What is travel and expense (T&E)? A guide for finance and travel teams

Travel and expense affects every stage of a business trip, from booking to reimbursement. This guide defines what T&E means, explains the process that finance teams manage, and outlines what to look for when evaluating travel and expense management programs.

What does travel and expense mean?

Travel and expense (T&E) is the term used to describe the money employees spend when traveling for work or conducting approved business activities away from their usual workplace. Finance teams often shorten the category to T&E, and some still use “travel and entertainment” when client hospitality is included.

T&E isn't the same as general accounts payable. Accounts payable covers vendor invoices across the business. T&E specifically tracks employee-initiated spend tied to business trips, events, and client meetings. That distinction matters because T&E spend is highly variable, subject to company policy, and difficult to forecast without good data.

Why travel and expense matters to finance teams

T&E is one of the largest controllable operating costs in most organizations. The Global Business Travel Association (GBTA) projects global business travel spending will reach a record $1.71 trillion in 2026 — a 7.2% increase over 2025.[1] Spending continues to outpace trip growth as rising transportation and travel costs push prices higher, making every out-of-policy booking and duplicate receipt more expensive to catch late.[1]

Finance leaders focus on T&E for three reasons:

• Spend visibility: Without a connected system, booking data lives in one tool, card transactions in another, and receipts in employee inboxes. Finance can't answer basic questions — who is traveling, what did they spend, was it in policy — until weeks after a trip.
• Compliance and audit readiness: Tax deductibility rules, per-diem limits, and receipt requirements vary by expense type and jurisdiction. Finance teams need consistent policies and documentation to maintain compliance and prepare for audits.
• Employee retention and productivity: Delays in the T&E process show up in expense reports. According to the State of Corporate Travel and Expense 2026, 71% of business travelers spend more than 30 minutes on expense reports and 77% want an all-in-one travel and expense platform.[2]

What counts as travel and expense?

T&E categories vary by company policy, but most programs cover the same core spend types.

Meals and entertainment carry additional tax rules. In the U.S., many meal expenses remain partially deductible when tied to business travel, while entertainment deductibility has narrowed since 2017 tax reform. Finance teams should document the purpose for each business travel expense line item rather than relying on category labels alone.

How the travel and expense process works

The travel and expense process typically follows five stages. Each stage has its own purpose, but manual programs often create delays and extra work between them.

Off-channel bookings, disconnected card data, missing receipts, and delayed approvals all create extra work for finance teams and slow reimbursement. Integrated travel and expense platforms reduce these manual handoffs by connecting booking, payment, expense reporting, and reconciliation in one system.

Navan Expense, for example, automates expense management from swipe to reconciliation, and Audit Agent applies more than 45 automated compliance checks per transaction with a 73% touchless auto-approval rate, as reported in the State of Corporate Travel and Expense 2026 from Navan and Skift.[2]

What to include in a travel and expense policy

A travel and expense policy tells employees what they can spend, how to book, and what documentation finance requires. Without a written policy, managers enforce rules inconsistently and audit risk rises.

Strong T&E policies include:

• Eligible expenses and explicit exclusions: Personal travel, non-approved cabin upgrades, and other out-of-policy expenses
• Booking rules: Approved booking channels, advance-booking expectations, and preferred suppliers
• Spending limits: Per diem, nightly hotel caps, and limits by role or destination
• Payment method: When employees should use a corporate card versus request reimbursement
• Receipt and documentation standards: Itemized receipts, business purpose, and attendee lists for meals
• Approval workflow: Pre-trip approval for high-cost travel and post-trip expense sign-off
• Reimbursement timeline: Target turnaround times from expense submission to payment

A travel and expense policy is most effective when employees see it at the point of spend. Automated policy controls that flag out-of-policy bookings before checkout reduce leakage more effectively than post-trip audits alone. Following travel and expense policy best practices can improve compliance, reduce manual reviews, and make policies easier for employees to follow.

What is travel and expense management?

Travel and expense management (TEM) is the ongoing process of planning, controlling, reporting, and optimizing employee travel spend. TEM includes travel booking, payment controls, expense capture, audit, reimbursement, and analytics.

Historically, many companies used separate systems for travel booking and expense reporting. A travel management company (TMC) or online booking tool handled trips, while a separate expense system managed reports. That separation created the reconciliation gap finance teams still work to close today.

From disconnected tools to unified platforms

Many organizations have started replacing separate travel and expense tools with unified platforms that connect booking, payment, expense reporting, and reconciliation. Bringing these functions together gives finance teams better visibility into travel spend while reducing manual work.

Navan combines business travel booking with Navan Expense on one AI-powered platform. Navan's Reconciliation Agent automatically links payments to bookings across transaction types, and Conversational Analytics lets finance teams query T&E data using natural language. According to Forrester's Total Economic Impact™ study, organizations using Navan achieved 376% ROI over three years and reduced the amount of time finance teams spend on expense reports by 80%.[3]

When evaluating travel and expense management software, compare platforms based on booking adoption, policy enforcement, card integration, ERP connectivity, global reimbursement support, and reporting, not just feature lists. For more about how to evaluate T&E management software, read our travel and expense management software guide.

Note: The Total Economic Impact™ study from Forrester was commissioned by Navan. Results will vary by organization size and implementation.

How to strengthen your travel and expense program

Whether you're modernizing an existing process or building a new one, these four actions can strengthen your T&E program:

• Assess current spend: Pull six months of T&E data by category, department, and booking channel. GBTA's average trip spend reached $1,128 in its 2025 traveler survey, making it a useful benchmark for spotting outliers.[1]
• Close the booking-to-expense gap: Require in-policy booking channels and connect corporate card feeds to the same system that stores trip data.
• Automate compliance checks: Replace manual receipt review with rule-based audit logic for duplicate charges, missing documentation, and category caps.
• Measure cycle time: Track days from expense submission to reimbursement and minutes employees spend per report.

No travel and expense program is completely hands-off. Trips change, receipts get lost, and policies need exceptions. The State of Corporate Travel and Expense 2026 report found that most travelers still spend half an hour or more per report.[2] The goal is to catch problems before closing, not after auditors or employees escalate them.

Simplify travel and expense management

Travel and expense management is about more than processing receipts. It helps companies control costs, enforce policy, improve the employee experience, and give finance teams a clearer view of business travel spend. As business travel spending continues to grow, connecting booking, payment, expense reporting, and reimbursement becomes increasingly important for reducing manual work and improving visibility.

Ready to simplify travel and expense management? See how Navan helps companies manage travel, expenses, and policy in one platform.