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What does T and E mean?

T&E (or T and E) stands for Travel and Expenses or Travel and Entertainment, in a general corporate context. Travel and expenses are the costs a business incurs when employees travel away from their usual base in order to do their jobs. (In the professional services sector, T&E can stand for Time and Expense, meaning the time spent on a project and recorded for utilisation records and billing.)

Travel and expenses are one of the largest costs for many businesses. Effectively managing budgets and spending levels has a big impact on profitability. If employees are spending too much on accommodation, transportation, food and drink, it reduces overall profit. But if expenses controls are too harsh, or travel bans are imposed, that can stop employees travelling to key meetings and events that generate revenue.

Most organisations have an expenses policy that sets out how much employees may spend and what they can spend it on. There may be preferred or mandated suppliers – for example, a hotel chain or airline that offers the best discounts to the organisation. But a rigid expenses policy doesn’t always support successful and growing businesses. Leading organisations consider the return on investment (ROI) of expenses. Air travel may be a high cost item, but a trip overseas by a sales executive that brings in a large contract means that the expense has generated a large amount of revenue.

Some common types of travel and expenses include:

  • Transport
    Air, rail, taxi, car hire, bus, fuel costs or other forms of transport between locations and activities, away from the employee’s base location. This doesn’t include travel from home to the usual workplace.
  • Accommodation
    Hotels, serviced apartments, bed and breakfast or short term rentals. Some organisations authorise an allowance for a gift or contribution to staying with friends or relatives.
  • Subsistence or daily allowance
    Some firms have a policy of offering a daily allowance for necessary expenses – mainly food and drink – while away from home on business. Others reimburse receipts up to a certain value.
  • Client entertaining
    Events, dinners and meetings with clients and prospects are business expenses. These need to be fully justified, for compliance with local tax rules as well as company policy.

Employees may pay for their own travel and expenses using a personal debit or credit card, or cash: their company reimburses them through an expenses claim. Or they may book travel and accommodation through company systems or suppliers, which are paid for directly. They may use a corporate credit card to pay for expenses.

In the past, travel and expenses claims were typically made using paper forms which were passed up the management chain for approval before being paid every few weeks. Modern expenses management systems have made the process faster and easier: employees can scan receipts and record expenses line by line, at the time they incur them, using a mobile app. Approvals are automated up to a certain threshold and managers can make direct approvals electronically, cutting down the time it takes to reimburse employees.

Person calculating expenses

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