Effective Date: TBD
Owner: Finance (Accounts Payable)
Approved By: CFO
Applies To: All employees, contractors (where contract permits), and authorized guests representing CD Widgets

1) Purpose & Scope

Purpose:
To define what expenses are allowable, how to submit them, required documentation, approval workflows, reimbursement timelines, and consequences for violations—ensuring fiscal responsibility, compliance, and fairness.

Scope:

• All business-related expenses incurred while conducting company business, including travel, client entertainment, home-office stipends (if applicable), learning & development, and minor office supplies.
• Applies globally unless otherwise specified by regional addenda.
• Where local law is stricter than this policy, local law prevails.

2) Definitions

• Business Expense: A reasonable, necessary, and appropriately documented cost directly related to CD Widgets’ business.
• Reasonable: Prudent, cost-effective, comparable to market norms, avoids luxury or extravagance.
• Necessary: Essential to achieving a work objective, mandated by client, or required to deliver on tasks or travel.
• Approver: Manager or designated budget owner with authority to approve expenses.
• Per Diem: A fixed daily allowance for meals and incidental expenses (M&IE).
• Receipts: Itemized proof of purchase showing date, merchant, items/services, tax, and total paid.
• Pre-Approval: Written authorization (email, tool workflow) before incurring certain expenses.
• Non-Reimbursable: Costs the company will not reimburse under any circumstance.
• Audit: Finance review for compliance, correctness, and fraud prevention.

3) Guiding Principles

1. Business Purpose First: Expenses must directly support CD Widgets’ business goals.
2. Cost-Conscious: Choose economical options that meet business needs.
3. Transparency: Document the who/what/why when submitting.
4. Compliance: Follow this policy, local laws, tax rules, and client requirements.
5. Data Privacy: Submit only necessary personal data; protect sensitive information.

4) Roles & Responsibilities

• Employee/Submitter: Incur reasonable expenses; collect receipts; submit on time with accurate categorization and business purpose; avoid duplicates.
• Approver (Manager/Budget Owner): Validate business need, policy compliance, budget availability; approve/deny timely; escalate edge cases to Finance.
• Finance/AP: Maintain policy; process reimbursements; audit; manage exceptions; provide training.
• Travel Coordinator/Agency (if used): Enforce travel inventory, rates, and policy-integrated booking.
• Security/IT: Approve hardware, software, and high-risk digital services.
• Legal/Compliance: Advise on gift/anti-bribery constraints and regulatory obligations.

5) Expense Categories & Rules

5.1 Travel

Pre-Approval Required: All air travel, international travel, and trips exceeding 2 nights.

Airfare

• Class: Economy/Main Cabin only. Premium Economy permitted if flight time > 6 hours and approver pre-approval obtained. Business/First not reimbursable except documented medical accommodation or client-required.
• Lowest Logical Fare: Book ≥14 days in advance when feasible; choose reasonable layovers.
• Baggage: 1 checked bag allowed if trip > 4 nights or job-required equipment is carried.
• Change Fees: Reimbursable when business-justified or due to company-driven changes.

Lodging

• Rate Caps: Target mid-range business hotels. Avoid resorts/luxury brands unless rate is comparable or negotiated.
• Incidentals: Laundry reimbursable for trips > 5 nights; minibar, in-room movies, and spa are non-reimbursable.

Ground Transportation

• Priority: Public transit → rideshare/taxi → rental car.
• Rental Cars: Compact/intermediate unless transporting team/equipment. Add fuel receipts; no luxury/convertible/SUV unless justified. Decline optional insurance if corporate insurance or credit card covers; otherwise accept mandated coverage where required (e.g., certain international jurisdictions).
• Personal Vehicle: Mileage reimbursed at the current company rate (aligns to policy rate set annually). Submit origin/destination, purpose, miles. Fuel for personal vehicles is not reimbursable (mileage covers it).
• Parking/Tolls: Reimbursable; avoid valet unless necessary.

