Expense management covers all the processes a company uses to record, control, approve and reimburse business expenses incurred by employees. Transportation tickets, hotels, meals, taxis, parking or mileage expenses must be supported by appropriate documentation, comply with company rules and be correctly integrated into accounting processes.
Effective expense management reduces administrative work, limits errors, improves spend control and accelerates employee reimbursement. It has also become an increasingly important compliance issue, particularly with the development of electronic invoicing in France since September 2026.
For companies managing significant volumes of business travel, the objective is no longer simply to process expense reports faster. It is also to reduce the number of expenses employees need to pay for personally by centralising bookings and invoices directly.
Here are the main rules and best practices companies should implement to optimise expense report management.
What is an expense report?
An expense report is a document that allows an employee to declare business expenses they have personally paid for in connection with their work.
An employee may, for example, pay for a meal during a business trip, cover the cost of a taxi to visit a client or pay for parking. They then submit the expense to their employer with the required information and supporting documentation to obtain reimbursement.
An expense report therefore serves several purposes. It allows the employee to be reimbursed, enables the company to verify that the expense was genuinely business-related and gives Finance teams the information required for accounting treatment.
According to the French Urssaf, business expenses are expenses incurred by employees for the needs of their professional activity. They may notably be covered through reimbursement of actual costs based on receipts or through lump-sum allowances depending on the circumstances. The Urssaf rules on business expense reimbursement provide additional information on the applicable framework.
Why is expense management important?
A single expense report will generally represent a relatively limited amount. Across a company, however, hundreds or thousands of individual expenses can represent a significant budget and a substantial administrative workload.
Poor expense management can result in missing receipts, duplicate claims, delayed approvals, accounting errors or reimbursements that take several weeks.
For employees, the main concern is often financial. Regularly paying hundreds of euros on behalf of the company can affect personal cash flow.
Finance teams face a different challenge. They need to quickly verify the nature of the expense, its amount, its business purpose, compliance with company policy and the associated documentation.
Structured expense management therefore helps companies balance employee experience, cost control and administrative efficiency.
What types of expenses can a company reimburse?
The expenses that can be covered depend on their business purpose, the employee's circumstances and the rules defined by the company.
Not every expense incurred during a working day automatically qualifies as a business expense. The company must be able to establish a connection with the employee's professional activity and define reimbursement conditions within its internal policy.
Transportation expenses
Transportation expenses include costs related to travel required for business purposes, such as train tickets, flights, public transportation, taxis, ride-hailing services, rental cars, tolls and certain costs associated with the use of a personal vehicle.
Example: an employee travels to a meeting in Paris by train. If the journey is made for business purposes and complies with company rules, the train ticket can be covered by the employer.
For business travel, a business travel booking platform allows employees to book trains, flights, hotels and cars directly on behalf of the company. Employees therefore avoid paying certain expenses personally, while invoices are centralised from the moment of booking.
Accommodation expenses
Accommodation expenses notably include hotel nights required during a business trip.
Example: an employee attends a conference in Lyon and needs to stay overnight. The company can cover the accommodation according to the rules defined in its travel policy.
It is often more effective to set spending limits adapted to individual destinations rather than using a single fixed budget. A hotel night in Paris or London may cost significantly more than accommodation in a less expensive location.
A corporate travel policy can define budgets, permitted hotel categories, preferred suppliers and applicable approval procedures.
Meal expenses
Meal expenses correspond to food and restaurant costs incurred by employees in certain professional circumstances, particularly when business travel prevents them from eating under their usual conditions.
These expenses are subject to specific rules. A meal taken during a business trip may be reimbursed based on a receipt or covered through a lump-sum allowance within the limits set by the French Urssaf. Companies must also avoid duplicate coverage: a meal already reimbursed through an expense report cannot also be paid for using a meal voucher. To understand which receipts should be retained and how each expense should be classified, Openeat provides guidance on declaring business expenses.
Example: a salesperson spends the day visiting a client in Bordeaux and has lunch locally. Upon providing the receipt, the company reimburses the meal through an expense report.
As the applicable rules and thresholds can change, companies should regularly check the latest official Urssaf guidance.
Other business expenses
Other expenses may also be reimbursed when they are necessary for professional activity, including parking, communications, small equipment, certain training-related costs or other expenses directly connected with an assignment.
Companies should clearly specify which costs are permitted and which remain the employee's responsibility to avoid inconsistent interpretations across teams.
What supporting documents are required for an expense report?
Supporting documentation is a central part of expense management.
Depending on the expense, this may include a hotel invoice, taxi receipt, toll receipt, restaurant bill or a document supplied by a transportation provider.
The document should make it possible to identify the expense and the information required for review, including the date, supplier, nature of the service and amount.
