T&E, as most people in business know, means travel and entertainment, or sometimes it’s used to refer to travel and expense. It’s an extraordinarily broad term in many ways, and with that can come a sense of confusion or a lack of clarity regarding policies and compliance. T&E may be thrown around rather flippantly, but in reality, it’s a significant business cost. It’s estimated that many businesses spend as much 10 percent of their budget on T&E.

It’s also an area of expense management that’s very hard to control, and when companies are looking for ways to cut costs, they overlook it altogether. The use of a modern expense management software solution can help in many ways, but there also needs to be a strong, defined T&E policy in place. Otherwise, without a policy, costs can very quickly spiral.

The following are some major things to understand about why the specifics of your company’s T&E policy matter.


This was briefly touched on, but it’s so important that businesses understand the true financial implications of their T&E policy, or the lack thereof. Many CFOs and financial team members don’t even have a clear picture of how much is being spent on T&E, despite how much of the organizational budget is dedicated to this area.

Without a clear T&E policy, and the means to enforce it, there is absolutely no way to control costs. Costs don’t even include what’s actually being spent. These costs also include human error and fraud. Along with improving T&E policies and making them more defined, they also need to be executed well, with the use of expense management software.

Employee Satisfaction

Satisfied employees are a necessity for a successful, competitive organization. Companies need employees who feel like they’re well-treated and who feel like they’re able to thrive and be productive in their work. If a T&E policy is overly restrictive, it’s going to cause resentment and frustration on the part of employees.

That resentment and frustration are likely to bleed over into other areas of the company and have a detrimental effect on company culture.

Some of the components of a T&E policy that employees might find problematic include a lack of flexibility in how they travel, the length of time it takes them to complete an expense report, and lengthy wait-times for reimbursements. While employee satisfaction should be a key priority, this has to be balanced with cost management and compliance.

A T&E policy needs to have a strategic balance between the needs and wishes of employees, and what’s required from the businesses’ perspective.

Regulatory Compliance

There are some issues of regulatory compliance that are related to T&E policies. Companies need to be able to manage compliance, and ensure that even the most complex of regulatory standards are being met. Their policy needs to outline what’s expected of employees, and what’s required of them both from a cost and work perspective, as well as a regulatory perspective.

With the costs of T&E expected to continue to rise, especially with the rising cost of things like airlines and hotel accommodations, it’s more important than ever for businesses to re-evaluate their current policy and ensure they’re strategic in their approach.