Meals & Per Diem

• M&IE: Either per diem or actuals—not both.
• Per Diem: Use the company schedule by location; no receipts required for per diem unless otherwise required by local law.
• Actuals: Itemized receipts required for any single meal > $25 (or local threshold). Alcohol: max 1 standard drink per person at business meals; never with safety-sensitive duties. No alcohol reimbursement for solo meals unless client entertainment is the business purpose.
• Daily Cap: Do not exceed the per-diem-equivalent daily cap when using actuals.

International Travel

• Visas/Entry Fees: Reimbursable.
• Roaming/Comms: Company SIM or plan preferred; reasonable roaming charges reimbursable.
• Currency/FX: Use corporate card where available; submit receipts in local currency and let the expense tool convert.
• Safety: Follow travel advisories; use approved areas and transport.

5.2 Client Entertainment & Business Meals

• Purpose: Advance a specific business objective (deal, project, partnership).
• Attendees: List all attendees, roles, and company names.
• Limits: Reasonable, mid-market venues; no clubs with adult/explicit themes; no excessive alcohol.
• Tips: 15–20% (reasonable for locality); extravagant tipping is not reimbursable.
• Gifts: Allowed if compliant with anti-bribery, client policy, and local law. Monetary gifts or cash equivalents (e.g., gift cards) generally not allowed unless pre-approved and compliant.

5.3 Home Office & Equipment

• Eligibility: Remote/hybrid employees with manager approval.
• Stipend: Up to a defined cap (e.g., $X per quarter) for chair, desk, monitors, keyboard/mouse, webcam, lighting, ergonomic accessories.
• Ownership: Company-purchased equipment remains company property unless specified.
• Software/Subscriptions: Must be approved by IT/Security; use corporate procurement where possible.

5.4 Training, Certifications & Professional Fees

• Eligibility: Role-aligned courses, certifications, conferences.
• Pre-Approval: Required for any total cost > $200 (or set local threshold).
• Covered: Registration, reasonable travel (if approved), required materials.
• Not Covered: Luxury upgrades, unrelated courses, optional entertainment.

5.5 Communication & Utilities

• Mobile/Internet: Reimbursable only if required for role and not already covered by corporate plan. Provide a proportionate business-use rationale; Finance may cap or set a fixed monthly allowance.
• Equipment Upgrades: Must be IT-approved.

5.6 Office Supplies

• Small Purchases: Reasonable ad-hoc items (pens, notebooks) reimbursable if not available through corporate procurement; prefer centralized purchasing.
• Printer Ink/Toner/Paper: Reimbursable if job-required and not provided centrally.

5.7 Compliance, Legal & Regulatory

• Background Checks, Notary, Fingerprinting: Reimbursable if role/client required.
• Fines/Penalties: Parking tickets, traffic violations, penalties are not reimbursable.

5.8 Health, Safety & Accessibility

• Ergonomic Assessments: Reimbursable if required/recommended by HR.
• Medical Accommodations: Travel class or equipment exceptions with HR/ADA/local equivalent documentation and pre-approval.

6) Non-Reimbursable (Always)

• Personal leisure, sightseeing, vacation time, and trip extensions without prior approval.
• Luxury/first-class travel without approved exception.
• Alcohol outside business meals or entertainment; excessive alcohol.
• Adult entertainment, gambling, escorts, illicit activities.
• Family/friends’ expenses (unless pre-approved for a business purpose, e.g., caregiver accommodation).
• Lost personal property, theft, or damages (file personal/home/renter’s insurance).
• In-room movies, spas, fitness club day passes (unless pre-approved for medical accommodation).
• Airline/hotel loyalty purchases, seat selection fees beyond standard economy, lounge day passes (unless materially cheaper than meals & workspace combined and pre-approved).
• Unapproved software/apps/services; personal streaming services.
• Charitable donations (unless part of an approved corporate program).
• Gift cards/cash equivalents (unless Legal/Compliance pre-approves).
• Fines, penalties, towing, legal violations.
• Expenses older than 60 days (or local threshold) from transaction date unless exception granted.