The company may also ask employees to indicate the business reason for the expense, the relevant client or project, the cost centre, participants in a business meal or any other information required for internal reporting.
Digitalisation now allows many of these supporting documents to be scanned and stored electronically. However, for a digital copy to replace the paper document under the applicable rules, the digitisation and archiving process must meet the relevant requirements.
Actual expense reimbursement or lump-sum allowance: what is the difference?
It is important to distinguish between different methods of covering business expenses.
With actual expense reimbursement, the employee incurs an expense and then provides the corresponding supporting document. The employer reimburses the expense according to the company's applicable rules.
In certain circumstances, the company may instead pay a lump-sum allowance. The amount is not necessarily identical to the exact expense incurred by the employee, and its social security treatment depends on the applicable conditions and thresholds.
The French Urssaf clearly distinguishes reimbursement of actual expenses based on supporting documents from the payment of lump-sum allowances. It also refers to a specific flat-rate deduction, which is a separate mechanism available only to certain professions.
These mechanisms should also not be confused with the deduction of actual professional expenses that an employee may choose for their personal income tax return. That is a personal tax matter and is separate from an employer's expense reimbursement process.
What information should an expense report include?
An expense report should allow the teams reviewing it to quickly understand who incurred the expense, why it was incurred and in what context.
It may include the employee's identity, expense date, supplier, expense category, amount paid, currency for expenses incurred abroad, relevant project or cost centre and the corresponding supporting document.
For business meals, the company may also need additional information identifying the business context and the people involved.
The more structured this data is when the expense is submitted, the less time Finance teams need to spend requesting clarification from employees several weeks later.
How should the expense management process be organised?
Effective expense management begins when the expense is incurred, not at the end of the month.
Employees should be able to submit their supporting documents quickly and provide the required information. The expense can then be reviewed automatically or manually according to its amount, category and company rules.
When an expense complies with the policy, an additional approval is not always necessary. Companies can reserve management approval for exceptions or amounts exceeding defined thresholds.
Once approved, the expense is transmitted to Accounting and incorporated into the reimbursement process.
The objective is to minimise repetitive data entry and back-and-forth communication between employees, managers and Finance teams.
What deadlines should companies set for expense reports?
Companies should clearly define in their internal policy how long employees have to submit business expenses.
The later an expense is reported, the greater the risk of losing the receipt, forgetting the context or experiencing difficulties matching the transaction.
A regular submission process, either continuously or at short intervals, also makes accounting close easier.
Internal approval deadlines should also be defined so that employees are not left waiting for weeks to be reimbursed for significant expenses.
A good process therefore relies on three principles: quick submission, targeted approval and reimbursement within a predictable timeframe.
Expense reports and VAT: reimbursement is not the same as VAT recovery
The fact that an expense can be reimbursed to an employee does not automatically mean that the corresponding VAT can be recovered by the company.
Deductibility depends on the nature of the expense, the applicable tax rules and the characteristics of the supporting document.
This distinction is important for Finance teams. An expense may be entirely legitimate and reimbursable to the employee while being subject to different treatment for VAT purposes.
The quality of the supporting document is therefore essential. In some circumstances, a simple receipt may be sufficient to support employee reimbursement without necessarily providing all the information required for VAT recovery.
Electronic invoicing: what changes for expense reports in 2026?
France's electronic invoicing reform introduces an important change in the management of certain business expenses.
Since September 1, 2026, all French companies covered by the reform must be able to receive electronic invoices. For expenses falling within the scope of B2B electronic invoicing, including certain purchases from French VAT-registered suppliers, the invoice may now be transmitted directly in the company's name through an approved platform.
This changes the traditional process in which an employee pays an expense, systematically receives the invoice and then submits it with an expense report.
France Num nevertheless identifies a number of specific situations. A tolerance notably applies to certain restaurant expenses below €150 excluding VAT, while specific rules cover receipts generated by automated systems such as some parking facilities and tolls.
This transition also creates a new operational risk: an invoice may be sent directly to the company while the employee has already personally paid the expense and requests reimbursement. Finance teams therefore need to reconcile the invoice, employee payment and reimbursement request to prevent duplicate payment.
What are the most common expense management mistakes?
The first mistake is having an expense policy that is too vague. If employees do not know the permitted amount for a meal or hotel, managers have to arbitrate after every expense.
Another common challenge is the multiplication of tools. A booking is made on one website, the invoice arrives by email, the expense is entered into a second application and then approved through a third system. This fragmentation increases processing time.
Companies also need to monitor duplicate claims, incomplete supporting documents, personal expenses and reimbursement requests for services that have already been paid directly by the employer.
Finally, highly manual expense management often prevents companies from making effective use of their data. Expense reports can reveal recurring costs that would be better integrated directly into procurement or travel processes.
How can expense management be automated?
