toiletries, gym passes and grooming
childcare, pet care or house sitting while you travel
gifts to colleagues, and annual fees for personal cards or loyalty programs
False or duplicate claims
Claiming a cost twice, claiming a personal cost as business, or altering a receipt is serious misconduct and may lead to dismissal. Finance checks a random sample of 10 percent of claims each month and every claim over $2,500.
8
Firm cards and bookings
Flights, hotels and car hire for client work are booked through the finance team's travel desk and charged to the firm account, so they never pass through a personal claim. Consultants who travel more than twice a month may hold a firm card with a $3,000 monthly limit. Card spending follows the same limits and receipt rules, and the card statement is reconciled in the expense system by the 10th of the following month.
9
Rebilling to clients
Costs coded to a client project are rebilled at cost, with no margin, on the next monthly invoice. Where the engagement letter caps expenses, for example at 8 percent of fees, the project lead checks the running total before approving travel, and any cost the client will not accept is moved to overhead with the practice director's approval.
10
Review
The finance director reviews the limits every January against hotel and meal prices in the cities where the firm works, and the managing partner approves any change. Questions go to the finance team, who answer within 2 working days.

Section by section

What each section is for, so you can keep the ones you need and drop the rest.

Cover
Document cover with the firm, title, purpose line and date.
1 and 2. Purpose, scope and principles
Who the policy covers and four principles behind every rule.
3. Limits by category
Nine costs, each with a limit and a condition.
4. Receipt rules
Six rules from itemised receipts to lost receipt declarations.
5. Approval levels
Four claim bands with approver and decision time.
6. Submission deadline
30 days, then director approval, then no payment after 90.
7. Never reimbursed
Eight excluded costs and a callout on false claims.
8 to 10. Cards, rebilling and review
Travel desk bookings, firm cards, client rebilling at cost and yearly review.

How to adapt this document

First, replace the limits with your own numbers in your own currency, checked against what a mid range hotel and meal actually cost where your staff go. Second, reset the approval bands to your structure; a 12 person business may need only two levels, the manager and the owner, with the owner's claims checked by the bookkeeper. Third, if you never bill expenses to clients, drop clause 9 and the project code rule, and use the space to explain how costs are coded to your budget lines.

What makes this document work

One table answers most questions

The limits table gives every common cost a number and a condition: $70 for dinner with one drink, $260 a night for a hotel or $190 outside capital cities, $0.85 a km only beyond the normal commute. Staff check the row before they spend instead of asking finance afterwards.

Approval scales with the money

Claims up to $500 go to the line manager, up to $2,500 to the practice director and above that to the managing partner, each with a decision time. The managing partner's own claims go to the finance director, so the rule that nobody approves their own claim holds at the top too.

The deadline has teeth

Clause 6 explains why 30 days matters, so project costs reach the client invoice in the right month, then sets consequences: claims 31 to 90 days old need the practice director, and anything older than 90 days is not paid. A deadline with no consequence is only a suggestion.

Questions people ask

Should an expense policy use per diems or actual costs?

Actual costs capped by a limit suit a firm that bills expenses to clients, because the invoice needs receipts. Per diems suit high volume travel where checking every meal receipt costs more than it saves. This policy uses capped actual costs for meals and hotels, and a flat kilometre rate for private car use.

Do limits include tax and tips?

They should, and the policy should say so, or every claim becomes a debate about whether the $70 dinner limit meant $70 before or after service and tax. Clause 3 states that limits are per person and include tax and tips, which also makes the numbers easy to check against a receipt.

What happens when someone loses a receipt?

A lost receipt declaration lets the claim proceed with a signed statement of the cost, date and purpose. Capping it, here at $50 a claim and three claims a year, stops the declaration replacing receipts. Tax authorities generally expect proof for business costs, so keep declarations rare.

Can the firm refuse to pay an expense over the limit?

It can pay only up to the limit, which is what clause 3 does, unless an approver at the next level agreed in writing before the cost was incurred. Prior approval is the important part: approving an overspend after the fact teaches staff the limit is negotiable.

How often should expense limits be updated?

Once a year is common, checked against actual hotel and meal prices in the cities where staff travel. Limits that lag prices push honest people into constant exceptions. This policy has the finance director review them every January and the managing partner approve any change.

Are reimbursed business expenses taxed as pay?

Usually not, when the policy works as an accountable plan: the cost has a business purpose, the employee proves it within a reasonable time and returns any excess. That is the United States test in IRS Publication 463, and other tax systems apply similar rules. Receipts, deadlines and a stated purpose on every claim keep reimbursements out of taxable wages.

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