7) Documentation Requirements

• Receipts:
  • Required for any single expense > $25 (or local threshold).
  • Must be itemized: date, merchant, items/services, tax, total, proof of payment.
  • For digital receipts, attach PDFs/images.
• Business Purpose: Clear, specific description: “Client demo with ACME on Q2 expansion,” not “Lunch.”
• Attendee List (if applicable): Names, titles, companies.
• Mileage: Origin/destination, date, trip purpose, total miles.
• Currency: Submit in original currency; system will convert using the standard rate on posting date.

Missing Receipt:

• Use “Missing Receipt Affidavit” only when merchant cannot reissue. Excessive use triggers audit review.

8) Submission & Approval Workflow

1. When to Submit: Within 14 days of expense or trip return; monthly at minimum.
2. Tool: Submit via the company expense system; attach supporting documents.
3. Approvals:
   • Direct manager for routine expenses.
   • Budget owner for category caps.
   • Finance/Legal/IT for exceptions (e.g., software, gifts, international).
4. SLA: Manager approves or rejects within 5 business days; Finance finalizes within 10 business days.
5. Payment: Reimbursement in the next cycle after final approval; ACH preferred.

9) Corporate Cards vs Personal Spend

• Corporate Card (if assigned): Use for all business expenses; do not use for personal charges.
• Personal Card: Allowed where corporate card not issued/accepted; follow same rules.
• Accidental Personal Charge on Corporate Card: Report immediately; repay within 5 business days.
• Late Fees/Interest: Not reimbursable unless due to company system failure.

10) Category Caps & Reference Limits (Set Annually)

Suggested defaults—update with your company’s numbers.

• Airfare: Economy; Premium Economy allowed > 6-hour flights with pre-approval.
• Hotel Nightly Target: Use corporate-negotiated rate; otherwise mid-market benchmark for city.
• Meals (Actuals): Daily cap equal to local per diem equivalent.
• Client Gifts: ≤ $50 per recipient per event; check client policy and anti-bribery.
• Home Office: Up to $X per quarter; one-time setup up to $Y with manager approval.
• Mobile/Internet: Up to $Z/month allowance if role-required.

11) Audit, Compliance & Consequences

• Random & Targeted Audits: Finance may audit any report; repeat exceptions or patterns (e.g., frequent missing receipts) trigger deeper review.
• Consequences:
  • Level 1: Education and correction (first minor offense).
  • Level 2: Expense denial, repayment required, temporary suspension of corporate card (repeat/minor).
  • Level 3: Formal HR action up to termination (fraud, policy abuse, falsification).
• Appeals: Submit to Finance within 10 business days of denial with additional documentation.

12) Exceptions Process

• Request: Document the requested exception, business justification, alternatives considered, and duration (one-time or ongoing).
• Approvals Required: Manager + Finance; Legal/Compliance for gift/anti-bribery; IT/Security for software.
• Recordkeeping: Exceptions must be stored with the expense record and are auditable.

13) Data Protection & Retention

• Retention: Expense data and receipts retained 7 years (or local statutory period).
• Privacy: Only necessary personal data should be included; redact sensitive data not needed for compliance (e.g., full card numbers).

14) Anti-Bribery & Corruption (ABAC)

• Public Officials: Additional restrictions apply. All gifts/hospitality to public officials require Legal pre-approval, must be modest, lawful, and accurately recorded.
• No Quid Pro Quo: Never offer anything of value to improperly influence a decision.
• Recordkeeping: Detailed entries for all gifts/entertainment.

15) Frequently Asked Questions (FAQs)

Q1: Can I upgrade my seat to extra legroom?
A: Only if the total fare remains within economy reasonable range and the upgrade is modest; pre-approval recommended.

Q2: Can I combine a personal trip with business travel?
A: Yes, if there’s no additional cost to CD Widgets. Document the fare comparison at time of booking. Personal days are not reimbursable.

Q3: What if a client insists on a venue with higher costs?
A: Document the client requirement; seek manager approval in advance.

Q4: Can I expense baggage for a 2-night trip?
A: Generally no, unless equipment or specific business need requires it.

Q5: What if I lose a receipt?
A: Use the Missing Receipt Affidavit sparingly and attempt to obtain a duplicate first.

