# Expense policy template for small business Source: https://www.barespend.com/guides/expense-policy-template-small-business/ Author: Dino Crnalic, CPA, CFO focused on finance transformation (https://www.linkedin.com/in/dino-crnalic-cpa) Last updated: 2026-10-27 ## The short answer A good expense policy fits on two pages: who it applies to, what is covered, what a valid receipt is, when expenses are due, who approves them and what happens when rules are missed. Copy the template below, replace the bracketed values with your own, and have your accountant review it. ## How to use this template Copy the text below into your own document. Replace every `[bracket]` with a number or name that fits your business, delete sections that don’t apply, and keep the whole thing short enough that people will read it. Dollar limits are left for you to set. ## The template ### 1. Purpose and scope This policy explains how [Company name] employees, contractors and owners spend company money and claim back money they have spent. It applies to company cards, personal cards used for business and out-of-pocket purchases. ### 2. What is covered Business expenses are costs that are ordinary and necessary for the company’s work. Typical examples are [travel, lodging, meals with clients, software, supplies, training]. Personal expenses are never covered. If a purchase mixes business and personal items, only the business portion is covered. ### 3. Approval - Purchases up to $[amount] don’t need approval in advance. - Purchases above $[amount] need approval from [role] before you buy. - Recurring subscriptions need approval from [role], whatever the amount. ### 4. Receipts and records - Every expense needs a receipt, or an itemised invoice, showing the merchant, date and amount. [Optional: receipts are not required for expenses under $[amount], other than lodging.] - Send receipts to [email address or number] **within [number] days** of the purchase. - Each expense must also state its business purpose and, for meals, who attended. - If you lose a receipt, ask the merchant for a copy. If you cannot get one, complete [form or note] giving the date, amount, merchant and business purpose, and have [role] sign it. ### 5. Company cards - Company cards are for business expenses only. - Cards are assigned to one person, who is responsible for every charge on it. - Lost or stolen cards must be reported to [role] immediately. ### 6. Personal cards and out-of-pocket spending Expenses paid personally are reimbursed when submitted with receipts under section 4. Reimbursement is paid within [number] days of approval. ### 7. Travel and meals - Book [class of travel] and the [lowest reasonable fare or standard rate]. - Meals are covered up to $[amount] per person per [meal/day]. Alcohol is [covered/not covered]. - Mileage is reimbursed at [rate or IRS standard rate]. ### 8. Deadlines Expenses are due by [day] of the month after they are incurred. Anything later may be rejected at [role]’s discretion. ### 9. Missing or non-compliant expenses Unsubstantiated expenses are the employee’s responsibility. Repeated or intentional breaches of this policy may lead to [consequence]. ### 10. Questions Contact [name or role] at [email]. ## Notes on the IRS rules IRS Publication 463 says you generally need documentary evidence such as receipts, canceled checks or bills to support business expenses. It is not required for an expense under $75, other than lodging. Lodging needs documentary evidence unless an accountable plan with a per diem allowance covers it. Documentary evidence is generally adequate when it shows the amount, date, place and essential character of the expense, and your own record should show the amount, time, place and business purpose. See [Publication 463](https://www.irs.gov/publications/p463) for the rules in full, and ask your accountant how they apply to you. ## Making it stick A policy only works when it is easy to follow. Name one place to send receipts, one person who owns the list of what is missing, and a weekly rhythm for reviewing it. The [month-end checklist](/guides/month-end-close-checklist-missing-receipts/) covers the rest. With Barespend, your team emails, texts or uploads receipts, and each is matched to the card or bank transaction it belongs to, with unmatched transactions flagged early. That makes the deadlines in section 4 and section 8 much easier to meet. [Start a free 7-day trial](https://start.barespend.com?utm_source=barespend.com&utm_medium=website&utm_content=guides-expense-policy-template-small-business) and test it on your own receipts. Prefer to fill in a form? The [expense policy builder](/free-tools/expense-policy-builder/) writes a first draft from your limits and deadlines. ## Common questions ### Do I need a receipt for every expense? Your policy can be stricter than the IRS. For tax purposes, IRS Publication 463 says documentary evidence generally isn’t required for an expense under $75, other than lodging. Many companies still ask for a receipt on everything, because it is simpler to enforce and easier to audit. ### What is an accountable plan? An IRS term for a reimbursement arrangement with business connection, adequate substantiation and return of excess advances. Reimbursements under one are generally not treated as employee income. Ask your accountant whether your policy qualifies. ### Should the policy set spending limits? Usually, yes. Set a per-item threshold above which approval is needed in advance, and category limits where they matter, such as meals and travel. The numbers should come from your actual spending, so the template leaves them blank. ### Is this template legal advice? No. It is a starting point. Have your accountant, and if needed your lawyer, review it before you adopt it.