Employee Expense Policy Compliance Checklist

Pull the report from Concur, Expensify, Ramp, or whichever expense tool the firm uses. Capture employee, department, report total, and reporting period so it can be tied to the GL allocation later.

Contractors and 1099 vendors don't reimburse through the employee expense policy — they invoice. Confirm active employee status in the HRIS and check that the employee's role is approved to incur the categories submitted (e.g., client entertainment usually restricted to client-facing roles).

Direct manager approves under the standard threshold (commonly $1,000–$2,500); department head or VP approves above. Self-approval and peer-approval are common audit findings — reject reports where the approver is the submitter's report-to relationship is missing.

IRS Pub 463 requires receipts for lodging regardless of amount and for any other expense $75 or more. Many firms set a stricter $25 internal threshold. Credit-card statements alone are not adequate substantiation — itemized receipt is required.

"Client meeting" alone is not sufficient. The accountable-plan standard under IRC §62(c) requires who, what, where, when, why — names of attendees for meals with clients, the project or matter, and the business reason. Reject reports with one-word purposes.

Tie each receipt's date, amount, and vendor to the line item in the report. OCR errors in Concur and Expensify regularly mismap tip amounts and currency. Flag any line where the receipt and report differ by more than $1.

Send a single consolidated request rather than chasing line by line. Hold the report — do not partial-pay. Per IRS accountable-plan rules, expenses unsubstantiated within a reasonable period (commonly 60 days) become taxable wages.

Compare against GSA CONUS rates or the firm's published per-diem schedule by city tier. Alcohol is typically excluded from reimbursable meals or capped separately. Tag meals with attendees so the 50% deductibility split (IRC §274(n)) flows correctly to tax.

Confirm the nightly room rate (excluding taxes and resort fees) is within the policy cap for the destination. Separate non-reimbursable charges — in-room dining, movies, spa — that the employee should be paying personally.

2024 IRS business mileage rate is $0.67/mile; confirm the rate used matches the period of travel. Commuting miles (home to regular office) are not reimbursable. Require origin, destination, and business purpose for every trip leg.

Premium-cabin air, hotels above the city cap, and entertainment over $250/person are common exception categories. Each exception needs written justification in the report and a named VP approval — not just a manager sign-off.

Route via the workflow tool (Concur, Expensify, Ramp) so the approval is captured in the audit trail. Verbal or email-only exception approvals fail SOX walkthroughs and external audit testing.

Three tests under Treas. Reg. §1.62-2: business connection, substantiation, and return of excess advances within a reasonable time. A failure on any one converts the entire reimbursement to W-2 wages subject to FIT, FICA, and FUTA.

Spousal travel, personal-use portion of mixed business/personal trips, gift cards over de minimis ($25), and certain club dues are imputed income. Send the list to payroll for inclusion in the next pay-cycle gross-up calculation.

Map travel, meals (50% deductible), entertainment (non-deductible post-TCJA), and supplies to their respective GL accounts. Use class or department dimensions so reporting reconciles to the budget owner. Wrong coding here is the most common reason close gets reopened.

Use the transaction-date FX rate from a single consistent source (OANDA, the corporate card statement rate, or IRS yearly average). Mixing sources mid-report creates unreconcilable variances at month-end. Document the source on the report.

Reports submitted more than 60 days after the expense is incurred fail the accountable-plan timing test and become taxable. Many policies use 30 days as the internal threshold to leave headroom. Note any late submissions for HR follow-up.

Cross-check the routing and account number against the payroll record — never accept new banking details from an inbound email without a verbal callback. Vendor and employee ACH fraud via spoofed email is a recurring SMB attack vector.

Standard policy is reimbursement within 5–10 business days of approval. Post the payment to the expense GL accounts (not to a clearing suspense), and confirm the entry hits the correct period — late-month approvals belonging in the following accrual.

Specify each line that needs correction and the policy section it violates. Generic "see policy" rejections produce resubmission cycles. Set a deadline for resubmission so the report doesn't stale-date past the 60-day accountable-plan window.