Expense & Approval Policy

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---
name: Expense and Approval Policy
description: Drafts a clear, enforceable expense and approval policy covering spend limits, approval chains, reimbursement rules, and audit requirements. Use when writing or updating company policy, onboarding a finance system, or preparing for a compliance review.
---

# Expense and Approval Policy

An expense policy that employees ignore is worse than no policy — it creates a false sense of control. A good policy is short enough to read, specific enough to apply, and enforced consistently. This skill produces a policy that covers the decisions people actually face.

## Policy Structure

A complete expense policy covers five topics: what is reimbursable, spend limits by category, approval authority by amount, documentation requirements, and submission deadlines. Each section should be a table or a short bulleted list — not prose paragraphs. Employees should be able to scan to the answer in under 30 seconds.

## Reimbursable Categories and Limits

Define per-transaction limits for the most common categories. Travel: airfare in economy for flights under six hours, reasonable hotel rate with a nightly cap (typically set to the median business hotel rate in that city). Meals: per-person daily cap (a common default is 75 USD per day for domestic travel, 100 USD for international). Client entertainment: separate cap per-person per-event, requires client names documented. Software and tools: anything over a defined threshold (e.g., 500 USD annually) requires manager pre-approval. Equipment: requires pre-approval and becomes company property. Anything not listed is not reimbursable without explicit pre-approval.

## Approval Authority Matrix

Define who can approve what by dollar amount. A common structure: up to 1,000 USD — direct manager; 1,000 to 10,000 USD — department head; over 10,000 USD — CFO or equivalent. Purchases above the threshold require pre-approval before the expense is incurred, not after. Emergency exceptions require CFO notification within 24 hours. No one approves their own expense.

## Documentation Requirements

Every reimbursable expense requires a receipt showing vendor, date, and amount. Credit card statements do not substitute for receipts. Meal and entertainment expenses require a note on business purpose and attendee names. Lost receipts require a signed attestation — allow no more than one per quarter per employee before flagging for review.
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