Expense management software can eliminate a significant proportion of repetitive administrative tasks.
Employees can submit supporting documents from their phones while certain information is automatically extracted. The system can then apply company spending limits, detect certain anomalies and trigger the appropriate approval workflow.
Automation also makes it easier to allocate expenses to a cost centre, entity, project or business trip.
The benefit is not limited to time savings. Standardisation improves data quality and gives Finance teams a more useful overview of company spend.
However, companies should distinguish between two complementary objectives: automating the expense reports that remain necessary and, wherever possible, eliminating the need to create an expense report in the first place.
How can companies reduce business travel expense reports?
The simplest way to reduce expense reports is to prevent employees from personally paying for the main components of a business trip.
When train tickets, flights, hotels and rental cars are booked through a centralised platform and invoiced directly to the company, employees no longer need to manually recreate these expenses in a traditional expense report.
Employees are then left only with expenses actually incurred during the trip, such as certain meals or local transportation.
Fairjungle centralises business travel bookings, applies corporate travel policy rules and monitors travel spend from a single interface. Finance teams also benefit from centralised business travel invoice management, reducing the time spent searching for receipts and reconciling expenses.
For companies managing significant travel volumes, an all-in-one travel management solution can also connect budgets, bookings, policies and reporting.
If a large proportion of your expense reports still relates to trains, flights and hotels booked individually by employees, you can book a Fairjungle demo to see how these expenses can be centralised before they occur.
What role does an expense policy play?
Software cannot replace clear rules.
Companies need to determine which expenses are permitted, applicable spending limits, required supporting documents, approval procedures and possible exceptions.
These rules can then be integrated directly into the tools employees use.
For business travel, the policy may establish hotel spending limits, determine permitted rail or airline classes and define circumstances requiring management approval.
A consistent policy reduces disputes after the expense has been incurred and encourages employees to make compliant decisions before purchasing.
How can companies improve expense management in practice?
The most effective approach is to act at two levels.
The first is to optimise the treatment of expenses that will inevitably remain employee expense reports: immediate capture of receipts, structured data, clear rules, automated controls and rapid approval.
The second is to reduce expense reports at the source. The more a company centralises major business expenses and pays them directly, the less employees need to advance personally and the fewer individual receipts Finance teams need to process.
This distinction is particularly important in business travel. A train ticket or hotel night booked and invoiced directly through the Travel platform does not need to be manually entered again by the traveller.
Expense management then becomes a complementary process rather than the main method of tracking business travel spend.
Expense management FAQ
What is an expense report?
An expense report is a document employees use to declare a business expense they have personally paid for and request reimbursement from their employer.
Which expenses can a company reimburse?
Transportation, accommodation, meals and other expenses required for professional activity may be covered, subject to the applicable rules and the company's expense policy.
Is a receipt required for an expense report?
Supporting documentation plays an essential role in demonstrating that the expense was genuine and business-related, particularly when actual costs are reimbursed. The exact requirements depend on the type of expense and reimbursement method.
What is the difference between actual expense reimbursement and a lump-sum allowance?
Actual expense reimbursement is based on the amount the employee genuinely incurred and the corresponding supporting documentation. A lump-sum allowance is a predefined amount governed by the applicable rules and does not necessarily equal each employee's exact expenditure.
How long should expense receipts be retained?
Retention periods depend on the relevant tax, social security and accounting context. Companies should therefore establish an archiving policy that complies with the obligations applicable to them and, when documents are digitalised, use a process that preserves their evidential value.
How does electronic invoicing affect expense reports?
Since September 2026, certain professional expenses resulting from French B2B transactions may lead to an electronic invoice being issued directly in the company's name. Companies therefore need to more effectively reconcile invoices received, payments made by employees and reimbursement requests.
How can expense management be automated?
Companies can use software to digitise receipts, automate data entry, apply expense policies, manage approval workflows and transfer information to accounting systems.
How can business travel expense reports be reduced?
Centralising train, flight, hotel and car bookings allows companies to pay for or receive invoices for a large share of business travel costs directly. Employees no longer need to advance these amounts or manually report them after travelling.
Expense management: key takeaways
Effective expense management relies on three elements: clear rules, a simple process and tools capable of reducing manual administrative work.
Companies need to determine which expenses can be reimbursed, define the required supporting documentation, structure approval processes and take account of changes resulting from electronic invoicing.
However, optimising expense report processing is only part of the solution.
For business travel, the best expense report is often the one an employee never needs to create. By centralising trains, flights, hotels and cars on a single platform, companies can receive travel data and invoices directly while limiting the need for employees to pay out of pocket.
With Fairjungle, companies can centralise business travel, automate travel policies, monitor spend and simplify the work of Finance teams.
Want to reduce the time your teams spend on travel expenses and invoices? Book a Fairjungle demo.