Q6: What’s allowed for rideshare tips?
A: Reasonable tips in markets where customary (e.g., up to ~15%).

Q7: Are lounge passes reimbursable?
A: Not typically. Possible exception if it reduces total cost vs meals/workspace during a long layover (document and pre-approve).

16) Decision Rules (for AI Reasoning)

Rule R1 – Business Purpose: Expense must include explicit, verifiable business purpose. If absent → Reject.
Rule R2 – Category Mapping: Each line must map to a defined category; if unmapped → Review.
Rule R3 – Pre-Approval Check: If category requires pre-approval (airfare, international travel, exceptions) and none attached → Reject.
Rule R4 – Receipt Threshold: Any line > $25 requires itemized receipt; if missing → Reject (unless affidavit provided; then Review if excessive use).
Rule R5 – Non-Reimbursable List: If merchant/type matches non-reimbursable → Reject.
Rule R6 – Daily Cap (Meals Actuals): Sum of meals per day must not exceed per-diem-equivalent; if exceeded → Trim to cap or Reject.
Rule R7 – Alcohol Policy: Alcohol reimbursable only at business meals/entertainment; solo alcohol → Reject; excessive units → Review/Reject.
Rule R8 – Travel Class: Economy required; premium economy allowed only with conditions; business/first → Reject unless approved exception.
Rule R9 – Mileage vs Fuel: Personal vehicle fuel not reimbursable; use mileage rate → Reject fuel, Allow mileage with details.
Rule R10 – Timeliness: Submitted within 14 days (or monthly); over 60 days → Reject unless exception.
Rule R11 – Duplicate Detection: Same date/merchant/amount/currency/last4 → Review for duplicate.
Rule R12 – Gift/ABAC: Gifts above limit or to public officials without Legal approval → Reject.
Rule R13 – Corporate Card Personal Charge: Mark as personal and repay within 5 days; failure → Escalate.
Rule R14 – Regional Law Override: If local law stricter than policy → apply stricter rule.

17) Examples (Allow vs Deny)

Example A – Allow (Meals Actuals Under Cap):

• Dinner with client (3 attendees) at $120 total; one drink per person; itemized receipt; business purpose logged. → Approve.

Example B – Deny (Solo Alcohol):

• Airport bar, 2 beers during solo travel, $28. → Reject (alcohol policy).

Example C – Allow (Rental Car):

• 3-day trip requiring client site visits; intermediate class; fuel receipts attached. → Approve.

Example D – Deny (Luxury Hotel):

• 1-night stay at premium resort when comparable mid-market available. → Reject, unless negotiated rate comparable and justified.

Example E – Allow (Mileage):

• 62 miles round-trip to client site with purpose and route documented. → Approve at mileage rate.

Example F – Review/Condition (Lounge Pass):

• 6-hour layover; lounge pass $45; meal alternatives would total $60 + workspace. Pre-approved. → Approve (documented cost savings).

Example G – Deny (Late Submission):

• Expenses submitted 90 days post-transaction with no approved exception. → Reject.

18) Regional Addenda (Template)

Maintain separate addenda for countries/regions with specific per diem schedules, tax requirements (e.g., VAT), or insurance mandates.

• United States:

  • Mileage rate: Company-set annually; configure in system.
  • Per diem: Use company table aligned to city tiers.
  • Alcohol: Legal drinking age and duty status rules apply.

• EU:

  • VAT receipts required for reclaim where applicable.
  • Rental car insurance may be mandatory in certain countries.

• APAC/AMEA:

  • Local tax invoices required.
  • Additional safety approvals for certain destinations.

19) Versioning & Change Control

• Major Changes: Require CFO approval and 2-week notice prior to effective date.
• Minor Clarifications: Finance may issue clarifications without changing version, but must update the knowledge base.

20) Contacts & Escalation

• Finance/AP: ap@cdwidgets.example
• Travel Support: travel@cdwidgets.example
• IT/Security (Software/Devices): it-approvals@cdwidgets.example
• Legal/Compliance (ABAC/Gifts): compliance@cdwidgets.example
• HR (Accommodations): hr@cdwidgets.example